China and East Asian trade: the decoupling fallacy, crisis and policy challenges

Premachandra Athukorala, Archanun Kohpaiboon

    Research output: Chapter in Book/Report/Conference proceedingChapter

    Abstract

    This paper examines the export experience of China and other East Asian economies in the aftermaths of the global financial crisis against the backdrop of pre-crisis trade patterns. The analysis is motivated by the ‘decoupling’ thesis, which was a popular theme in the Asian policy circles in the lead-up to the onset of the recent financial crisis, and aims to probe three key issues: Was the East Asian trade integration story that underpinned the decoupling thesis simply a statistical artifact or the massive export contraction caused by an overreaction of traders to the global economic crisis and/or by the drying up of trade credit, which overpowered the cushion provided by intra-regional trade? What are the new policy challenges faced by the East Asian economies? Is there room for an integrated policy response that marks a clear departure from the pre-crisis policy stance favoring export-oriented growth? The findings caution against a possible policy backlash against openness to foreign trade arising from the new-found enthusiasm for rebalancing growth, and make a strong case for a long-term commitment to non-discriminatory multilateral and unilateral trade liberalization.
    Original languageEnglish
    Title of host publicationChina: The Next Twenty Years of Reform and Development
    Editors Ross Garnaut, Jane Golley & Ligang Song
    Place of PublicationCanberra
    PublisherANU ePress
    Pages193-219
    Edition1
    ISBN (Print)9781921666285
    DOIs
    Publication statusPublished - 2010

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