September 2002, Vol. 8, No. 2

Demography
Demographic Change and Regional Affiliations in East Asia

Many political scientists and international economists imagine a world future in which there are three dominant regional blocs: the European Union, a Western Hemisphere grouping centered on the United States, and East Asia. The North American Free Trade Association (NAFTA) is a move toward Western Hemisphere regionalization. Various similar efforts at regional integration have been attempted in East Asia. 

Although most research on regionalization lies within political science, significant demographic influences on the process warrant examination. Recently, Population Council demographer Geoffrey McNicoll explored these influences in the East Asian case—examining how population change is affecting the emergence of Asian regional affiliations and identities, from simple trade pacts to deeper levels of economic and even cultural integration. 

Regional leadership: China and Japan 
Stable regional affiliations can evolve among a group of countries with roughly comparable size and technology, as happened in Europe or the subregion of Southeast Asia. They can also evolve where one country is an uncontested dominant power, as in South Asia or (in a plausible future) the Western Hemisphere. The region of East Asia—from Japan to Myanmar—is not like either of these situations: it has two major powers, Japan and China. This feature, notes McNicoll, “makes for a distinctive structural problem in regional architecture.” 

China and Japan are on vastly different economic and demographic trajectories. China’s economy is burgeoning; Japan’s is stagnant. A shift in regional leadership is already anticipated: according to prominent Japanese management guru Kenichi Ohmae, “In the future, Japan will be to China what Canada is to the United States, what Austria is to Germany, what Ireland is to Britain.” 

Demographic contrasts play an important role in this changing perspective. The difference in age structure is the most obvious of these. China is about 30 years behind Japan in the proportions of the population over age 60. Currently 10 percent of the population in China is over 60, compared with 23 percent and steeply rising in Japan. But although Japan has a larger immediate problem in confronting population aging, it is also institutionally far better equipped to deal with this situation than is China. 

Japan, moreover, does not have to deal simultaneously with rural-to-urban migration: it is fully urbanized. China, in contrast, will likely have to absorb hundreds of millions of rural migrants into its cities over the next several decades—a daunting prospect should the country’s economic growth falter.

Migration and regionalization 
By world standards, there is strikingly little migration between the countries of East Asia. Japan, an obvious target for economic migrants, has less than one percent foreign-born in its population. But absence of migration need not be a mark of weak economic ties. In fact, migration is a highly inefficient process of linking economies, says McNicoll. It is much more practical to move management and technology abroad than to import labor. 

Prospects seem to be scant that any East Asian version of the common labor market of the European Union will appear. Even in North America, the evolution of NAFTA into a common market is firmly resisted. Paradoxically, he notes, the prerequisite for such an agreement is the likelihood that any permanent migration under it would be minimal. At most, some subgroup of East Asian states might negotiate mutual labor market access for their citizens. 

Economic vs. cultural bases for regional integration 
Expectations about East Asia’s economic future used to draw on the image of flying geese, with Japan always in the technological lead but steadily shifting more labor-intensive industries to other, lower-wage economies in the region—the trailing geese in the flight. Economic geographers have such a picture in mind when they describe emerging networks of cities—a hierarchy with Tokyo as the region’s “global city,” followed by Singapore, Seoul, and Taipei, also with “command and control” roles, then the large manufacturing centers like Shanghai and Bangkok. All of these are located in a vast urban corridor stretching from Yokohama, Japan to Surabaya, Indonesia, drawing together most of the region’s economies. 

The impetus for development along these lines still exists, but McNicoll also lends credence to a competing principle of regional organization, deriving from the Chinese ascendancy. A China-led regionalization may evolve, incorporating Taiwan, Hong Kong, Singapore, and to some degree other Southeast Asian countries in which Chinese-owned firms play a dominant role. “The demographic dimensions of regional change will be a significant factor in determining whether economy or culture emerges as the dominant principle of regional organization—a choice with profound implications for East Asia’s political landscape,” McNicoll concludes.

Source
McNicoll, Geoffrey. 2002. “Demographic factors in East Asian regional integration,” Policy Research Division Working Paper no. 158. New York: Population Council. (PDF)

Outside funding
Japan Foundation Center for Global Partnership

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See Also

• "Population weights in the international order," Policy Research Division Working Paper no. 126 (PDF)