In Search of the All-Important Pacific Rim : Trade: It is a term that’s part hype and part hope, both linked to Asia’s growing importance in the world economy.
Few places on Earth have been described in such rich statistical detail. But then, the Pacific Rim is an idea in search of a definition, and it needs something tangible to glue it together.
That’s why anyone with a stomach for numbers can discover the growth rate of its aggregate GNP, the output in megawatts of its new power plants or the purchasing power of its emerging middle class.
Memorize some of this minutia and you’re a Pacific Rim expert.
In the popular American consciousness, Asia no longer seems a remote and incomprehensible place on the far side of the world.
Now Asia is in your face. It’s right off the shores of California, Oregon and Washington, an enticing fountain of riches. Asia was reinvented about a decade ago as a new creature of economic geography called the Pacific Rim.
Increased awareness, however, doesn’t necessarily mean enhanced understanding. The Pacific Rim is as much image as it is phenomenon, a trendy concept that competes with new world order and information superhighway for the most dubious buzzword of our time. Yet somewhere behind this facile idea is a hard nub of truth.
Europhiles who once comforted themselves with traditional cross-Atlantic ties need only glance at recent trade statistics to see the spreadsheet writing on the wall. In 1993, U.S. exports to Asia exceeded those to Europe for the second year in a row. Two-way trade with Asia was $361 billion, compared to $239 billion for Europe.
There’s a local angle too. With its large concentrations of Asian immigrants and Asian Americans, Southern California is a hub for regional networking and agile, small-scale entrepreneurship. The rest of the population benefits as well. As the state struggles to restructure its sagging economy, rising merchandise trade with Asia is one of the few causes for optimism on the horizon.
Indeed, more than a third--about $100 billion--of all U.S. transpacific commerce funnels through harbors and airports in the Los Angeles Customs District, making Los Angeles the capital of Pac Rim East.
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Yet these beguiling figures shouldn’t be cited without also mentioning another naked statistic: While trade with Europe is in a reasonably cozy balance, trade with Asia is alarmingly out of line, with a whopping U.S. deficit of $98 billion. More than half that imbalance is with one country, Japan, but the problem of closed markets and protectionism is regionwide.
Such worrisome details, however, tend to get lost in the zealous syntax of Pacific Rim Speak, as propagated by Pacific Rim consultants, Pacific Rim scholars and Pacific Rim pundits.
It was some time around the dawn of the audacious 1980s that the term Pacific Rim evolved from obscure geological jargon to one of the most impressionistic concepts ever known to the dismal science of international economics.
Its meaning, which once was understood to describe volcanoes and earthquake faults ringing the Pacific Ocean, is now stretched to suggest just about anything from relocating America’s manufacturing base in cheap labor markets overseas to speculating on real estate in Vietnam to dining, eclectically, on Pan-Asian California cuisine.
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A simplistic Pacific Rim vision of opportunity in Asia persists, colored, as always, by the fantasy of easy wealth. China’s jackpot-at-the-end-of-the-rainbow market of 1.2 billion consumers comes to mind long before one considers the latent chaos of its fragile, sclerotic and corrupt authoritarian regime.
“The combined Asia Pacific economies are projected to grow (to) about twice the size of a post-1992 ‘unified Europe,’ reaching an estimated $13 trillion by the beginning of the next millennium,” predicted the Pacific Rim Almanac’s editor, Alexander Besher.
Could be. But this prophesy was written in 1990, before Tokyo’s speculative financial mania turned to muted panic, tumbling the Japanese economy into its worst recession since World War II.
This doesn’t mean other Asian economies aren’t still booming, which they are. But they’re not necessarily thriving on exports to Japan. The American economy, warts and all, remains the market of choice, the key engine of growth, the principal dynamo behind these Asian dynamos.
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Still, the image of a self-sustaining Pacific Rim juggernaut prevails, giving the name the power of a magical incantation--and the snappy appeal of a Madison Avenue jingle.
The business world’s fascination is well illustrated by a Pacific Rim statistic not often cited in the seminars and chicken dinner speeches: The California secretary of state’s office lists 297 registered corporations and limited partnerships enamored enough with the concept to use the words Pacific Rim in their name.
But in the way of all fads, this one seems to have spent some of its fury. As many as 157 of these enterprises, records show, have been dissolved, suspended, canceled or otherwise rendered inactive since going to the trouble and expense of filing legal papers with the state.
Even some of the technically active Pacific Rim companies are difficult to find, assuming they are still in business at all.
An outfit evocatively named Naturally Beautiful Nails of the Pacific Rim, for example, had no telephone numbers on record for offices in Santa Monica or Pacific Palisades, where it was incorporated on Nov. 26, 1990.
Same goes for Pacific Rim University in Apple Valley, the Pacific Rim Chamber of Commerce in Encino, Pacific Rim Concepts of Lancaster and Tsunami Pacific Rim Cafe in Santa Barbara.
Collectors of exotic Asian weapons shouldn’t bother to look up Norwalk-based Pacific Rim Ordnance in the 1994 Pacific Bell Smart Yellow Pages. The number has been disconnected, and there is no new number.
Yet quite a few Pacific Rim namesakes are still conspicuous in their activities.
Take, for instance, Pacific Rim Printers-Mailers in Los Angeles.
The office manager said she wasn’t sure why the printing and direct-mail shop calls itself Pacific Rim. “The owners just thought it was a good idea when they renamed the company five years ago,” she said. “We really have nothing to do with the Orient.”
If the term Pacific Rim has a hyped quality, the media can take some of the blame. The Los Angeles Times, which sometimes refers to itself as a Pacific Rim newspaper, has mentioned the words in 2,547 news articles published since 1985. The term Atlantic Rim has appeared in only four articles--all in the context of ironic references to the Pacific Rim.
But it’s no joke to many California entrepreneurs, who profess to know exactly what they mean by calling themselves “Pacific Rim.”
“I consider it to be a buzzword for the 1990s,” said Harvey Rosen, president of Los Angeles-based Pacific Rim Aluminum, a company that trades in containers full of aluminum ingots and scrap.
Rosen, a commodities broker for 20 years before starting his company in 1988, chose the name because Asian markets were hot at the time. “I viewed it as the strongest area of growth in the world,” he said, “and I wanted my company name to speak about that vision.”
These days, however, fickle trends in global commodities markets make the United States the most lucrative trading scene, as the domestic economy lurches out of recession. “Our Asian business is not as good as we would like,” Rosen concedes.
It would be unfair to omit Latin America in a serious treatment of the Pacific Rim, though this is perhaps one area where the concept suffers from serious fatigue. Nonetheless, it’s certainly on the Rim, geographically speaking. At last count there are 11 Latin American countries with the Pacific Ocean lapping at their coastlines; their combined population totals more than 200 million.
Mexico and Chile are the avant-garde, trying to tap into whatever opportunities are out there on the Cuenca del Pacifico. Both joined the Asia Pacific Economic Cooperation (APEC).
Mexico, for its part, experienced a gusher of Japanese investment in its maquiladora (border factory) programs in the 1980s, as leery manufacturers sought footholds inside the fortress walls of the emerging North American free-trade area. New Japanese investment has dried up in recent years, however, as it has in California and elsewhere on this side of the Rim.
“Pacific Rim” has yet another meaning for Dana Yamagata, creative director for Pacific Rim Advertising in Los Angeles. The agency specializes in crafting “politically correct language” for ads targeting the fragmented ethnic Asian markets in North America.
“We use the term to unify the Asian countries,” Yamagata said. “There are more than 80 different ethnic groups in Asia, so I guess the Pacific Rim is a politically correct term to describe a common economic experience and put a new light on that.”
Advantage: Asia
Although exports to Asia are outpacing exports to Europe, U.S. mechandise trade with Europe remains in balance while the deficit with Asia is rising precipitously. U.S. trade with the Pacific and Atlantic rims, in billions of dollars:
Pacific Rim:
1990 1991 1992 1993 Exports $111.8 $117.8 $124.5 $131.6 Imports 183.9 188.4 208.4 229.6 Trade Gap, U.S. vs. Pac Rim -72.1 -70.6 -83.9 -98.0
Europe:
1990 1991 1992 1993 Exports $117.3 $123.5 $121.2 $119.8 Imports 111.2 104.1 112.3 119.1 Trade Gap, U.S. vs. Europe +6.1 +19.4 +8.9 +0.7
Pacific Rim Nations: Australia, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, New Zealand, Papua New Guini, Philippines, Singapore, Taiwan.
Europe: Western and Eastern Europe, excluding former Soviet republics.
The Los Angeles Port
About one-third of U.S. trade with Asia funneled through the harbors and airports of the Los Angeles Customs District, making Southern California the capital of the eastern Pacific Rim. Two-way trade with East and Southeast Asia in 1992, in billions of dollars:
Los Angeles Customs District:
Exports: $34.3
Imports: $61.7
San Francisco Customs District:
Exports: $20.7
Imports: $28.1
Seattle Customs District:
Exports: $18.6
Imports: $12.7
Source: U.S. Bureau of the Census, Foreign Trade Division
