| Abstract: | Rapid economic growth in East Asia is changing the nature of international relations in the region. In the economic sphere, mercantilist policies of promoting exports and limiting imports contributed to economic tensions between rapidly growing economies in the region and the region's major trading partner, the United States. These tensions over bilateral trade issues began between Japan and United States, moved on next to South Korea and Taiwan, and have now moved from there to China. In the security field, economic growth in China is leading to a major shift in the balance of power in the region. China's steadily increasing GDP is being accompanied by a comparable rise in its military expenditures despite the fact that China faces no obvious external threats at the present time. China's long term desire to be able to defend against any outside power probably means that this increase in defense expenditures will continue for the next decade or two. North Korea continues to be a threat to stability in the region but only because of its capacity to do enormous damage in one last suicidal attack. The one area where China's rising military expenditures could lead to major confrontation on terms very different from those that would occur today is Taiwan. |
