The process of trade liberalization and market-oriented economic reform that had started in many developing countries in early 1980s and intensified in the 1990s. The reform undertaken varied in ownership and contents in different countries. This issue now is at the central of global debate and becomes an attractive topic today. Bruno (1997) thought that trade liberalization would improve resource allocation efficiency and encourage economic growth by introducing competition and benefit local consumer by decreasing cost per unit. Agion and Montiel (1996) argued that trade liberalization would not necessarily result in declines of employment and output and negative balance of payment. Sachs and Warner (1995) show in his multi-country cross-section analysis that the short-run impact of trade liberalization on one country’s economic growth depends on the structure of that economy.
Under the fold of globalization, Asian economies are also impacted by economic reform measures including trade liberalization. However, despite of these arguments, I totally think that economic reform measures including trade liberalization have been contributing positively to bringing the growth of Asian economies and benefits that it achieved will outweigh its drawbacks as well as it will help the Asian economies integrate rapidly and develop considerably.
The purpose of this paper is to analyse the performance of a sample of Asian countries which undertook trade liberalization and economic reform since early 1980s. Particularly, this essay will look at the contribution of trade liberalization to Chinese economy and some consequences from the impact of global financial crisis as well as its recovery and prospects for the future.
An overview of globalization and economic reform measure – trade liberalization
Globalization is one of the most controversial issues of the early twenty-first century. There are currently many academic debates about globalization including its exist (Unger, 1997), its today’s importance (Bordo, Eichengreen, and Irwin, 1999), its displacing the nation state (Strange, 1996; Wade, 1996), and its importance than regionalism (Fishlow and Haggard, 1992; Oman, 1994) or localism (Rosenau, 1997a). However, there is no generally accepted definition of globalization, mostly, it just concentrates on the economic components. According to (1)’s study, globalization is separated into four major relevant aspects: macroeconomics (trade and finance), microeconomics (the technological revolution and the production process), culture and the media, and pressures for democracy and human rights. (1)
It is clear that globalization has considerably affected on the world economy. Especially, developing countries themselves had to take some vital steps before the full effect of globalization could be felt. Specifically, they had to open their economies, to lower the trade barriers and capital flows that had been an essential component of the import-substitution industrialization model. (1) And in all of the economic trends involved in globalization, the globalization of finance has been considered the most dynamic with the strongest impact on the behavior and performance of developing countries.(1) Other approaching about the nature of globalization can be achieved by noting with whom developing countries trade and from where investment comes. Based on data for the first half of the 1990s, a clear distinction can be made (Stallings and Streeck, 1995). Asian developing countries mainly traded among themselves and with Japan, and a growing share of their investment also came from within the region. In Latin America, in contrast, trade and investment were heavily weighted toward the United States, especially in the northern tier of countries. In Africa and Eastern Europe, economic transactions focused on Western Europe.(1)
Also, liberalization, then, is the other side of...