Summary Since Geopolitical Futures launched on Dec. 2, East Asia has been one of the most active regions in the world. The basic building blocks of our Net Assessment of the region, which we published in December, still hold, but the model advanced significantly at the beginning of 2016, as China experienced two crashes in its stock market. Stock markets in China are not very important in themselves, but these crashes severely undermined foreign confidence in China’s ability to implement economic policy and led to speculation on the yuan and accelerated reorganization at the top of China’s political structure. China now lives in a “new normal,” and what was an economic problem has become a serious political problem as well.
East Asia can be divided into four distinct parts. The first is the Pacific archipelago, which most notably includes Japan but also the Philippines and Taiwan. The second part extends from the Chinese coast 400 miles inward, reaching western China, a vast and sp