US economic relations with East Asia: From hegemony to complex interdependence?
In the period immediately following the re-election of the George W. Bush administration when this chapter was written, the days when an incoming US President had been sighted reading a copy of Japan as Number One seem very far removed indeed.2 For some observers, the economic relationship between the United States and East Asia was turned on its head in the twelve years after the inauguration of the ﬁrst Clinton administration. US economic weakness was transformed into strength as the productivity gains achieved in the US economy from the early 1990s onwards re-established the US lead over East Asian economies. Not only has Japan’s “lost decade” stretched into ﬁfteen years, ensuring that the Japanese model is now widely perceived as an “anti-model”, but the selfconﬁdence of other Asian governments was severely shaken by the ﬁnancial crises of 1997-98. Western ﬁrms were able to snap up assets in the crisis economies at ﬁre-sale prices. Meanwhile, the intrusive policy conditionality that accompanied IMF rescue packages attempted to re-cast the crisis economies in the Anglo-American mould. Business as usual has been restored, with a resurgent US able to impose its economic agenda on its recalcitrant East Asian economic partners.