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China's development has been darkened by an increasing imbalance between consumption and investment and the subsequent accumulation of non-performing loans, and such imbalance originates from the social political institutions underlying the China boom. China's economic imbalance is a source of the global economic imbalance that eventually fostered a global financial collapse in 2008. China is far from a solution to the global economic turmoil.

This chapter discusses the reasons for studying and revisiting public finance. It explains that the reengineering of public finance in response to the rebalancing of markets and states has brought a host of changes to public financial management and has also led to the emergence of various issues affecting public finance including contracting out, private solutions to externalities and private financing of public sector projects. In addition, globalization has also led to greater scrutiny and more international debates concerning modes of public finance.

This chapter discusses the impacts of the global financial crisis on the Thai economy and the policy responses. Against the backdrop of a slowly growing global economy in the future, the chapter suggests that Thailand seriously re-think about rebalancing its economy so as to increase its resilience to external shocks. One option is to develop a strategy to increase domestic investment, which will have to be mainly public investment as the private sector has been considerably weakened by the crisis. Another option is to raise productivity by improving human capital rather than by relying on accumulating imported capital which has proven to be unsustainable in the long-term.

This chapter argues that Malaysia, being a small open economy with a strong export-dependent manufacturing sector, was particularly vulnerable to the global financial crisis. This chapter discusses the importance of trade to the economy and Malaysiafs reliance on demand generated by developed economies. The chapter analyzes the impact of the current crisis on the Malaysian economy and highlights the need to find new ways of thinking about how the country should re-position itself, since the crisis undermines the assumptions on which the countryfs growth strategy is based. It then suggests that Malaysia adopt a rebalancing strategy in response to the crisis.

Rebalancing growth patterns of Asian economies is an important component of the overall rebalancing effort that will be required in the world economy. This chapter provides an empirical characterization of the composition of GDP levels and growth rates for the key emerging markets and other developing economies in Asia. To examine the global implications of domestic growth patterns in Asia, the chapter analyzes saving-investment balances, the composition of national savings, and the determinants of the evolution of household saving rates. Finally, the chapter discusses some policy implications that come out of the analysis on how to shift the patterns of growth, especially in the PRC, from a welfare-enhancing perspective

The foundation of long-term investing is to rebalance to fixed asset positions, which are determined in a one-period portfolio choice problem where the asset weights reflect the investor’s attitude toward risk. Rebalancing is a counter-cyclical strategy that buys low and sells high. It worked well even during the Great Depression of the 1930s and the Lost Decade of the 2000s. Rebalancing goes against investors’ behavioral instincts and is also a short volatility strategy.

Actively managing a portfolio involves three main activities: asset allocation (designing and maintaining the relative asset class weights), asset selection (selecting assets to match the allocation), and market timing (deciding when and how much to invest). This chapter looks at asset allocation models—theoretical and practical templates that active asset managers use to make the asset allocation decision. Asset allocation models examined include the Markowitz model and alternative (skewness, stochastic dominance, and ad hoc) models. The chapter also discusses the models actually used in practice and portfolio rebalancing. Many observers, influenced by a continuum of research, believe that asset allocation is by far the most influential factor explaining the variability in portfolio performance. Only recently does research support the roughly equal importance of asset selection and asset allocation with market timing a distant third. Regardless of the precise influence accorded to any of three activities of active management, asset allocation is sensibly an essential ingredient in portfolio design and performance.

Trading strategies translate goals and constraints of asset management into dynamic, intertemporal, and coherent portfolio decisions. Under special assumptions, myopic portfolio policies are shown to be optimal and constant over time. In general, however, both optimal theoretical portfolios and current portfolio positions are subject to random movements so that periodic monitoring and rebalancing are necessary. Transaction and monitoring costs create a tradeoff between the cost of not being at the optimal allocation (tracking error) and the cost of swapping the current portfolio for the optimal one. Optimal rebalancing results in the replacement of the optimal allocation with a no-trade region delimited by rebalance boundaries. The factors influencing the boundaries and the rebalancing decisions can be analytically and numerically explained. Popular rebalancing rules imply a substantial amount of excess trading costs, but they can generate positive net returns in the case of mean-reverting market regimes.

This chapter presents the components of our theory of policy asset pricing as observed in British government between 1971–2000. It offers a descriptive account of elements of our theoretical approach in this important period of political history, providing a sense of how governments react to situations that vary on fundamentals of the policy attention market—return, risk, and price signal uncertainty—that are important to any party or government. Shocks to the public’s valuation of policy domains from competence factors are illustrated. Through rebalanced policy portfolios, we observe what key political decisionmakers did with the discretion available to them in regard to the prioritization of public policy domains. The chapter provides our first empirical view of the role of policy prioritization in statecraft.

In the late 1990s, the growth of a stark national imbalance with ‘overheated’ housing markets was experienced in the South of England, as well as ‘low demand’ for housing in parts of the North. The policy response to the issue of low demand was to create a Housing Market Renewal (HMR) programme, whose central task was to restore sustainability to inner-urban-housing markets. Nine HMR Pathfinders were established after funding was announced in the 2002 Comprehensive Spending Review, and the policy was launched in the Sustainable Communities Plan. This chapter describes the extensive empirical research conducted around the HMR process in East Manchester between 2004 and 2008. Regeneration was aimed at East Manchester, which ‘read up’ to the overarching aims of Manchester City Council for the city as a whole. Hence, in terms of principles for the renewal of individual neighbourhoods, a key aim was the restructuring and rebalancing of skewed physical attributes of the housing market. The process of urban-housing-market restructuring enacted in East Manchester involved, inter alia, the creation of aspirational, market-orientated housing in neighbourhoods that were explicitly aimed at new incoming residents, with the intention of effecting a social transition. There is a transition in the type, form, and mixture of housing types; the balance of tenure; and the way security is provided and the neighbourhood managed.

Southeast Asia has strong ties with China in the areas of economics, diplomacy, and culture. China also has a security interest in the South China Sea, which has become a major source of conflict between China and the United States, due to American fears that China’s military buildup in the South China Sea may threaten American “freedom of navigation” in the sea and the entire Western Pacific. China’s main interest in Southeast Asia is defending its sovereignty and security in the South China Sea.

With the exception of the Philippines, America’s strategic interest in and engagement with Southeast Asia begins with World War II. Prior to that “Monsoon Asia” was remote and exotic—a place of fabled kingdoms, jungle headhunters, and tropical seas. By the end of the nineteenth century European powers had established colonial rule over the entire region except Thailand. Then, as the twentieth century dawned, the Spanish colonial holdings in the Philippines suddenly and unexpectedly became available to the United States as an outcome of the Spanish-American War and Admiral Dewey’s destruction of the decrepit Spanish fleet in Manila Bay. This chapter examines the strategic pivot in Southeast Asia and the role China plays in affecting the U.S. position in this region.

This chapter examines the decline of Japan's relative power in the Asian region from 2006-15 as a result of China's rise and the rise of other Asian states, with a focus on security implications for Japan.

This chapter examines the policy mistakes that the Obama administration made in managing the Sino-American relationship. The Obama administration developed no distinct China strategy and was in fact averse to developing such a strategy. It chose to embed largely reactive China policies within a regional strategy of the so-called “pivot” or “rebalance” to the Asia-Pacific region. While China was relegated to a management issue, the rebalance strategy damaged the US-China relationship by deepening strategic mistrust between the two countries and agitating China to seek strategic adventures in Asia. The rebalance did not cause Chinese assertiveness by itself, but the geopolitical setting it created served to exacerbate China’s already fermenting assertive inclinations and prompted its strategic adventurism.

This chapter introduces the post-2008 historical context of crisis and restructuring, where communications have become a new epicenter of political-economy transformation and a crosscutting tool for economic recovery and industrial upgrades. It also introduces the themes of this book, that is, the centrality of communications to Chinese-style capitalism, the state’s constitutive role in the evolving networked economy, and, lastly, the relationship between the state-dominated communications system and the global digital economy.

This chapter examines an area of policy neglected in the IR literature- that of the form and role of multilateral military exercises, in this case in the Indo-Pacific. The chapter begins with a vignette about the world’s largest - the Rim of the Pacific (RIMPAC) exercise - in which the Chinese both participate while simultaneously spying on it, with the knowledge of the US who organize the event. The central point of the chapter is to demonstrate how the United States pursues a liberal strategy of leadership in a variety of exercises across the Indo-Pacific.