Regional overview – China and Northeast Asia

Although 2009 ostensibly brought change to Northeast Asia, given a worldwide economic slump, a historic change of government in Japan and North Korea's second nuclear test, this change has actually only reinforced underlying trends that have driven the region's security outlook since the end of the Cold War.

The rapid economic growth of China in 2009, with expansion of 8.5 per cent expected for the full year by IHS Global Insight, stands in sharp contrast to the performances seen throughout the developed world. The most developed economies in the region, Japan, South Korea and Taiwan, are likely to see either significant declines (of 5.3 per cent and 3.8 per cent in Japan and Taiwan) or anaemic growth (0.1 per cent in South Korea).

The differences in these growth rates have furthered the relative 'rise' of China, which is shifting the balance of power in the region, away from US allies Japan, South Korea and Taiwan - previously by far the most powerful entities in economic and military terms in the post-war era.