FREE ELECTRONIC LIBRARY - Online materials, documents

Pages:   || 2 | 3 | 4 | 5 |

«KAMIKUBO Masato Introduction Analytical Framework: Core Executive Theory Internationalisation of the Yen and the Yuan Analysis: Comparison of ...»

-- [ Page 1 ] --

‘Internationalisation of Yen’ or ‘Internationalisation

of Yuan’: Policy Science of Domestic Decisionmaking Processes for Asian Monetary Cooperation



Analytical Framework: Core Executive Theory

Internationalisation of the Yen and the Yuan

Analysis: Comparison of Japanese and Chinese International Monetary Policy Processes

Since the global financial crisis of, China has been expanding its influence in the

international financial community. Zhou Xiaochuan, the governor of the People’s Bank of China, drew attention with his mention of the possibility that IMF’s special disposal right (SDR) could be a new currency regime replacing the current dollar standard system (Zhow, ). In addition, in line with the rapid growth of the Chinese economy, the yuan distribution volume in neighboring states and regions has increased, and the yuan has become the reserve currency in some countries (Ohnishi, ). Currently attention is focused in particular on the trend of the internationalisation of the yuan in the international financial community.

On the other hand, Japan also acted proactively in the financial crisis, with moves such as trillion yen in financial assistance for the IMF. However, Japan was criticised for its failure to provide a strong voice in the international financial community. In contrast to China, Japan appealed for the continuation of the dollar standard system, but did not gain much acceptance in the international financial community (Katada, ). Japan has been endeavoring to construct an international monetary cooperation system, and has provided leadership in economic assistance measures for the Asian currency crisis and in the construction of financial safety nets for Asian regions. Nevertheless, Japan had not exercised strong leadership in promoting the internationalisation of yen (Amyx, ).

Various economics and international relations studies have examined the issues of Mar.

internationalisation of the yen and internationalisation of the yuan. In economics, the internationalisation of the yen and the yuan has been the subject of policy debate. In general, economists have pointed out that the cause of the Asian currency crisis was the excessive pegging of Asian currencies to the US dollar, and have insisted on the necessity of Asian monetary cooperation and on the introduction of a common currency. In that light, there has been an

emphasis on the importance of the internationalisation of major currencies in Asia (Kwan, :

Murase, ). In addition, some experts have proposed a strategy for the creation of the Asian Currency Unit (ACU), a step to be taken subsequent to the internationalisation ofthe yen and the yuan (Ogawa and Ito, ). However, economists have not been able to provide an explanation for the failure of their proposed strategy of internationalising the yen and yuan to develop.

In international relations studies, one school of thought is that currency diplomacy can be also positioned on the projected line of reasoning underlying the view that Japanese diplomacy is ‘reactive’ (Terada, ). Adherents to that view point out that Japan lacks political leadership not only in international finance but also in currency diplomacy (Amyx, ), and has been acting only to maintain its international influence at the same level as China, in light of Japan's awareness of China’s rapidly growing influence in international finance (Terada, : ). Some studies support this view, pointing to the level of pressure from Japanese politicians and domestic industry concerning the delay in the internationalisation of the yen (Imamatsu, ; Katada, ).

Although international relations researchers point out the absence of Japan’s strategy and an increase in domestic pressure, they cannot provide a convincing mechanism of how such things occur. In international relations studies it is thought that Japan is an actor and its domestic economy is a black box (Shinoda, ). Analysis of domestic policymaking process is the domain of political science, but very few analyses consider the international finance and currency policies of International Bureau, Ministry of Finance (MOF) in Japan to be a political science research subject. Using a political science analytical approach, this paper undertakes an analysis of Japan's decision-making process for international finance and currency policies, until now regarded in international relations studies as a black box. The findings will be applied to an examination of the assertion by some international relations studies that Japan lacks strategy. In fact, Japan has constructed concrete international finance and currency policy strategy, mainly through International Bureau, MOF, but the political leadership to realize that strategy has been lacking.

This paper pursues the cause of this political leadership vacuum, focusing not on the capacity of politicians but on a comparison with China, to reveal that the true cause is a structural problem in Japan’s policy making process.

The structure of this paper is as follows. First, core executive theory is used to lay out the paper’s analytical framework. Then, the core executive structure of the policymaking process in Japan and China is clarified, and the two countries' processes are compared. A case study ‘Internationalisation of Yen’ or ‘Internationalisation of Yuan’ KAMIKUBO compares past processes of the internationalisation of free currency in Japan and China, using the paper’s analytical framework. The paper’s claim is as follows. In China, thanks to the topdown decision-making of the Communist Party and the State Council, the leader can easily display political leadership in the international financial community. In Japan, on the other hand, due to the bottom-up decision making structure in MOF, the Cabinet does not have the substantive right to decide. In addition, in that structure the Cabinet easily feels pressure from political tribes (zoku-giin) and the business world. As a result, Japan is unable to display political leadership in the international financial community.

This paper presents a comparison of the international finance and currency policymaking processes of Japan and in China, using the concept of the ‘core executive' (Rhodes and Dunleavy, ; Rhodes, ) which is currently drawing attention in policymaking process studies in Japan and overseas. ‘Core executive’ consists of central figures such as the Prime Minister, the Cabinet, the Cabinet Committee and high-level bureaucrats, i.e. those who eventually manage conflicts among organs within the central government. This is a model for the analysis of the informal meetings of those people; current systems and networks for negotiations among ministries and agencies; and the salient interdependences in customary practice (Rhodes, ). This model has been attracting heightened attention globally and it is thought to be applicable to Japan’s policymaking system (Ito, ).

In comparative politics studies, there has been almost no attempt to compare the political institutions of Japan and China. The reason for this lay in the differences between the political regimes: China is a communist regime while Japan is a democratic regime. Basically, Japan has been the subject of comparative studies with western democratic countries in terms of the parliamentary cabinet system, universal suffrage system, cabinet system, and bureaucracy (Silberman, ).

Still, it can be pointed out that the political systems of Japan and China have some similarities. For example, both countries were governed for a long time by one-party rule: the Liberal Democratic Party (LDP) in Japan and the Communist party in China. Although in Japan, the government changed in and one-party dominant system has ended, its political and administrative systems, which were constructed under the long-term rein, have many points in common with those of China. Concretely, the political and administrative systems have a dual existence, in party organisation and government organisation. In western democratic countries, on the other hand, policymaking is unified in the cabinet. Many western countries adopted the parliamentary system and there the majority party in the parliament (the ruling party) organises the Cabinet. Therefore, members of the ruling party participate in the Cabinet but the party does Mar.

not independently formulate policy (Onishi, :

- ).

Exceptional among the democratic countries which have adopted the parliamentary system, Japan has the ruling party taking dualistic part, along with the Cabinet, in policy-making. It is mainly socialist countries, such as China with its established one-party rule, which have such an organisational structure. In the case of Japan, since the rein of LDP and coalition governments centred around LDP has continued for such a long time (with months' exception in the period from and ), the political and administrative rules were established on the basis of the one-party rule principle. However, one profound difference between Japan and China is that the Communist party has the final word and ‘the government’s leadership by the Communist party’ is clearly specified in the constitution, while in Japan the Cabinet has the final decision making rights (Murakawa, ).

This chapter presents a classification of the core executive engaged in policymaking in China (Onishi, and other).

The Communist Party has the final word on Chinese policy decisions. The Communist Party Central Committee makes decision directly about matters such as diplomacy, economic policy, ethnic minorities and disasters. It also has final decision-making authority over the execution of policy. Various actors play important roles in policymaking in the Communist Party; the top decision makers within the Party are the nine major politburo standing committee members.

There is a hierarchy among those members: the top person is Hu Jintao, General Secretary of the Communist Party, President of the People’s Republic of China, and Chairman of the Central Military Commission. Second in the power hierarchy is Wu Bangguo, Chairman of the Standing Committee of the National People’s Congress; third is Wen Jiabao, Premier and Party Secretary of the State Council of the People’s Republic of China. Under the nine major members there are politburo members including the politburo standing committee members mentioned above. Under the politburo standing committee members are Central Committee members (including the above ), followed by candidates for Central Committee membership. The person in charge of international monetary and currency policy is number six, Huang Ju, Executive Vice Premier of the People’s Republic of China.

International monetary and currency policy are considered to be among the most important sectors of policy, and final decisions in those sectors are made directly by Hu Jintao and Wen Jiabao (Onishi, :

-) The State Council, equivalent to Japan’s Cabinet, formulates and executes concrete policy based on the fundamental principles of the Communist Party and its instructions. As mentioned previously, Wen Jiabao, Premier and Party Secretary of the State Council, is responsible for routine procedures regarding international monetary and currency policy. In addition, Huang Ju (Executive ‘Internationalisation of Yen’ or ‘Internationalisation of Yuan’ KAMIKUBO

–  –  –

Vice Premier) and Zhou Xiaochuan, (Governor of the People’s Bank of China) participate in the State Council. Although his ranking in the Communist Party is not high, Zhou Xiaochuan is well trusted by Wen Jiabao and attends the Standing Committee of China’s People’s Congress (equivalent to Cabinet meetings in Japan) despite his not being an official member. Executive members of the State Council are basically Communist Party members and the State Council and the Communist Party are virtually a single entity (Ohnishi, :- ).

Concrete details of the Chinese international monetary and currency policy planning process are as follows. First, the Vice Premier of the State Council and the members in charge in the State Council conduct hearings to ( ) receive reports on economic situations from the central Mar.

government ministries (such as the National Development and Reform Commission, the People’s Bank of China, and the Ministry of Finance) and a group of scholars with strong influence on policymaking in the State of Council, and ( ) to draw up lists of issues in international monetary and currency policy. Then, the Vice Premier in charge submits the international monetary and currency policy agenda to the Premier of the State Council. The Premier alone conducts a further round of hearings, receiving reports regarding agenda setting from related departments and scholars. Based on the findings of the hearings the State Council makes the final decisions.

Since international monetary and currency policy work requires great expertise, the Premier is responsible for carrying out routine practices in coordination with the departments in charge.

However, important issues require consultation with the Party and decisions are made and submitted under the names of both the Party and the State Council (Tanaka, : - ).

In China, the role of scholars and experts is not limited to offering opinions to the State Council. When the Communist Party and the State Council formulate new policy, scholars and experts announce those policies to the people of China and to the world in the form of papers and research outcomes submitted to academic journals and the mass media. Regarding matters such as finance, currency exchange and international trade, it is thought that experts including Wu Jinglian, Hu Angang (professor at Tsinghua University) and Yu Yongding have extensive influence (Kwan, ).

The central government ministries are organizations which execute policy according to the decisions of the State Council. The National Development and Reform Commission, the People’s Bank of China, and the Ministry of Finance are all involved in international monetary and currency policy. It is important to note that the central government ministries do not formulate policy: in that regard China's ministries are different from Japan’s central government ministries (Onishi, :- ).

Pages:   || 2 | 3 | 4 | 5 |

Similar works:

«Strategies to Reduce Perinatal Health Inequalities THE HEALTHY PREGNANCY 4 ALL STUDY AMBER A. VOS Strategies to Reduce Perinatal Health Inequalities The Healthy Pregnancy 4 All study Amber A. Vos Strategies to Reduce Perinatal Health Inequalities – The Healthy Pregnancy 4 All study PhD thesis, Erasmus University Rotterdam, The Netherlands Cover design: Roos van Oss | Trijnie Kroon tweelingkaartjesonline Layout and printing: Optima Grafische Communicatie ISBN/EAN: 978-94-6169-757-8...»

«THE JOURNAL OF FINANCE • VOL. LIX, NO. 6 • DECEMBER 2004 The Choice of Private Versus Public Capital Markets: Evidence from Privatizations WILLIAM L. MEGGINSON, ROBERT C. NASH, JEFFRY M. NETTER, and ANNETTE B. POULSEN∗ ABSTRACT We examine the impact of political, institutional, and economic factors on the choice between selling a state-owned enterprise in the public capital market through a share issue privatization (SIP) and selling it in the private capital market in an asset sale. SIPs...»

«Topics in Middle Eastern and African Economies Vol. 14, September 2012 HOW DOES STABILITY IN FINANCIAL OPENNESS AFFECT GROWTH? Erhan Aslanoğlu* Marmara University Pınar Deniz† Marmara University Abstract In the growth process, financing is needed to fulfill the potential for growth. If there is an insufficiency, the potential is said to be underutilized. It is suggested that financial openness prevents the congestion when the real side of the economy is in need of finance. Therefore, the...»

«The Eurozone Crisis: Time for a Reset March 19, 2013 by Giles Conway-Gordon of Cogo Wolf Asset Management 1. Summary The crisis in the Eurozone (EZ) has reached a dangerously unstable condition, politically, socially, financially and economically. Without a return to growth in the peripheral economies a disorderly outcome is becoming probable as the debtor countries approach the 100% debt-to-GDP default horizon. They will not return to growth while they share a currency with Germany. It is time...»

«1 Report to Rapport au: Finance and Economic Development Committee Comité des finances et du développement économique 5 April 2016 / 5 avril 2016 and Council et au Conseil 13 April 2016 / 13 avril 2016 Submitted on March 22, 2016 Soumis le 22 mars 2016 Submitted by Soumis par: Councillor Jean Cloutier / Conseiller Jean Cloutier Contact Person Personne ressource: Councillor Jean Cloutier / Conseiller Jean Cloutier 613-580-2488, jean.cloutier@ottawa.ca Ward: ALTA VISTA (18) File Number:...»

«Unedited Rush Transcript Event The Shift and the Shocks: What We've Learnedand Have Still to Learnfrom the Financial Crisis Martin Wolf, Financial Times Athanasios Orphanides, MIT Sloan School of Management Kevin Warsh, Hoover Institution, Stanford University Peterson Institute for International Economics, Washington, DC October 9, 2014 Adam Posen: Great man comes and that’s not me. Welcome everyone back to the Peterson Institute for International Economics. It’s a very pleasant evening....»

«Korosteleva, J. and Lawson, C. (2009) The Belarusian Case of Transition: Whither Financial Repression? Working Paper. Department of Economics, University of Bath, Bath, UK. (Unpublished) Link to official URL (if available): http://www.bath.ac.uk/economics/research/workingpapers.html Opus: University of Bath Online Publication Store http://opus.bath.ac.uk/ This version is made available in accordance with publisher policies. Please cite only the published version using the reference above. See...»

«Tradespeople Recommended by Residents of Cornerstone Place Updated 08/25/2016 RECOMMENDED TRADESPEOPLE Lox Shingleton of Kent Falls Court recommends ChemTech for eradication of sod webworms. They are excellent at termite control too. 281-391-0033. Call Miguel for lawn and shrubs at 832-212-3434.Tony & Marlene Adams of Kent Falls Dr. would like to recommend: Continental Irrigation Sprinkler System Repair Backflow Prevention Testing Robert Kerr (281-389-2333 www.katysprinklerrepair.com Licensed...»

«Recasting Egalitarianism Samuel Bowles and Herbert Gintis Department of Economics University of Massachusetts Amherst, Massachusetts, 01003 December 30, 1997 1 Egalitarianism On Its Own Radical egalitarianism is now the orphan of a defunct socialism. The unruly and abandoned child of the liberal enlightenment had been taken in by socialism in the mid-nineteenth century. Protected and overshadowed by its new foster parent, radical egalitarianism was relieved of the burden of arguing its own...»

«A stochastic dominance approach to program evaluation with an application to child nutritional status in Kenya Felix Naschold* and Christopher B. Barrett** *Corresponding author: University of Wyoming, Department of Economics and Finance, 1000 E. University Avenue, Laramie, WY 82071, fnaschol@uwyo.edu **Cornell University, Dyson School of Applied Economics and Management, 315 Warren Hall, Ithaca, NY 30 October 2010 Abstract: We propose a new method to evaluate program impacts across the entire...»

«Money Resolutions, a Sketchbook Ignacio Mas1 January 2015 Introduction Of resolutions and sketches Poor people are constantly making money resolutions. The term resolution is variously used to mean the process of increasing the visual sharpness of individual objects (e.g., with microscopes), of working out complications (e.g., in film plots), and finally of making determinations (e.g., by judges). These are all apt metaphors for how people organize their money matters, as they go about...»

«DEPARTMENT OF ARCHDIOCESE FINANCE AND LACE DEVELOPMENT Croxteth Drive Sefton Park Liverpool Tel: (0151) 522 1020 L17 1AA Fax: (0151) 522 1021 Email: g.sener@rcaol.co.uk OF LIVERPOOL Dear Applicant Re: Principal Officer: Strategic Planning and Access Vacancy Thank you for the interest you have shown in the above role. All of the documents you require to apply for this post are available for download and printing from the job pages of this website. This information pack provides you with the...»

<<  HOME   |    CONTACTS
2017 www.thesis.dislib.info - Online materials, documents

Materials of this site are available for review, all rights belong to their respective owners.
If you do not agree with the fact that your material is placed on this site, please, email us, we will within 1-2 business days delete him.