China, Japan, Southeast Asia and the Global Economy

To properly consider the impact of integrating with the global economy on China, Japan, India and Southeast Asia, it is useful to first define the global economy. When did it come into being? Frank (1998) posits that a global economy had existed since the start of the thirteenth century. Although financial flows were limited, there was a burgeoning exchange of commodities between Asian and European economies. Of the Asian economies, China and India stood out for the extensiveness of their trade links and magnitude of their trade volumes. Both countries traded with Southeast Asia, the Islamic world, the Mediterranean and European countries. In addition, China traded with the Middle East and North Africa.

However, while the extant global economy in 1500 spanned three continents, it could not considered truly global until the America had properly joined it. Flynn et al. (1995) place the birth of global trade in 1571 – the year the city of Manila was founded and a permanent and direct trade link between the America and Asia consequently established. It marked the beginning of an era in which all important populated continents exchanged goods continuously and in volumes of significant value. Integration with the global economy meant an actor making the move from a regional stage, to playing any or more than one of a few roles in the global arena – producer or consumer of commodities, products, money or services or that of entrepôt.

Within Asia, the main participants in the global economy were China, India, Japan and Southeast Asia. Each exported commodities and goods, which were sought after overseas, in exchange for foreign commodities and goods. China was famed for its exports of porcelain and silk. These were much sought after as ...

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