This article examines how management-labor relations and labor legislation have evolved in China since Deng Xiaoping's “Open Door” reforms were introduced in 1979 and how they have changed over the two decades since then. We reconsider the role of Chinese trade unions, enterprises and the state agencies involved, as they move from an employment system that was once called the “iron rice bowl” to a new one based on market forces. This change raises serious dilemmas and issues: are there contradictions between preserving workers' rights and at the same time, enhancing productivity? Does such a transition constitute the onset of “collective bargaining” and a labor-market in the Western sense? How are such shifts likely to be affected by China's entry into the WTO in late 2001? These and other related questions are analysed in the article.

This paper argues that “China threat” was largely a myth and that the China factor was not the critical factor leading to the re-affirmation process of the U.S.-Japan alliance in the mid-1990s. It took the 1994 Korean crisis for this to materialize. The China factor was important only as a general background, and the role of the U.S.-Japan alliance in dealing with the rise of China was implicit, remaining in the domain of managing shifting major power relations after the Cold War rather than being directed against the myth of a “China threat.” The paper also argues that preoccupation with Japan as an independent security pole is an important source of confusion about the nature of Japan's security policies and its profile therein, which, as before, will continue to be premised on the U.S.-Japan alliance. It explains actual records of Japanese security behaviors as a series of attempts to cope with the dual identity as a security actor. Japan's readjustment to the post-Cold War security environment, founded upon the re-affirmation of the U.S.-Japan alliance, was a clear case in point.

The preconceived image of the pre-modern East Asian region order, known commonly as the tributary system, is problematic. That is because it is represented by ‘the Other’ — not only the external (Westerners) but also the internal (Asians) — and in turn the inaccurate image has gone on reproducing, expanding, and dominating. In order to solve this problem, in question, this paper will first critically review the preconceived image of the pre-modern Chinese world order and identify the problems of Orientalism and modernism. Then, in search for a real image, the paper reinterprets Confucian ideas and concepts as the principles undergirding the pre-modern East Asian regional order. The paper also discusses the Korean kyorin system, one of the subsystems of the pre-modern East Asian order. The objective is to decipher the ways in which Korea interpreted and institutionalized the Confucian ideas on foreign policy or international relationships during the Choson dynasty (1392–1910).

By doing these, we can describe a more real image of the pre-modern East Asian region order. The more “real” interstate relationship was based on li (principle) and li* (rites), and harmonized with another concept of gong (the public/publicness), as shown by pingfen or junfen (the fairly allocated). Based on such conceptions of the human world, the pre-modern East Asian regional order was divided into different territories and dominions, each with its own sovereign. Once the formality of the suzerain and tributary state was recognized, moreover, China did not intervene in the internal and external affairs of the tributary as well as hushi (a foreign trade system) states. Like interpersonal relationships, interstate ones were hierarchic, but they were also based on the idea of reciprocity, fair allocation as well as impartiality, harmony, and coexistence.

This article compares the process of corporate structural reforms in Japan and South Korea in the late 1990s and raises two questions. Why have state-led economies such as Japan and South Korea engaged in politically costly corporate structural reforms in the late 1990s? What explains the variation in the reform process between Japan and South Korea?

I argue that the process of structural reforms in state-led economies has been the result of state mediation of global financial forces. The rise of portfolio capital inflows increases the pressure for domestic reforms, a change that is common to Japan and Korea in the late 1990s. However, the actual success of structural reforms depends on the ability of the elite bureaucracy to mediate among between global investors, domestic interest groups and the general public. In contrast to Korea, Japan exhibits a low level of bureaucratic control over the legislative agenda and a situation of tripolar deadlock.

The evidence presented here includes quantitative data, government documents, and legislative records as well as information gathered from over 100 interviews with bureaucrats, politicians, business leaders, labor leaders, and other actors in the two countries.

South Korea and Japan responded to their financial crisis of the late 1990s by restructuring financial institutions. Also, financial authorities were created to supervise financial institutions and lead financial restructuring. Financial restructuring focused on the resolution of non-performing loans that had been contributing to financial failures and on strengthening their equity capital bases for sound management. Huge amounts of public funds were mobilized to pursue these policy goals. The Korean government took more drastic measures by closing or merging many failing financial institutions. Financial restructuring also facilitated bank concentration in Korea — and Japan — giving births to several mega banks. Both governments of Korea and Japan encouraged bank concentration by allowing the establishment of a financial holding company. The Korean government was more actively involved in merging banks while Japanese bank mergers were taken by business initiatives.

Financial restructuring is expected to bring more market oriented business practices among financial institutions and loosen cooperative ties among financial institutions, corporations, and financial bureaucracy in both countries. Close bank-corporation ties through main bank system and corporate networks within a business group are being loosened in Japan particularly since concerned parties have come to seek market rationality over loyalty. On the other hand, the intervention in financial sector and the mediation in bank-corporation relationship by financial bureaucracy are expected to be weakened in the case of Korea. Nevertheless, discretionary power of Korea's financial bureaucracy appears stronger for the time being since it took the helmsman of determining which financial institution is out of market.