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Economy Over Security: Why Crises Fail to Impact Economic Behavior in East Asia

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Technical Report

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Naval Postgraduate School Monterey United States

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This study examines changes in economic behavior in East Asia following various periods of political crisis with China and explains these patterns through the lens of mercantile realism and dual hedge theories. Japan and South Korea have drastically increased their trade with China, a potential security adversary, at the cost of trade with the United States, a long-time security partner. Analysis of export trends from Japan and South Korea indicates that these countries do not take economic action to distance themselves from China in favor of the United States or Association of Southeast Asian Nations ASEAN following a crisis. Export data also indicates that Japan and South Korea continue to trade strategically important goods like steel and petroleum to China, despite the fact that these goods have a greater potential to affect regional security. Finally, this study highlights how Japans economic weakness and South Koreas economic integration severely hamper any future prospect to use economic pressure to influence Beijings security decisions.

Subject Categories:

  • Economics and Cost Analysis

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