1 introduction to east asia survey of east asian economies

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1 Introduction to East Asia Survey of East Asian Economies

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Page 1: 1 Introduction to East Asia Survey of East Asian Economies

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Introduction to East Asia

Survey of East Asian Economies

Page 2: 1 Introduction to East Asia Survey of East Asian Economies

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Please introduce yourself:

NameReason for choosing this coursePrior knowledge/experience with East AsiaYour particular interest in East Asia

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Where is East Asia?

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What Countries Do We Include?

China (including Hong Kong*)JapanRepublic of Korea (South Korea)*MalaysiaPhilippinesSingapore*Taiwan (Chinese Taipei)*Thailand Vietnam

What are the other countries in the region and why don’t we include them?

*Used to be called the Tigers

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Why Bother About East Asia?

Consists of close to 2 billion people (what is this ratio to the world’s population?There is a need to understand the wide diversity of cultures - culture influence needs, political and security concerns as well as business practicesRapid development for several decades - “Asian Miracle” and “Pacific Century”Increasing economic and political importance - includes some of the world’s largest marketsMiracle disturbed by the Asian crisis in 1997What about the future? Obvious need to understand developments in the regionImplications for US economic and political policy

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Relative Size: Surface Area

China

Indonesia

MalaysiaPhilippines

Singapore

Thailand

Korea

Taiwan

Hong Kong

Vietnam

Japan

Page 7: 1 Introduction to East Asia Survey of East Asian Economies

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Economic Growth

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Poverty ReductionPoverty - Headcount Index

($2 a day poverty line; Percent)

20

35

50

65

80

East Asia China

Vietnam S.E.Asia 4

Other Small *

* Cambodia, Lao PDR, Papua New Guinea

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http://www.unescap.org/esid/psis/population/database/data_sheet/2008/Datasheet_2008.pdf

Population and Development Indicators for Asia and the Pacific,

2008

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SIZE (2000)

15%

65%

Japan65%

7%

Korea & Taiwan4%

Korea & Taiwan

10%

10%

ASEAN24%

[Total $7,013 billion]

[Total 1,935 million]

at Actual Exchange Rate

Sources: World Bank, World Development Indicators 2002; For Taiwan, ADB, Key Indicators 2001 .

East AsianPopulation

East Asian GNP

(32% of World Total)

(22% of World Total)

China

China

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There is Diversity and Change in the Region

Some of the richest and most advanced economies, but also some very poor countries

Speedy and the needyThe largest country (China), but also the smallest (Singapore)Rapid changes during past decadesSome natural resource-rich, some natural resource-poorIn some population predominantly urban, in manufacturing/services, some, still predominantly rural, in agricultureStill large differences in social structure (income distribution, health and education indicators)

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Historical Background: Links, Similarities

and DifferencesHistorical links in Asia go back many centuries

Chinese and Indian cultural influences and linksTrade links

Direct western colonial rule: South Asia, Southeast Asia (except Thailand)

British, Dutch, French, Portuguese, Spanish-American

Western domination : China, ThailandJapanese colonialism

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Differences in the Political Environment

Political systems can vary from democratic to totalitarian

Democratic system - multiple centers of power, none of which is powerful enough to completely control decision making

Totalitarian system - political power is highly concentrated in a small elite group

GIVE EXAMPLES

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Differences in Political IdeologyPolitical philosophy covers issues as government intervention, role of market forces and attitudes towards profit and risk

Ranges from capitalism to socialism

Capitalism - private ownership of business enterprises is encouraged

Socialism - public ownership of businesses is common, with substantial government regulations of the workings of a free market

GIVE EXAMPLES

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1945 50 55 60 65 70 75 80 85 90 95 2000

60 61 79 87 88 92 97

Korea

49 75 78 88 Kim Young-sam

TaiwanChenShui-bian

46 48 53 57 61 65 86 92 98

Philippines

Magsaysay Macapagal 99

Indonesia

55 59 65 90 Habibie

Singapore

57 70 76 81

Malaysia

46 48 57 58 63 73 75 77 80 88 91 97

Thailand

51 76 Kriangsak Chatichai

Vietnam

48 62 88

Myanmar

Source: Akira Suehiro, Catch-up Type Industrialization , Nagoya University Press, 2000, p115.

Kim Dae-jung

Nationalist Party Chiang Kai-shek Chiang Ching-kuo Lee Teng-hui

Rhee Syngman Park Chung-hee Chun Doo-hwanNoh Tae-

woo

Ramos Estrada

Skarno Suharto Wahid

Quirino Garcia Marcos Aquino

LaborParty

People'sAction Party

Lee Kuan-yew Goh Chok-tong

Vietnamese Communist Party

Authoritarian Developmentalism in East Asia

Phibun Sarit Thanom

UMNO / Rahman Razak Hussein Mahathir

U Nu Burma Socialist Programme Party / Ne Win SLORC

IndochinaCommunist Party Labor Party

Prem Chuan

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1949 Independence 1979 Policy of Reform and Opening Up begins

1958-60 Great Leap Forward 1976 Death of Mao Tse-tung

1966-76 Cultural Revolution 1989 Tiananmen Square Incident

China-Taiwan Problem

1947 Riots against Government [Taiwan] 1979 Assassination of President Park [Korea]

1961 Coup d'etat [Korea] 1973-74 1979-80

1950-53 Korean War

Korean Peninsula Problem

1946-54 Indochina War [Vietnam] 1986 Doi Moi (Renovation) Policy begins [Vietnam]

1954 Division of Vietnam into South & North1979-89 Vietnam invades Cambodia

1965-75 Vietnam War [Vietnam]

1976 Reunification of Vietnam

1958 Coup d'etat by Sarit [Thailand] 1971 Military coup d'etat [Thailand]

1960-61 Coup d'etat [Laos]1975-78 Khmer Rouge - Pol Pot Regime [Cambodia]

1962 Coup d'etat by Revolutionary Council [Myanmar] 1988 Military coup d'etat by SLORC [Myanmar]

1957 Independence as Malaya [Malaysia] 1985-86

1963 Federation of Malaysia [Malaysia/Singapore]

1965 Coup d'etat - End of Sukarno years [Indonesia]

1965 Independence from Malaysia [Singapore]

1969 Riots [Malaysia, Singapore]

1965-86 Marcos Dictatorship [Philippines]

China

198519551950

Oil P

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North-East Asia

Oil S

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En

d o

f W

orld

Wa

r II

Oil S

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South-East Asia:

Maritime Countries

South-East Asia:

Indochina

199019751960 19951965 1970 1980

Political Developments to the New Millennium

Can You Update the Developments?

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Independence and Post-Independence

Nationalist movements: relatively peaceful vs revolutionary/violentCommunist movements in independence strugglesRegional conflictsPolitical ideology and circumstances, and economic policy

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Updating the LeadersChina (including Hong Kong*) ___________________Cambodia _______________________Indonesia _____________________________Japan ____________________________Republic of Korea (South Korea)* _______________Laos ________________________Myanmar _______________North Korea ______________Malaysia ____________________________Philippines ____________________________Singapore* ____________________________Taiwan (Chinese Taipei)* ____________________Thailand ____________________________Vietnam ____________________________

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Convergence in Economic Policies

Since late 1970s, process of economic policy liberalization – market oriented policiesLate 1980s-early 1990s, pace of liberalization accelerated1997 crisis and aftermath2001 on – rapid development in China, Vietnam2008-9 How has the region weather the financial crisis?

Keep in mind that history, culture, structure, politics matter

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What About Asian Economic Integration?

Geographical proximitySome (limited) sense of common cultural heritageEconomic links have been growing:

regional integration arrangements ‘natural’ economic complementarities

“Asian” economic crisis and ‘contagion’, “yen” zone…….or maybe “Yuan” zone

What are some of the regional groups?ASEAN http://www.aseansec.org

APEC http://www.apec.org

Others? http://www.us-asean.org/afta.asp

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Economic Links in Trade, Capital and Labor Markets

Trade Links - http://www.asean.or.jp/enFDI and portfolio capital flowshttp://www.aseansec.org/18144.htm

Changing attitudes to FDIMultinationals: first world and third world MNCsDevelopment of equity markets and relaxation of controls on cross-border capital movements

Labour movements in Asia: labour migration from low wage countries to high wage countries

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Some Important Issues for East Asia

Maintaining regional peace and securityNarrowing the gap between early developers and latecomersPromoting globalization while mitigating its negative impactsWTO, Economics LiberalizationSARS, AIDS, Bird Flu, Swine Flu, Pollution, Political economyHuman resource development institution building, governance for strengthening competitiveness

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Data ResourcesAsian Development Bank: http://www.adb.orgCountries at a Glance World Bank: http://web.worldbank.org/WBSITE/EXTERNAL/DATASTATISTICS/0,,contentMDK:20485916~menuPK:1192694~pagePK:64133150~piPK:64133175~theSitePK:239419,00.htmlPerspectives on East Asian Development: An Introduction: http://books.google.com/books?hl=en&lr=&id=xqUslD9HBDIC&oi=fnd&pg=PA1&dq=related:Xc-XQDgtP0IJ:scholar.google.com/&ots=GoPUVh14Rn&sig=WWQDWpkjdusV2MA4OtRHN9Gznio#v=onepage&q=&f=falseEconomist http://www.economist.com/countriesBBC http://news.bbc.co.uk/1/hi/country_profiles/default.stmASEAN: http://www.asean.orgMillennium Development Goals: http://www.mdgasiapacific.org

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"It doesn't matter whether the cat is black or white, as long as it catches mice." Deng Xiaoping (Former Chinese Prime Minister) "We are not afraid of capitalist enterprises, but of not being able to supervise and control them." Do Muoi (Former Vietnamese Communist Party General Secretary)

What do the above statements mean?