Introduction to economic history (Unit 2)

 

Oriental Economic History (China and the Asian Tigers)

In this unit, the reader should be familiar with:

  • The uniqueness of the Asian economies, particularly of China, South Korea, Singapore, Hong Kong, Taiwan, Malaysia
  • The strategies employed by the countries towards an advancement in their economies

An assessment of the state of the economies of China and the Asian Tigers (Singapore, South Korea Malaysia, Taiwan, Hong Kong) reveals that these economies were categorized as third world economies, owing to the poor state in which they wallowed. According to Bruno Shirley, As recently as the early 1960s South Korea, Taiwan, Singapore and Hong Kong, the “Asian Tigers” were considered to be a part of the third world: some writers even unkindly refer to it as “economic backwardness.” Since the 1997 Asian Financial Crisis, praise of the “Asian Miracle” has dwindled in academia, yet the Tigers still stand as rare examples of states which have successfully “developed” in a manner no one could have predicted 50 years ago – and at a considerably faster rate than any of our current efforts at third-world development seem to be proceeding. Are there are indeed lessons to be learnt from the rapid economic growth of the Tigers, from the 1960s through to the 1990s, and these have a practical application in contemporary development?

A close look at the Chinese economy for instance shows how China rose from a poor developing country to a major economic power in about four decades. Morrison conducted a study which shows how that from 1979 (when economic reforms began) to 2017, China’s real gross domestic product (GDP) grew at an average annual rate of nearly 10%. According to the World Bank, China has “experienced the fastest sustained expansion by a major economy in history—and has lifted more than 800 million people out of poverty.” China has emerged as a major global economic power. For example, it ranks first in terms of economic size on a purchasing power parity (PPP) basis, value-added manufacturing, merchandise trade, and holder of foreign exchange reserves.

A look at the Tigers reveals that they had a strong central government guiding the economy rapidly forward through distinct stages of development until it reached full industrialization. An assessment of these economies indicates that they adopted the state-led development model. This model describes a strong central state utilizing a range of policy tools to aggressively pursue development even against the wishes of market actors. . However supporters of the market-led and interventionist models would argue that while state-led development may have been effective in East Asia, it is not applicable to other parts of the world.

 

 
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