ABSTRACT
As the 1990s began, the regional and international environment in which both Korean states had taken shape underwent profound change. The most visible political signs were the end of the Cold War and the collapse of global Communism in 1989, but the outright collapse of the Soviet Union and the ongoing major economic reformation of China in turn highlighted major structural changes in the international economy. The substance of these changes was an unrelenting drive towards globalization, economic liberalization and the competitive pursuit of investment capital, which resulted in economic restructuring in many protectionist states aimed at lowering barriers to foreign competition in their domestic markets. This environment brought a new set of challenges to bear on the two Koreas and profoundly affected both states, although in contrasting ways.
