SEA CHANGE

An instructive appraisal of the ongoing shift in the world economy's balance of industrial power from the North Atlantic to the Pacific Basin. By the turn of the century, suggests Abegglen (International Business/Sophia University, Tokyo), greater East Asia (coastal China, Indonesia, Japan, Korea, Malaysia, Singapore, Taiwan) could have a gross domestic product of approximating $6.7 trillion, nearly 50% greater than 1990-92 levels and almost a fourth of the global whole. On many scores, the author observes, the region appears to offer outsiders a wealth of commercial opportunity. Reasons for this include the market potential offered by over 800 million increasingly affluent residents; political stability; generally responsive governments committed to promoting sustainable growth; viable financial institutions; and the entrepreneurial influence of overseas Chinese. There are challenges as well, the author warns, in large measure because consistently high savings rates, prudent fiscal policies (which have allowed local regimes to accumulate sizable foreign reserves), years of manufacturing experience, infrastructure investment, and indigenous development programs mean that East Asia no longer depends exclusively on the West either for capital or advanced technology. With the aid of anecdotal examples, however, Abegglen evaluates the strategic options still available to US and European enterprises on a country-by-country as well as area basis. In the course of his audit, he leaves little doubt that America's leverage is on the wane, owing in part to elimination of the security threat once posed by the erstwhile USSR. He also puts paid to any notion that Dai Nihon's WW II foes hold grudges bitter enough to keep them from trading and/or treating with neighborhood behemoths. A first-rate status report on a large corner of the earth that could have the EC and NAFTA scrambling to match its breakneck pace. (Graphs; maps throughout—not seen)