Japan Center for Economic
ResearchPreface
The Japan Center for Economic Research (JCER) has published its FY2023 Asia
Research Report under the title Derisukingu-ka no Hokutō Ajia Keizai [The Northeast
Asian Economy Under De-risking].
“De-risking” is an approach to mitigating risk based on preventing excessive
supply chain reliance on specific countries and outflows of advanced technologies tocertain states, while still maintaining economic relations with them. In recent years, it
has come to be used among global policymakers as a concept distinct from decoupling,which involves imposing regulations to block investment and trade between countries
and regions, thereby preventing their interlinkage.
As infrastructure shared by the international community, the worldwide economic
networks that developed under globalization in the post-Cold War era continue tosupport growth, deepening the interdependence of global society. However, due to theCOVID-19 pandemic and Russia’s invasion of Ukraine, the world has been hit bysupply problems involving everything from medical products to food and energy, withits most vulnerable countries particularly badly affected. This has, at a stroke, exposedthe vulnerability of global supply chains.
Some countries have made noticeable moves to leverage their relationships ofeconomic dependence and their own powerful markets in an effort to enhance theirinterests and expand their influence by force. As the horizons of security have expanded
to encompass the economy and critical/emerging technologies, some commentators
have pointed out such issues as the theft of intellectual property and sensitivetechnologies. Attention is also focusing on the problem of the debt trap—development
finance provided without regard for another country’s debt sustainability. Competition
between major powers, most notably the rivalry between the U.S. and China that
intensified as the post-Cold War era ended, is one factor behind this issue, but it is nolonger an age in which rival parties can fully decouple from each other. Amid thissituation, the term “de-risking” has suddenly been propelled into the spotlight todescribe the concept of emphasizing risk mitigation; indeed, it was even used in theMay 2023 G7 Hiroshima Leaders’ Communiqué.
Having undergone rapid economic growth during the wave of post-Cold War
globalization, Northeast Asia is one of the regions in which de-risking is probably ofgreatest importance. When the Berlin Wall fell in 1989, the Cold War structure remained
firmly entrenched in Northeast Asia. However, this region, too, did enjoy a peace
dividend to some degree as a result of changes in international systems, in the form of
the Soviet Union’s collapse and the normalization of diplomatic relationship between
China and South Korea, as well as the development of exchange and cooperation
between formerly warring neighbors North and South Korea, and China and Taiwan. Inaddition, regional cooperation spread via frameworks such as Asia-Pacific EconomicJapan Center for Economic Research

Cooperation (APEC) and trilateral meetings involving Japan, China, and South Korea,
while economic integration has been progressing through moves including the 2022
entry into force of East Asia’s Regional Comprehensive Economic Partnership
Agreement (RCEP).
Although Northeast Asia took the world by surprise with its rapid economic
development, jockeying for position by relevant countries with an eye to the futureinternational order has also intensified in this region, in which industries and advanced
technologies continue to accumulate. As relationships of economic interdependence
have grown closer, the geopolitical risks have also increased. Economic security is a key
issue for all countries and regions, and the risk that Northeast Asia could become thefront line of a new Cold War has surfaced. How are the countries and regions associatedwith Northeast Asia seeking to mitigate their economic risk? This report examines andanalyzes moves on the front line from a multifaceted perspective, and also considers
Japan’s response. The project received financial assistance from the Korea Foundation.
We hope readers will find this report helpful.

June 2024
Atsushi Ijuin
Lead Economist, Japan Center for Economic Research

Copyright Ⓒ 2015 JCER

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