Asian century
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Asian Century?. East Asia’s pre-1997 high growth. Overview of East Asia’s Growth. Average growth rate higher than those of any other region in the world Superior performance of the eastern half of Asia Japan, South Korea China’s mainland, Hong Kong, Taiwan

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Asian Century?

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Asian century

Asian Century?

East Asia’s pre-1997 high growth


Overview of east asia s growth

Overview of East Asia’s Growth

  • Average growth rate higher than those of any other region in the world

  • Superior performance of the eastern half of Asia

    • Japan, South Korea

    • China’s mainland, Hong Kong, Taiwan

    • Indonesia, Malaysia, the Philippines, Singapore, and Thailand


Overview

Overview

  • Large degree of variance between the individual economies


Geographical division

Geographical division


Growth in east asia

Growth in East Asia

  • Japan’s economy took off in 1960s

  • NIE’s (newly industrialized economies)

    • Hong Kong, Taiwan and Korea

      • “very high” growth in the 1960-1975 period

      • “outstanding” growth in the 1975-1990 period

    • Singapore: opposite pattern

  • Irony of Myanmar and the Philippines


Growth in nie s

Growth in NIE’s

  • NIE’s accumulated capital and increased labor participation at a much faster rate than other economies

  • The increase in these two factors far from fully explains their exceptional growth rates

  • productivity growth also accounts for a significant fraction


Growth in nie s i

Growth in NIE’s: I

  • Growth of labor participation

  • “high” for the NIE’s in general


Growth in nie s ii

Growth in NIE’s: II

  • Growth of capital

  • Hong Kong: “high”

  • Taiwan & Singapore: “very high”

  • Korea: “outstanding”

  • Public investment/GDP similar to other developing economies

  • Private investment/GDP much higher


Growth in nie s iii

Growth in NIE’s: III

  • Productivity growth

  • Higher than that of United States

  • Proportion of growth of GDP per person that is explained by productivity growth was not systematically different from those of Japan and the United States


Paper tigers

Paper tigers?

  • Soviet Union growth pattern

    • mobilization of resources

  • Asia growth pattern

    • two-thirds of the growth is input-driven

    • the remaining third is attributable to increased efficiency or total factor productivity (TFP)


The world bank study

The World Bank study

  • To international technological progress

  • South Korea was keeping pace

  • Hong Kong, Japan, Taiwan and Thailand were catching up

  • The investment-driven economies of Indonesia, Malaysia, and Singapore fell behind


Increase in productivity

Increase in Productivity

  • Imports of foreign knowledge and technology

  • Expanding education opportunities

  • Better organization

  • Improved work practices


Increase in productivity1

Increase in Productivity

  • Interlocking cooperation

  • free enterprise

  • government financial intervention

  • guidance-minded technocratic bureaucracy


Korea s growth path

Korea’s growth path

  • High rates of saving with funds channeled into the industrial sector

  • Strong export orientation

  • Strict limits on “non-essential” imports and direct foreign investment

  • Strict zoning laws and other restrictions on the distribution system


Hong kong

Hong Kong

  • Entry port to China


Singapore

Singapore


State intervention

State Intervention

Ability

Low High

High

India, Philippines Japan, Taiwan

Intent (weak) (strong)

U.S., U.K Hong Kong

Low (minimalist) (market driven)


Asian values

Asian Values?

  • commitment to hard work

  • sense of thriftiness

  • emphasis on education

  • well-defined family structure

  • filial piety

  • respect for political authority

  • society above self


Political stability

Political stability

  • Strongman rulers

    • North Korea, South Korea, Singapore, Malaysia, the Philippines, Indonesia ...

  • Single-party dominance

    • Japan, Taiwan, Malaysia, Singapore …

  • Trading civil rights and freedoms for economic growth

    • presumption of basic material well-being


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