The service concessions in the China-Hong Kong CEPA have turned out to be unprecedentedly wide and progressive, as it has been negotiated annually which deepened the level of openness after its initial conclusion in 2003. An in-depth analysis of the China-Hong Kong CEPA (Closer Economic Partnership Arrangement) is necessary for Korea to set up proper strategies for Korea-China FTA (KCFTA) service negotiations. We can identify China’s strategies and the upper limit of opening in the services sectors through an examination of service concessions in the China-Hong Kong CEPA. This study attempts to analyze China’s service concessions in every trade liberalization agreement China has signed, from GATS to China-Hong Kong CEPA service concessions, in order to draw out implications for the KCFTA service negotiations.
China asserts that the high level of service market opening in the CEPA stems from the special relationship between China and Hong Kong, and is not applicable to FTA negotiations with other countries. However, service concessions in the Early Harvest Programs (EHP) of the China-Taiwan Economic Cooperation Framework Agreement (ECFA) contains some concessions of levels of service opening similar to the CEPA. Taiwan, unlike Hong Kong, is recognized as a sovereign state in international society and treated as a formal member of WTO. Therefore, China’s level of service opening with other countries can go further in certain service sectors, compared to levels seen in its negotiations with Taiwan.
The CEPA also has some implications for KCFTA negotiations in terms of the framework of the agreement. First, China and Hong Kong have enriched the content of CEPA with continued liberalization through annual negotiations since 2004. Korea and China will also be able to broaden the range of service liberalization through regular negotiations in the KCFTA framework, just as in the CEPA. Second, the CEPA contains liberalization measures, the so-called Guangdong pilot basis measures, which are tested in an adjacent province, and will be expanded to other regions after they prove to be successful in the Guangdong area.
This study also attempts to suggest the appropriate modality of the service negotiation by presenting four types of concessions in terms of the expected level of service opening in the KCFTA; 1) going slightly further with WTO concessions by inserting some service sectors or by increasing the existing level of opening in already open sectors; 2) as shown in the China-Hong Kong CEPA, a new concession list could be made under the new service sector classification which is a modified form of the WTO service classification; 3) include new chapters for important service sectors such as finance, telecommunication, audio-visual coproduction, e-commerce, government procurement etc. just like in the Korea-US FTA, Korea-Singapore FTA and Korea-India CEPA(Comprehensive Economic Partnership Agreement); 4) complete negative list. Considering China’s cautious approach to opening its service market through FTAs, the best option would be to mix types 2) and 3).
Finally, this study suggests service sectors that may be included in the KCFTA service negotiation by analyzing the DDA, DDA plus, and CEPA concessions. The number of service sectors listed in China's FTA service concessions are maintained at 62-67 items. It seems that China wants to maintain the number of listed sectors at this level with respect to the FTAs. Therefore, the key to successful negotiation results is to keep the number of listed sectors at a level similar to China's other FTAs, and to select the core sectors that can magnify the result of market openings at the same time.
There are service sectors in DDA, DDA plus and CEPA concessions that China may be more willing to open. These sectors are as follows: the professional services such as Legal, Architecture, Engineering, Integrated engineering, Urban planning, Medical and dental, Computer and Related Services, R&D, Real Estate, Market research, Management consulting, personnel placement and supply, scientific/technical consulting, Building-cleaning, Printing etc. In addition, the following sectors are also listed in DDA, DDA plus, and CEPA concessions: Construction and related engineering services, Distribution services, Environmental services, Banking and Other Financial Services, Health and social services, Tourism and travel service; Recreational, Cultural and sporting services; Maritime transport services, Air transport services, and Road transport services.
The new sectors only included in CEPA concessions are promising sectors when considering the expanding culture and silver industry market in China, the rising level of consumption and aging society. These sectors include audio-visual co-production, and health and social services related to the Welfare services delivered through residential institutions to old persons and the handicapped.

Russian Overseas Direct Investment(ODI) has been increasing rapidly in recent years. It has been on an upward trend since the early 2000s and rose more steeply from the mid 2000s. The total amount of Russian ODI in stock was 362.1 billion dollars at year-end 2011, or 15th in the world. The volume grew more than 18 times that of 2000.
However, Russia’s direct investment toward South Korea is rather trivial. Until the end of 2011 Russia invested 54.57 million dollars (in stock), which is a mere 3% of the amount of Korea’s direct investment toward Russia. This implies that Korea is not yet an attractive investment destination among Russians. In fact, Russian direct investment to Korea is important because it brings not only economic benefits but also regional security, along with stability and peace in the Korean peninsula and in Northeast Asia with strong support from Russia. Therefore, investment cooperation between Korea and Russia needs to be strengthened in the future. Of course, both Korean direct investment toward Russia and Russian direct investment toward Korea should proceed in parallel.
The purpose of this study is to review the current status and motivations of Russian overseas direct investment at different levels; namely country, region and industry base. After an in-depth analysis of Russian overseas direct investment, the study will provide specific measures for attracting and expanding Russian direct investment to South Korea.
The study focuses on patterns and recent condition of the increasing Russian ODI since 2000, and Korea’s investment promotion policy toward Russia and its achievements. The study is conducted with many methods including document research, statistical analysis, survey on Russian businesses and experts interviews.  
The study consists of five chapters. In the second chapter following  introduction, theoretical and statistical analyses on Russian ODI will be presented, with Russian direct investment since 2000 being the main focus. The study also attempts to demonstrate the main features of Russian overseas direct investment by highlighting Russia’s motives for overseas direct investment. After reviewing changes and trends of Russian ODI, the authors selected regions and industries of greatest interest to Russian investors and added useful information for Korea’s investment promotion policy.
In chapter three, motivations and strategies of Russian ODI is analyzed. The authors carried out a survey of Russian businesses about their sectors and regions of interest for investment and possibilities for investment in Korea. With the result of the survey, we suggest promising investment sectors for Russian investors and desirable directions for Korea’s investment policy toward Russia.
In chapter four, Korea’s current foreign direct investment and its major features are reviewed. Then, the focus is narrowed to Russia’s recent direct investment trends in Korea, and the reasons for the lack of progress in Russia’s direct investment in Korea is discussed. Based on these, Korea’s investment promotion policy is evaluated.  
In the last chapter, attractive sectors for Russian investors and measures for increasing Russia’s investment to Korea is suggested.
According to our study, Russia’s defense industry holds promising investment potential. It contains comparatively high technological competitiveness among Russian businesses, and with its abundant capital resources, foreign direct investment is likely to result in success. Agreements at the government level should precede any technical and investment cooperation with Russia’s defense industry, as it requires approvals from technology-related government agencies in Russia.
Second, investment promotion should proceed through market oriented joint-ventures. Korea’s investment promotion agencies such as Invest Korea should sort out particular sectors with prominent market share effects in Russia, in order to develop a business model that will accelerate mutual investment between the Korean and Russian industries. Such a business model could be implemented in prospective investment counseling programs for businesses of both countries, and the launch of such programs needs to be actively considered.
Third, investment promotion targeted at Russia’s energy sector is promising. Korea needs to participate in Russia’s resource development projects to establish cooperative ties between the energy sectors. This may open the way for further joint investment cooperation between the businesses of both countries in a third-party energy resource development. Moreover, energy efficiency technology of Russia’s leading energy enterprises can provide opportunities to launch joint investment projects in Korea. 
Fourth, investment promotion targeted at the research development and education sector. In case of the medical sector, Korea may convert Russia’s science technology for commercialization, in the form of medical devices. Such a strategy fits in the broader objective of establishing a Korea-Russia joint enterprise for global markets in the territories of Korea. In case of information and communication sector, leading enterprises of both countries could consider reaching an agreement for strategic technology partnerships and joint investment cooperation. In case of the education sector, investment promotion through increased cooperation in the higher education and science technology should be actively considered.
As such, in order to expand Russia’s foreign direct investment in each of these respective sectors, the Republic of Korea should place more effort in the following areas.
First, mutual cooperation with Russia’s government agencies needs to be expanded. Building cooperation channels to promote Russia’s foreign direct investment to Korea necessitates omnidirectional contact with the Ministry of Economic Development, the Agency for Export Credit and Investment Insurance and the Chamber of Commerce and Industry of the Russian Federation. Regarding such processes it would be better for the Korean government and related agencies to replace the current individual channels of contact with the so-called ‘control towers’ that would allow more comprehensive and systematic control for continuous and consistent policy for investment promotion to Russia.
Second, the present investment promotion system should be modified through increased interests on all of Russia’s regions. It would be necessary to strongly reinforce investment promotion affairs conducted at KOTRA. Concurrently it would be important to develop ‘Korea-Russia investment cooperation MOU’ signed in 2011 between Invest Korea and Moscow Investment Agency, to provide expanded investment opportunities and information exchange.
Third, Korea’s economic success should be more vigorously advertised to Russian businesses. It would be rational to promote Korea’s image as a developed country through diverse exhibitions, while modifying incorrect stereotypes via published works containing comparative country analysis. In particular, it would be vital to effectively employ the internet and mass media outlets, while providing the abundant information in the Russian language through the embassy, consulates, business related institutions, and conferences.
Fourth, Russian businesses require more active provision of information on investment to Korea. Korea should expand channels of interaction among business people of both countries, and reinforce cooperation with the Chamber of Commerce and Industries of the Russian Federation and Moscow Entrepreneurs’ Association. In addition, it is necessary to further activate the annual Korea-Russian Business Forum hosted by the Korea Chamber of Commerce and Industries, and the annual Korea-Russia Business Dialogue hosted by the Korea International Trade Association, and setting as the main agenda Korea’s investment promotion issues.
Fifth, cases of successful Russian investment to Korea need to be created. A single case of Russia’s large scale project successfully executed in Korea would motivate the Russian Federation to spread the information concerning Korea’s investment environment.
Sixth, joint investment with third parties should be more aggressively sought. For instance, merging Korea’s technical skills and Russia’s capital for a joint entry to Russia’s neighboring CIS region and other former allies of the Soviet era would be an opportunity to fully implement Russia’s resources while reducing potential risks.  
Lastly, Korea and Russia need to establish a joint investment fund to promote further investment. It could be a utilization of the already established ‘global new growth engine fund’ between Korea and Russia, or creation of a similar joint investment fund. 

Recently, China is facing limitations in economic growth driven by the expansion of factor-inputs which allowed China to achieve economy of scale, using its abundant labor and capital. Therefore, China now is seeking to change its paradigm of economic growth into an innovation oriented one where knowledge increases economic productivity. As a result, investment in research and development (R&D) and patents have sharply risen. This would be a good time to assess the policies and strategies for R&D in China to draw up some meaningful implications. This study contains Chinese government policies for R&D, current state of Chinese firms’ R&D, characteristics of Chinese patents according to the new method of patent classification and Chinese firms’ reverse-innovation and globalization strategies.
This study is made up of six chapters. The introduction is followed by Chapter 2, an overall review of Chinese science/technology and innovation policy. Chinese policies on science and technology formed the basis of ‘Deng Xiaoping Thought’ after the era of reform and openness began. In 1985 the “Decision on the reform of science- technology system” presented a basic direction for reforming the science-technology system and policy. This led to more specific reforms of the science-technology system, and various policies have been implemented at each stage of market reform in accordance with long-term strategy. Chinese government has since formulated a medium and long-term science and technology policies for innovative nation building to achieve sustainable and harmonious economic growth. The government bodies and agencies are leading the way in implementing such policy including diverse R&D promotion programs.
It is undeniable that these efforts produced remarkable improvements in China’s scientific/technical capacity in general, yet more time and greater enhancement are needed for self-sustained innovation. In the end, the extent of China’s science/technology development hinges on effective policy management and the government’s determination to improve its institutions. A desirable direction for China’s medium-long term science-technology policy would be to build up its market competition system, to expand investment to support R&D of private firms; and to establish networks and enhance the quality of education for development of human capital.
Chapter 3 deals with the current state and characteristics of Chinese R&D activities. In the past, the role of firms as agents of innovation was underestimated in China. However, the domestic entities, especially innovative firms and high-tech enterprises have lately emerged as the main applicants of Chinese patents. This chapter features an empirical analysis of the relationship between Chinese R&D and productivity. The analysis finds that the increase of trained personnel in high-tech industry R&D is contributing significantly to increase in the number of patents and productivity.
In Chapter 4, the changes in the environment for Chinese patents are described by examining the three revisions of patent laws, and a micro-analysis on the patent distribution and patentees in order to assess the capacity and growth potential for Chinese innovation. China enacted its first patent law in 1985, and modified the patent-related systems by revising the patent laws three times by 2008. The first and second revisions were, to some extent, forced by external factors such as the international pressure of intellectual property rights protection, and the necessity for WTO entry. In contrast, the third revision was initiated by the internal need to enhance the level of patent right protection. There are certain limitations in effective intellectual property rights protection in China because of remaining legislative and legal problems, but the application and registration of patents in China in real term is very active given such institutional circumstances.
The convergence of technical knowledge portfolios between Chinese domestic firms and the multinational enterprises in China were identified in the analysis of patent statistics according to a re-classification of Chinese patents. Also, improvements in technical knowledge by Chinese domestic firms and localization and adaptation by foreign companies to China are simultaneously in progress; the former being dominant over the latter. In addition, the proportion of Chinese domestic firms or the university/research institutions that has risen to within the top 10 of each 35 industrial technology areas has increased. The result implies that the Chinese domestic firms have, for the most part, succeeded in catching up in terms of technological capacity.
Chief findings of the micro-analysis on the main entities of invention patentees in China are as follows; first, Chinese domestic entities of invention patent applications increased conspicuously in IT sectors including in electronics, computers, facility hardware sectors including machinery, civil engineering and measures/standards. Second, the top three petroleum firms, that is, the main state-owned enterprises (SOEs) directly controlled by the Chinese central government possess considerable patent technology. Third, some foreign-investor firms including Taiwanese firms are operating affiliated companies that have applied and registered invention patents in China. These companies are able to utilize the abundant engineering manpower in China and strengthen the protection of intellectual property rights of their affiliates regarding production processes, and products produced and sold in China. Fourth, in China, the universities and research institutions are the main agencies that possess patents, especially in high-tech areas where industrialization has yet to kick into high gear, in addition to science-based industries where the application of primary research to industrialization is easily implemented; and general purpose technology areas such as measurement, controlling and analysis methodology etc.
In Chapter 5, the internationalization strategy of five types of emerging multinational enterprises (MNEs) as described by Ramamurti was referred to in analyzing the innovation factors and reverse-innovation among Chinese firms, by classifying the Chinese R&D firms into 5 types. Also, case studies for each type were performed to assess the main contents and characteristics of technological innovation strategies of these firms.
The first type is state-owned Natural-resource vertical Integrators that include most SOEs which secure technological capacity by strategic integration to develop foreign resources. Large-scale support from the government allows these enterprises to catch up with the leading firms rapidly. The second type is local optimizers that engage in market-oriented innovations to develop the products to be optimized according to customers’ needs in the local markets. It is very possible that these firms became familiar with reverse innovation by exporting products optimized for the local market to developed countries. The third type is the low-cost partners that MNEs of developed countries utilize to reduce production costs. Reverse innovation can take place when MNEs receive the spillover effects of technological innovation from Chinese firms. The fourth type is global consolidators that attempt to carry out the strategic consolidation to enhance the technological capacity up to the international level. The strategy, of course, is to innovate through the process of technological catch-up by consolidation. This has potential to spread out the results of innovation from interactions among consolidated enterprises in the domestic venue into the developed world. The fifth type is a global first-mover, which is the most typical reverse innovator. In this instance, independent of external effects, local Chinese firms achieve independent R&D outcomes and the results spread into the global level.
The implications of R&D by Chinese firms and measures in response are suggested as follows:
First, the main response measures for dealing with the Chinese R&D policies would be to promote the technological cooperation with focus on the 7 strategic emerging industries, formulate strategies to cope with the growth of Chinese firms in the high-tech industries, and support joint R&D by the small and medium enterprises with Chinese companies. The technological cooperation with China should be reinforced in energy-saving, environmental protection, bio technology and new energy areas that overlap with Korea’s new growth engine industries. Also, it is imperative that specific and novel innovation strategies be established to minimize the impact of technological catch-up of China in high-tech industries, along with settlement solutions in case of patent disputes. The policies are needed for supporting SMEs that lack the capacity to establish R&D centers in China so that they may conduct joint R&D or take advantage of R&D centers established by conglomerates or government bodies.
Second, another measure that Korea can enact to counter globalization of Chinese firms would be to set up strategies to develop the technologies through Korean companies’ affiliates in China. Just as many foreign firms including Taiwanese firms are applying and registering patents in China, Korean firms also need to create effective portfolios of local patents in China. Furthermore, we need to deal with various challenges from Chinese global firms in accordance with their types of firms: firms that achieve growth by taking country specific advantages (CSAs), catch-up through innovative progress and self-innovation.
Third, policy measures related to R&D cooperation should include strengthening R&D cooperation with universities and research institutions in China, establishment of R&D cooperation models between the governments and providing directions for cooperation in technical standards. Cooperation should be concentrated in universities and research institutions that dominate in terms of the proportion of invention patents in high-tech areas where industrialization is still in its infancy, or in general purpose technologies. As for R&D cooperation between the governments, it might take the form of mutual funding frameworks as in the case between China and Germany, and should be focused on core industries later on. Lastly, the cooperation in technological standard between Korea and China should continue in areas that the new technologies have been introduced and the industrialization has just begun.

The center of the global economy has been gradually shifting to emerging economies with developed countries hit hard by the global financial crisis that started in the United States in 2008 and the recent Eurozone crisis. Since 2012, the GDP growth rates of even those emerging economies have been declining; yet, at the same time, the role of emerging economies like India as the pillar of global economic growth is becoming more important, and so is economic cooperation with emerging economies. According to Global Insight, the average GDP growth rates of the U.S, EU, and OECD countries for 2011~2015 are projected to be 2.4%, 0.9%, and 1.9% respectively, while that of India for the same period is estimated to be 6.7%.
The present report seeks to examine economic cooperation between India and the three selected Asian countries, and offer policy recommendations for Korea’s economic cooperation with India. Japan, Singapore, and China are selected for purposes of the present research, given their high level of economic cooperation with India. The study undertakes comparative analysis of the current status of economic cooperation including policies and strategies focusing on trade, investment, and the FTA. In recent years, Japan, Singapore, and China have been stepping up economic cooperation with India, capitalizing on their comparative advantages and strengths. In particular, FDI flows from Japan and Singapore to India have been increasing at a rapid pace since the late 2000s; Japan and Singapore are ranked India’s 4th and 2nd largest foreign investors in terms of accumulated FDI for the period of April 2000~August 2012, while Korea is ranked 13th. Apart from FDI, Japan, the only country from which India receives ODA(Official Development Assistance) among the three countries, has also been actively utilizing ODA to participate in large-scale infrastructure projects in India. It has also helped build industrial parks exclusively for Japanese companies operating in India. In the case of Singapore, the country signed the FTA with India early on, benefiting from long-standing historical ties and a large Indian community within the country. In addition, Singapore has been utilizing state-linked companies to enter the Indian market, mainly focusing on sectors wherein it enjoys comparative advantages. In the case of China, while its investment in India has lagged, the country has emerged as the largest trading partner for India. In addition, it has been playing a significant part in infrastructure development in India.
Based on the analysis of the three countries’ economic cooperation with India, the following policy implications/recommendations are offered for Korea’s economic cooperation with India. First, it is recommended that bilateral cooperation mechanisms between Korea and India be enhanced. As in the cases of the three countries’ relations with India, regular high-level meetings need be established. Enhancing the Korea-India strategic partnership established in 2010 would be a good starting point to upgrade bilateral intergovernmental mechanisms to a summit level. Cooperation should not be limited to the central government level, as cooperation with India’s state governments should also be further promoted. In addition to intergovernmental cooperation, ties between private sectors of the two countries should also be expanded.
Second, it is necessary to increase the impact of Korea-India CEPA (Comprehensive Economic Partnership Agreement). Tariff concessions in both goods and services need to be increased, as they are currently lower than those of India-Japan CEPA, and India-Singapore Comprehensive Economic Cooperation Agreement(CECA). To that end, the Korea-India CEPA joint committee would have to play a more active role. In addition, ways should be sought to expedite the utilization of certain provisions of CEPA such as the movement of IT professionals, and co-production of audio-visual materials. In addition, with regard to a provision concerning the opening of bank branches, the allotted time frame would have to be extended.
Third, assistance from the government should be scaled up for Korean investors bound for India to help increase their access to the Indian market. Korean investment in India has been lagging far behind that of Japan or Singapore. Korean companies need to be more aggressive in penetrating the Indian market, for which effective policies are needed. In particular, in order to facilitate the participation of Korean firms in large-scale infrastructure projects that have been increasing recently in India, Korea needs to formulate its own strategies, but without tools such as Japan’s ODA or Singapore’s state-linked companies at its disposal.
Lastly, building industrial parks for Korean companies in India could help enhance Korea-India economic cooperation. As Korea does not have experience in building industrial parks in India, joint efforts with Japan or Singapore should be given consideration. However, should Korea decide to go in alone, forming joint ventures with India’s state governments or development corporations under state governments would prove to be wise.

Financial Regulation and Supervision at the EU level has been implemented with the formation of the European Single Market. In the 1980s, there was a significant increase in the number of cross-border financial transactions as free capital movement within the EU territories, mutual recognition of regulation and the supervisory responsibility of the host country were established as the principles of the EU internal financial supervision. However, blind spots in financial supervision have been consistently pointed out as large banks, which operates beyond one member country and set of problems, resulted from mismatch between the financial integration and territorial boundaries that appeared. Therefore, there have been increasing need for harmonizing different financial regulations among member states.
Institutional limitations have been made clear on the EU financial regulation and supervision in the response to the European sovereign crisis. As a result, the demands are increasing for reforms on financial supervision. In particular, new supervisory arrangements should concentrate not only on the prudential of individual firms but also on the macro-prudential, and furthermore, there are increasing need for a more integrated financial supervisory institute as the more efficient measure to supervise the integrated European financial market. ESRB (European Systemic Risk Board) is the product of these considerations, an institution responsible for the macro-prudential oversight of the financial system within the EU. Simultaneously, the European Supervisory Authorities (ESAs) were established, which oversees such areas including banking, securities, and insurance and pension. In other words, even though financial supervision is still in the competence of member states’ authorities, ESRB has rights to issue strong recommendations or alerts. In addition, ESRB can participate in the decision-making process in details of regulations at large.
The perception that loose financial regulations had caused the global financial crisis has been widespread. Many countries moved towards reinforcing their financial regulations. The EU is also developing methods for financial regulation at the EU-level, in order to regulate the credit-rating institutions and to introduce an EU-wide financial transaction tax. Recognizing the mixed interests among business categories and dissonance within the EU member states clearly shows that such financial reform is yet unfinished. However, the fact that the EU and the member states have developed their agreed-upon financial regulations into a global agenda through G20 meetings should be emphasized. 
At the EU and national levels, regulatory authorities are implementing or planning reforms of institutional arrangements for financial supervision. In spite of integrated supervision and regulation at the EU level, EU Member States still retain enforceable supervisory power. Recent developments in supervisory structures in the EU Member States are as follows: (i) a tendency towards further enhancement of the role of national central banks in supervisory activities; (ii) a consolidation of  information-related synergies between central banking and prudential supervisory function in the case of the single supervisory authority.
The euro-area crisis triggered the move towards a banking union. The ‘doom loop’ linking sovereign and banking credit condition has been correctly identified as a key transmission channel that needs to be addressed to prevent further deterioration so that eventual improvements can be envisaged. The creation of a single supervisory mechanism, deposit insurance system and clearing system is an important move that will complete the creation of a European banking union. The first step is the creation of the Single Supervisory Mechanism with a central role conferred on the ECB.
EU’s financial reformation has the following implications for Korea. First, macroprudential supervisory activities and policies should be reinforced. Second, the supervisory authorities should strengthen their cooperation system. Moreover, Korea should search for a systematic framework to protect financial consumers. In terms of financial regulations, financial stability should be considered, while maintaining flexibility in speed and the level of adoption of the global trend in financial regulations. Considering that EU’s financial regulations tend to develop into a global agenda, Korean authorities should make their stance and insist on Korea’s position through international financial consultative bodies such as the G20 or the IMF.

The global financial crisis of 2008 prompted the United States to reassess its whole economy as well as financial markets. Numerous studies suggest that the reason for the crisis should be found not simply at financial malfunction, but more fundamentally at structural elements. This study aims at making an assessment on whether the post-crisis economic policies have been re-aligned to remedy its structural flaws and fundamentally reform the economy.
Until the global financial crisis after the 1980s, the economic policies were oriented toward deregulation, notably at the financial industry. Internally, the growth of the service industry such as financial services was regarded to be positive and natural from the comparative advantage perspective. As well, the United States was not alerted to the loss of competitiveness in stale manufacturing industries, and instead paid attention only to the rise of knowledge-or innovation-based industries. Externally, although it adopted measures such as the FTA to open partner's markets more, it tended to put an emphasis on strategic aspects more than its economic interests.
It is certain that after the financial crisis there was a shift in the economic policy stance of the United States. In summary, the pre-crisis deregulation and strategic-interest-first policy turned into re-regulation and economic-interest-first. Specifically, it started to move the focus on the revival of the manufacturing away from the financial or service industry, and to consider practical benefits such as export and job creation more than geo-political or strategic aspects in the trade policy. Also, instead of financial deregulation or innovation which was a cause of the financial crisis, it chose tighter regulation and supervision on risky financial transactions.
However, those policy re-alignments should not be overstated. The change in the policies is hard to assess as formation of a new paradigm or a fundamental shift. In that sense, the policy changes after this financial crisis are different in nature from those after the Great Depression which were certainly a fundamental shift. One of the reasons for this difference is that the recent crisis was not so destructive as the Great Depression of the 1930s. Another reason might be found at the difference in political circumstances. In the wake of the Great Depression, the ideological gap among political parties rapidly narrowed so that it created a political environment for a comprehensive economic transformation. But now the politics of the United States is characterized as polarization which means widening divergence in political ideology. This polarization leads to a fierce political confrontation hindering requisite reforms.