Newly Industrializing Economies Research Articles

National technology gaps and trade — an empirical study of the influence of globalisation

This paper examines the hypothesis that economic internationalisation is acting to reduce the importance of national technology ‘gaps’ as determinants of trade patterns and performance. The cross-country analysis uses two approaches to assess the dynamic nature of the relationship between national investment in technological capability (proxied by both R&D activity and human capital) and technology-intensive (TI) trade performance. Natural resource endowment and the changing impact of physical capital formation are also investigated. The study includes approximately 48 nations and is based on data from the mid-1970s to 1990. The empirical evidence from one approach undertaken does not support the globalisation hypothesis as national investment in technology and human capital is shown to have maintained its link to international trade success in TI manufactures over the study period. However, the findings of the alternative approach are ambiguous. A positive association between technology investment catch-up and ongoing TI manufacturing trade performance is evident for the newly industrialised economies (NICs), but the results suggest that an inverse relationship may apply for many of the ‘mature’ Western economies.

Introduction: population migration and urbanization in developing countries.

This introductory article discusses the correlation between migration and rapid urbanization and growth in the largest cities of the developing world. The topics include the characteristics of urbanization, government policies toward population migration, the change in absolute size of the rural population, and the problems of maintaining megacities. Other articles in this special issue are devoted to urbanization patterns in China, South Africa, Iran, Korea and Taiwan as newly industrialized economies (NIEs), informal sectors in the Philippines and Thailand, and low-income settlements in Bogota, Colombia, and India. It is argued that increased urbanization is produced by natural population growth, the expansion of the urban administrative area, and the in-migration from rural areas. A comparison of urbanization rates of countries by per capita gross national product (GNP) reveals that countries with per capita GNP of under US$2000 have urbanization rates of 10-60%. Rates are under 30% in Africa, the Middle East, South Asia, China, and Indonesia. Rapid urbanization appears to follow the economic growth curve. The rate of urbanization in Latin America is high enough to be comparable to urbanization in Europe and the US. Taiwan and Korea have high rates of urbanization that surpass the rate of industrialization. Thailand and Malaysia have low rates of urbanization compared to the size of their per capita GNP. Urbanization rates under 20% occur in countries without economic development. Rates between 20% and 50% occur in countries with or without industrialization. East Asian urbanization is progressing along with industrialization. Africa and the Middle East have urbanization without industrialization. In 1990 there were 20 developing countries and 5 developed countries with populations over 5 million. In 10 of 87 developing countries rural population declined in absolute size. The author identifies and discusses four patterns of urban growth.

1. Asia as the center of gravity of the world energy system

The center of gravity of the world's energy market is shifting to the Asia-Pacific region and will continue to do so until 2010 and beyond. This shift is due to the region's rapid economic growth and increasing population (which is currently about 60% of total world population). The region's oil demand has already surpassed Western Europe's and will soon overtake North America's. Also, the region is involved in more than three-fourths of the world's trade in liquefied natural gas (LNG). Given these trends, a thorough understanding of the energy outlook of the Asia-Pacific region is of utmost importance to industry and governments-nationally, regionally, and internationally. To meet this need, the East-West Center's Program on Resources: Energy and Minerals has undertaken an analysis of the energy sector from 1993 to the year 2010, using high, low, and base case scenarios for the following economic groups within the region: (i) OECD Pacific (Australia, Japan, New Zealand), (ii) newly industrialized economies (NIEs) (Hong Kong, Singapore, South Korea, Taiwan), (iii) Southeast Asia (Indonesia, Malaysia, the Philippines, Thailand, Vietnam), (iv) South Asia (Bangladesh, India, Pakistan), (v) China, and (vi) other Asia-Pacific economies. The aggregate data for the Asia-Pacific region, presented in this article and in article 3, are based on these six categories. The category of other economies comprises the Pacific island nations and all the countries of Asia not listed above, with the exceptions of the former Soviet Union and the Middle East (including Iran). Summary data on the former Soviet Union are provided in a separate section of this article and are discussed in greater detail in article 4.

INDUSTRIAL POLICY AND MARKET STRUCTURE: KOREAN AUTO ASSEMBLY

AbstractMass production technology began to confer comparative advantage in auto assembly on newly industrializing economies (NIES) in the 1980s, but the economies of scale and scope of the firm remain significant. Most NIE entrants face home markets which are still too small to support a single world scale firm. Their entry into auto assembly was premature and it has created pressure to prolong state support for the ‘infant’ sector. This, in turn, has led to policy capture, the Achilles heel of industrial policy, which can result in substantial welfare losses. Korea suggests that the maturation of auto assembly may proceed faster if governments confine themselves to promoting domestic assemblers through strategic alliances with global firms, using anti‐trust mechanisms to prevent abuses of market power.

The “Clash” of Civilizations? Or an Emerging “East Asian Modernity”?

This paper examines Samuel Huntington's influential article, Clash of Civilizations?, particularly his interest in Confucian civilizations. Huntington's civilizational approach, this paper suggests, is marred by ahistorical and essentialist thinking on both the causes of the emergence of and Southeast Asian newly industrializing economies (NIEs) and the reasons for the clashes between and West in recent years. What is at stake instead is to a large measure a question of what an East Asian (often conceived of as a neo-Confucian modernity) might look like, and whether the NIEs have achieved such a modernity that could be an alternative to the Western version of it. The latter modernity could then no longer claim a universal standard. The creation of an Asian rather than Asianized modernity, further, would mark the arrival of post-colonial countries such as Malaysia and Singapore in the world; thus some argue, the finally would have nearly eradicated the memory of what is called the Age of Empire. In this manner, Asian modernity discourse functions as a successor to earlier anti-imperial and nationalist discourses.

Japanese Investment in China: Strategies in the Electronics and Automobile Sectors

Since Deng Xiaoping's southern tour of China in early 1992 in which he reaffirmed China's commitment to pursue free market economic principles, total cumulative foreign investment in China jumped from $25 billion in 1991 to $135 billion by the end of 1995. This figure is now equivalent to some 21% of the country's nominal $650 billion GNP. The inflow of $37 billion in 1995 alone set a record. Japan has been one of the main countries pouring money into the rising Asian economic giant. Its investment in China, which had fallen behind that of other nations in the late 1980s, rose sharply from a cumulative total of $3.5 billion in 1991 to $10.5 billion at the end of 1995, and annual pledged investment leapt from $457 million in 1990 to $7.6 billion in 1995.1 Japan's new investment in China is now nearly as large as its combined new investment in the four newly industrializing economies (NIEs)-South Korea, Taiwan, Hong Kong, and Singapore-and approaches the combined new investment in the ASEAN nations of Thailand, Malaysia, and Indonesia.2 Most past researchers on Japanese investment in Asia have focused on these emerging economies of East and Southeast Asia, while few have looked at China.3 This is to be expected as Japanese companies dominate foreign

Asia Pacific Fusion: Japan's Role in APEC, and: APEC: Challenges and Opportunities (review)

Reviewed by: Asia Pacific Fusion: Japan’s Role in APEC,, and: APEC: Challenges and Opportunities Kiyohiko Fukushima Asia Pacific Fusion: Japan’s Role in APEC, by Yoichi Funabashi. Washington, DC: Institute for International Economics, 1995. xvi, 284 p. APEC: Challenges and Opportunities, edited by Chia Siow Yue. Singapore: Institute for Southeast Asian Studies, 1994. xii, 195 p. The countries of East and Southeast Asia are growing fast and gaining confidence. The leaders of that region now meet in the fall each year to confirm their commitment to peace and prosperity in the region through closer cooperation and freer flow of trade and investment. Though the Asia Pacific Economic Cooperation (APEC) started as an informal meeting of trade ministers in 1989, President Clinton substantially upgraded its role by convening the first summit meeting of the APEC countries in Seattle in 1993. The summit meetings of the Pacific rim countries have since become an annual routine. The members of APEC are now eighteen: the United States, Japan, China, Canada, Mexico, South Korea, Taiwan, the Philippines, Brunei, Indonesia, Thailand, Hong Kong, Singapore, Australia, New Zealand, Papua New Guinea, Malaysia, and Chile. Added together, APEC member countries now constitute 53% of the world economy, 42% of world trade, and 38% of the world population. APEC is by far the most important regional economic organization in the world, having in its members the two largest economies in the world, the US and Japan, the most populous country, China, and the world’s fastest growing countries, the Newly Industrializing Economies (NIEs) and the ASEAN (Association of Southeast Asian Nations) members. Through concerted action, the APEC member countries can set the agenda for and decide the future course of the world economy. What is agreed upon in APEC meetings is of vital importance for the United States and the whole world. In Asia Pacific Fusion: Japan’s Role in the APEC, Yoichi Funabashi, Washington bureau chief of Asahi Shimbun, one of the largest newspapers in Japan, provides a thorough analysis of APEC from its inception, adding insight into its potential role in the future. Funabashi interviewed 12 heads of state and 14 ministers of Asia and the US concerning their opinions of APEC. Examining cultural, economic, and [End Page 205] political trends, he points to the cross-fertilization of ideas and cultures in the Asia-Pacific region, and entertains the readers with breathtakingly up-close illustrations of leaders, diplomats, and intellectuals. Published just one month before the November 1995 APEC meeting in Osaka, this was the first comprehensive book on this important international conference. Funabashi’s forecasts and analysis cover not only the Osaka meeting but also the upcoming meeting in Manila in 1996. Funabashi concludes with recommendations for Japan and the APEC member countries. The strength of this book comes from Funabashi’s perspective of the APEC process as an experiment in the fusion of different cultures across the diverse Asia-Pacific region. In order to build a long-term strategy for economic cooperation, member countries must have an interest in and understanding of each other. The early phase of this confidence-building process and efforts at mutual understanding has already begun. In order to further enhance the sense of community, Funabashi proposes, among other things, that historians of the 18 APEC member countries write a common history of the 18 countries by the year 2020, learning from the example of Europe, where historians from 12 European countries produced a secondary school textbook, The Illustrated History of Europe. This proposal is a good idea; it could end the Japanese cabinet members’ occasional shameful mistatements on history and subsequent resignations once and for all by promoting an Asian consensus on the past. This would allow the region to move ahead in its efforts to cooperate for the future. Regrettably, Asia-Pacific Fusion does not provide much analysis of the economic changes in Asia except for a general introduction of figures on trade and economic growth. The most important economic change in Asia is that the economic influence of the US is declining. Increasingly, Asia is growing though its own demand in the region, created by rising incomes and the vast population. Asian self-reliance is bolstered by...

The New Economic Partnership between China and Singapore

Investments in China by entrepreneurs from Hong Kong and Taiwan have received a great deal of attention from scholars in recent years, while those from Singapore have received far less scrutiny. Though less than those of Hong Kong or Taiwan, Singapore's investments in China have been increasing rapidly in the 1990s, with encouragement from Beijing. China has been expanding its economic activities in Singapore as well. Singapore has three characteristics that make its economic interactions with China especially interesting. First, Singapore is predominantly Chinese. In mid1993 Singapore's population was estimated at 2,873,800 people, 77.5 percent classified as ethnic Chinese. Although Lee Kuan Yew and Singapore's People's Action Party (PAP) government have worked hard to create a Singaporean nationalism and insisted that residents of Singapore were Singaporeans rather than overseas Chinese, the Chinese character of Singapore is undeniable. Second, Singapore is an independent state recognized by the international community. This separates it from both Taiwan and Hong Kong and shapes its business dealings with China. Third, Singapore is located in Southeast Asia. This, combined with Singapore's Chinese character, forces Singapore to exhibit a certain amount of caution in dealing with China. Singapore's economic interactions with China are also of interest because they demonstrate an attempt by the government of a newly industrialized economy (NIE) to adapt to increasing real wages, labor shortages, and greater international competition.' At the same time, China is promoting the economic relationship for reasons related to its own development. This examination of Sino-Singaporean economic relations will be divided into

半周辺国家の社会発展-NIEs形成の社会的差異

In the contemporary sociology, Newly Industrializing Economies (NIEs) are one of the most relevant research subjects. This paper attempts to analyze the social basis in the formation of NIEs. First of all, both endogenous factors, which are class relations, state intervention and ideology, and exogenous factors, which are determined by the world-system, are specified by focusing on the formation process of indigenous capitals in NIEs and how NIEs have been able to develop in the world-system is explained. Secondly, the differences between east Asian and Latin American NIEs are clarified and to what extent NIEs are likely to be a model of other developing countries is discussed.

Yung Chul Park: East Asian Liberalization, Bubbles, and the Challenge from China

FOR THE PAST ten years, the economic growth and industrialization of many East Asian countries has been impressive by any measure of performance. I The newly industrializing economies (NIEs) and China have sustained exceptionally high rates of growth, ranging from 6.1 percent in Hong Kong to 10.2 percent in China. Equally impressive has been the extent to which these countries have been able to pursue economic integration among themselves, while also deepening their trade and financial relations with the rest of the world. Intraregional trade as a share of the region's total trade jumped from 31.4 percent in 1984 to 42.2 percent in 1994. Under the auspices of the Asia Pacific Economic Cooperation (APEC), these countries have committed to a rather ambitious schedule of trade liberalization with the goal of free trade in the region by 2020, without forming an economic bloc. A number of recent studies also suggest that financial flows between East Asian countries have risen markedly in recent years, thereby allowing their financial markets to forge stronger intraregional linkages and gradually to become integrated into the markets of North America and Europe.2 The economic growth and integration of East Asia is largely the result of the sweeping economic, social, and political changes that have taken place over the past decade. Two developments stand out as the main driving forces. The first is the widespread acceptance of liberal economic policies that have accelerated the process of trade and financial liberalization. Notwithstanding their continuing trade disputes with Europe and North America, most of the East Asian countries have managed to lower tariff rates and invisible trade barriers substantially and to deregulate and open up domestic capital markets. The opening of local financial markets has been instrumental in East

A study on just‐in‐time practices in Singapore

The just‐in‐time (JIT) production system represents a new technology that has been widely promoted by the Singapore government and which has been adopted by several organizations operating in this newly industrialized economy (NIE). Presents the first comprehensive study of JIT practices in Singapore. Describes the major survey findings on the profile of JIT companies, their pre‐implementation and implementation experiences, and the JIT practices targeted for future implementation. In this way, the study is similar to other such studies conducted in the USA, the UK, Europe, Australia, Hong Kong, Korea and Taiwan, and hence adds to the empirical database of actual JIT practices as published in the literature. Also seeks to provide empirical insights to three specific research issues pertaining to the strategic significance of JIT, the speedy and effective implementation of JIT, and the need for local suppliers to practise JIT. Such empirical insights derived from the JIT practices of companies operating within a successful NIE like Singapore could be helpful towards encouraging the rapid diffusion of the JIT technology in other developing economies.

The three Mini Dragons: Economic development in Thailand, Malaysia, and Indonesia

The rapid pace of economic growth in Thailand, Malaysia, and Indonesia indicates that all three ASEAN countries are quickly becoming Newly Industrialized Economies (NIEs). Yet a close comparison of the three leads the author to conclude that there are dissimilarities in their economic development resulting from each country's unique social and economic conditions. Masato Hayashida was a senior economist in the Economic Research Division at The Mitsubishi Bank before being seconded to IIPS as a senior research fellow.

The Changing Role of the State in High-Tech Industrial Development: The Experience of Hong Kong

This paper is an examination of the role of the Hong Kong government vis-à-vis governments in Japan and other Asian newly industrialized economies (NIEs) in high-tech industrial development. It is argued that, whereas governments of Japan and other Asian NIEs have played very important roles in facilitating industrial restructuring, the Hong Kong government has so far refrained from direct participation in industrial development. Although the Hong Kong government has assumed an important position in the course of economic development in the territory, especially in terms of land-related economic activities, it has little vested interest and experience in directing industrial developments. It was not until the 1990s that the government switched from a ‘positive nonintervention’ to a ‘minimum intervention with maximum support’ industrial policy and began to play a more active role in facilitating industrial upgrading. The effectiveness of the changing industrial policy and the prospects for high-tech development in the territory are reviewed by examining the challenges and opportunities faced by the Hong Kong government in facilitating high-tech industrial development.

Stock market interdependencies: Evidence from the asian NIEs

National asset markets have become more integrated in recent years. This paper investigates the interrelationship, if any, among the stock markets in four newly industrialized economies (NIEs) in Asia. The results indicate that a significant link exists between the stock markets of Hong Kong and Singapore and those of Japan and the United States. On the other hand, the markets with severe restrictions on cross-country investing, that is, Korea and Taiwan, are not responsive to innovations in foreign markets. Finally, the United States stock market influences, but is not influenced by, the four Asian markets.

Intra-NIE competition in exports of manufactures

This paper provides empirical evidence on the extent to which the Asian Newly Industrialised Economies (NIEs) compete in world export markets. Our results support existing studies which emphasise the importance of allowing for intra-LDC competition in modelling an individual developing country's exports. Whilst the Asian NIEs are regarded as a model for other developing countries to emulate, one has to consider whether such an expansion in export supply would be at the expense of OECD economies or whether it will lead to a deterioration in the terms of trade of the developing countries as a group.

ASEAN Economic Development: An Analytical Survey—The State of the Field

The six countries of the association of southeast asian nations, ASEAN (comprising Brunei, Indonesia, Malaysia, the Philippines, Singapore, and Thailand), together constitute only about 1.5 percent of the world economy. In the East Asian context, they tend to be overshadowed by the larger, more industrialized Northeast Asian NIEs (newly industrializing economies), and the recent extraordinary growth of China. But ASEAN is far more important than its economic share might suggest. First, most of the economies are growing much faster than the rest of the world. This means their share of the world economy is rising. It also means that, unless the good performance is due wholly to luck or good fortune, there must be something about these economies, their organization, and their public policies, that other, poorer performing countries could well emulate. Second, ASEAN is more important according to other yardsticks. Its share of the world's population, 6 percent, is four times its share of the economy. Moreover, most of these economies are outwardlooking in orientation, with the result that the region's trade share is about three times its share of the world economy.

Explaining the Growth Performances of Asian Developing Economies

I. Development Performance of Developing Countries No matter how it is measured, the growth performance of the newly industrializing economies (NIEs) stands out. That of the Southeast Asian group, with the exception of the Philippines, and that of China is also impressive. The South Asian countries have done much less well, with countries in sub-Saharan Africa, the Caribbean, and Latin America even further behind. The NIEs have also done well in two other crucial indicators of development: income distribution and the quality of life. In a study of 34 developing countries, J. Riedel found that Taiwan has the best income distribution, surpassing even that of Sri Lanka, while Singapore, South Korea, and Hong Kong are placed in the top third of the sample.' The NIEs also did extremely well in two measures of the quality of life: the percentage of the age group enrolled in secondary education and the life expectancy at birth, where they are well ahead of the other groups. Thus the NIEs have not only grown much faster than other economies, but have also done better in bringing about a more equitable distribution of income and a better quality of life. Other measures of economic performance (e.g., employment and wages growth), equity performance (e.g., reduction in the absolute level of poverty), and quality-of-life performance (e.g., the number of doctors per capita) could have been used, but they would have shown the same thing. This finding is generally accepted. However, there is no generally accepted explanation for the different development performances. This article will examine the claims of the major explanations and then propose a new way of looking at them. In order to make the task manageable, it will be limited to the developing countries of Asia.

The ‘Developmental State’ and the Newly Industrialised Economies of Asia

The renewed interest in the role of the state in economic growth and development has been focused on the four newly industrialised economies (NIEs) of Asia—Hong Kong, Korea, Singapore, and Taiwan. Much of the recent literature tends to crowd these states into an undifferentiated model of the ‘developmental state’. A closer examination reveals significant differences among them in terms of the state's relations to capital, labour, and the external economy that not only defy reduction to a single model but also show that options for moving away from labour-intensive segments of production for world markets vary considerably. Furthermore, as democratisation movements gain voice, and as the transnationalisation of capital from within these economies proceeds, the high degree of autonomy associated with the developmental state is eroding, and its authoritarian uses of power are increasingly being challenged.

National branding strategies and economic development: Implications for NIEs and LDCs

AbstractAs the four newly industrialized economies (NIEs), Hong Kong, South Korea, Taiwan, and Singapore, continue to improve their economic development, there is an increasing realization of the need to create world class brands for global competition. This is because these four NIEs, largely dependent on manufactured products for highly export‐oriented strategies, are facing threats from lower cost semi‐NIEs and LDCs (less developing countries) that are adopting similar strategies. This article examines the important roles played by brands in securing market share. In particular, it highlights the experiences of Japan in the development of international brands. Lessons are then drawn for the NIEs and LDCs, especially with regard to the need to consciously develop world class brands as part of the overall economic growth and development. © 1995 John Wiley & Sons, Inc.

A Tale of Two Industries: The Restructuring of Hong Kong's Garment-Making and Electronics Industries

In different ways, newly industrialised economies (NIEs) in East Asia are restructuring their industries in response to changes in their comparative advantages and to the changing environment of the global economy. In this paper, an attempt is made to examine the case of Hong Kong through intensive case studies of its garment-making and electronics industries. It is argued that the way the manufacturing industries respond to rising production costs, increasing protectionism, and growing competition from other NIEs is essentially shaped by the ‘politics of production’, at the structural, institutional, as well as organisational levels. With a noninterventionist state, the dominance of small local capital, the arms-length relationship between industrial and financial capital, and the underdevelopment of shop-floor unionism, Hong Kong's manufacturing responds to the changing business environment by developing flexible, labour-intensive production strategies. The success of such strategies hinges upon the ability of the industries to find niches in the world market of consumption which is increasingly characterised by rapid changes in styles.