George Mason University
Course: ITRN
764: East Asia Trade and Investment
Summer
Semester, 2002; Monday/Wednesday
Instructor: William B. Brown, Sr. International
Economist, Office of the Chief Economist, US Dept. of Commerce. MA Economics
Washington U., St. Louis; BA International Studies, Rhodes College, Memphis; H
(703)-787-0936 W (202) 482-3753.
Texts: (Under
Review)
Fukuyama Trust and
Lewis, When Cultures Collide.
Library: Weekly perusal of the Far East
Economic Review, and Asia articles in Economist, is encouraged.
E-Mail: Instructor: “wmbbrown@hotmail.com”. Students should join class list: “ITRN764-001”. [log on to your e-mail account; send email to “listproc@gmu.edu” and type
“subscribe intl764-001 your full name”]
Description: This course provides an introduction to the
economies and markets of East Asia: Japan, South Korea, China, Taiwan, and Hong
Kong. Their trade and investment
relationships with each other and with the United States are investigated. Development patterns among these rapidly
industrializing economies are discussed with attention to specific issues
raised for U.S. trade policy in the region.
Emphasis is on building a practical understanding of how to collect and
analyze information needed to successfully operate in the region. Opportunities
for more advanced study are explored.
Assignments: Students are expected to participate
in class discussions based on reading assignments and current events. An in-class quiz, a final examination and
periodic short homework assignments will challenge students to focus on key
concepts. Students are expected to maintain a workbook in which they will note
current issues from the press, class notes and observations. Each class will begin with a 20-minute
discussion of a current issue in the region.
Evaluation: Students will be evaluated on the
basis of class participation (20 percent), homework assignments (20 percent),
in-class quiz (20 percent) and final exam (40 percent).
COURSE
OUTLINE
1.
May 29, 2002 Class and Course Introduction
Introductions
·
Student
Introductions
·
Course --
First third is on common and crosscutting regional issues—economic history
& culture, nature of competition, markets (goods, labor, capital), growth
policies and financial crisis. We learn to differentiate by country and
culture. Second two-thirds of course is
on specific economies; Japan, China, Hong Kong, Taiwan and Korea. Matrix nature—issue-by-country then
country-by-issue—allows for different perspectives, and review of key concepts.
Discuss texts,
assignments.
Lecture: East Asia--a diverse, ancient and heavily
populated region. How are these
countries similar and different?
·
Geography,
natural resources, isolation
·
Historical
Culture--Chinese dynastic cycle , Western and Japanese colonialism, US
influence
·
Political
Culture--Confucianism, Marxist-Leninist, Democracy
·
Economic
Culture--state sector, large enterprises, villages, mom & pop, foreign
trade
Assignment for this and next class. Fukuyama, Trust, pp. 69-95,
171-207, 255-266; Ro Young-chan
“Confucian Capitalism in Asia” (CP);
“New Fashion for Old Wisdom” Economist Jan 21, 1995 pp. 38-39 (CP).
2.
June 3 Key Economic
Concepts (Review)
·
Competition
·
Nature and
role of markets
·
Goods
markets, labor markets, capital markets
·
Prices,
wages, and interest rates
·
Macroeconomic
indicators
·
GDP
·
Current and
Capital Accounts
·
Foreign
Exchange markets
Assignment: see May 30
3. June 5 Economic
Development of East Asia
Economic
Development Patterns and Strategies, Key Data.
·
Japan
·
Hong Kong
·
Taiwan
·
S. Korea
·
China
·
N. Korea
Assignment East
Asian Economic Miracle,
World Bank “Overview” pp. 1-26
(R); Asia section of IMF World Economic
Outlook, Spring 2002, on IMF webpage imf.org
4.
June 10: Current Conditions,
Returning to Growth?
·
Miracle or
not; reasons for rapid growth.
·
Domestic
savings vs. foreign investment
·
Debt vs.
Equity
·
Markets and
market failures.
Assignment Fukuyama
“Asian Values and the Asian Crisis” GMU
Center for Asia Pacific Economic Cooperation, Vol. 2, pp. 3-10 (CP); Lardy pp. 1-20; Krugman, “The Myth of Asia’s Miracle” Foreign Affairs, Nov. 94, pp.
1-14. (CP); Wade and Veneroso, “Asian Financial Crisis, The High Debt Model”
Russell Sage, Feb 1998 pp. 1-18 (CP);
Brown “Hong Kong and South Korea Responses” Feb. 1999, (CP).
5.
June 12: Overview of East Asian Markets
Trade of
Goods and Services
·
Interregional
trade
·
Trade with
U.S.
Labor
Markets
·
Relative
wages
Financial
and Foreign Exchange Markets
·
Role of
Banks in Asia
·
Overview of
portfolio, FDI
·
Foreign
exchange
Assignment “FDI in
East Asia” Transnational
Corporations Vol. 7 no 1, April. 1998, UN (CP)
pp.
41-69; “Stock Market Integration in China
and Hong Kong” CAER no 14, Jan.
’98. (CP); Mehran and Quintyn,
“Financial Sector Reforms in China” Finance
and Development, pp. 18-21
(CP). Study Census Projections for East
Asia at www.census.gov DoC Handouts. DoC handouts. Study and learn this data.
6.
June 17: Financial Markets
(Continuation
of lesson 5)
Diversity
of currencies, monetary systems
·
Yen, fully
convertible, floating
·
Won,
NT$ near full convertible, floating
·
HK$, peg
but convertible
·
RMB, peg
and non-convertible
Assignment “BigMacCurrencies” Economist Ap. 3, ’99, p. 66
(CP) “Long-run Determinants to
E. Asia Real Exchange Rates, Federal Reserve Bank of San Francisco Ap. 10, 1998 (CP); Country pages, IMF/IFS
(L).
7.
June 19: Japan, Economic History, Economic Culture
Economic
history
·
Corporate
structures, cartels, vertical and horizontal oligopolies.
·
Nature of
competition in a homogenous society
·
Role of
government
·
Demographics
A rich but
flat economy; “steady state” or “big
bang”?
Assignment Katz pp. 21-196; (R); “Fall of a Keiretsu” Business
Week March 15, 1999 pp. 87-92
(CP); Lewis Clash of Cultures pp. 257-272 (R)
8.
June 24: Japan’s Financial
System A “steady state” or a “big
bang”?
·
Role of
banks
·
Stock
markets
·
Exchange
rate issues
·
Foreign
investment issues
·
Mergers and
acquisitions
Assignment Katz
pp. 272-346; Brown “Bubble Economics” (CP)
9. June
26: Korea: A “V” Shaped Recovery
History,
geography, culture
Current
Conditions—what shape recovery?
·
Foreign
versus domestic savings.
·
FDI in
Korea
·
Chaebol
structure, reform.
·
Liberalizing
the capital account.
Trade
Issues with United State
North
Korea’s famine, Security Issues
Assignment Brown “Savings and Investment in Korea” KDJ
Foundation by email. Fukuyama, Trust pp. 127-145
(R); Brown, “North Korea
Economic Collapse”, Baker Institute, Dec. 1998, by email. (CP).
10.
July 1: China’s “Socialist
Market”
·
Economic
history and culture
·
Major
characteristics, geography, natural resources, demographics
·
Teng
Xiao-ping’s Reforms
·
Development
of domestic markets
Assignment (R); Lewis, When Cultures Collide, 273-284
(R)
11.
July 3: Quiz , Video “The Pacific Century”
July 5: Holiday
12.
July 8: China and WTO, Reform
Issues
Ideological/structural
Issues
·
Ownership
of capital
·
State
firms, village firms, private firms, and foreign firms
Foreign
Trade and Investment Issues
World Trade
Organization Membership
Assignment
Lardy pp. 21-222;
13.
July 10: Taiwan, Hong Kong, and
Overseas China
Taiwan – a
better saver than investor?
·
Small scale
industry
·
Trade
relations with China
·
Relationship
with US, Japan
Hong
Kong—How long can special status survive?
·
Border
issues
·
Currency
and capital markets
Overseas
Chinese
Assignment
Handouts
14
July 15: Catch up and Review
July 22 EXAM