South Korea is facing a tectonic change of international environment. The original advanced countries are undergoing a stagnation never seen after 1945, while the growth of China and other developing countries is offsetting it globally. South Korea benefited much from the rise of the Chinese economy, the most remarkable benefit being the trade surplus; however, it is disappearing with China’s catch-up in technological capability. The rise of China poses a challenge to the US hegemony, undermining the rule-based order and making East Asia the arena of a hegemony contest, which is most threatening to countries like South Korea. The country needs the ability to manage relationships with the great powers to cope with it, but whether it has the ability is unclear. Compared with the nineteenth century, when Korea failed to adapt to a tectonic change, the overall ability has improved remarkably, but the ability to form domestic cohesion remains the least improved.

Kindleberger’s 1985 presidential address to the American Economic Association launched the final stage in his career, even as the 1985 Plaza Accord launched the next stage in the development of the dollar system. Kindleberger’s high hopes after Plaza were ultimately disappointed but, learning from the period after Nixon’s 1971 abdication of US leadership, he shifted his hopes instead to the prospect of “muddling through.”

When considering the question of China’s external economic relations during the Mao era, the dominant narrative in the literature underscores the following view: Mao’s China pursued a foreign economic policy that was autarkic, isolated from the global economy, and locked into a Soviet-inspired planned economy that provided limited incentives for economic interdependence with the outside world. For some, China’s isolation from the global economy was the result of its position in the Soviet bloc, which was “heavily biased against foreign trade,” and from its adoption of a centrally planned, socialist economic model that prohibited private interests from pursuing foreign investment or trade. For others, Mao-era policies of autarky were inspired by a form of xenophobia that stemmed from the country’s experience of Western predations during the nineteenth century, resulting in fear of economic dependence on foreign powers. Finally, others emphasize the role of Mao’s revolutionary ideology in explaining China’s isolation from the global economy; Mao’s tendency to view major international economic institutions and norms as counterrevolutionary and “hostile” to the Chinese state led him to disengage from international trade and other economic opportunities.