The Asian Tigers

How did they achieve their growth?

From the 1960s onwards Taiwan, South Korea, Hong Kong and Singapore followed similar patterns of development. The development process was supposed to have been started by import substitution. Taxes were placed on imports to discourage their purpose and hence allowing their own primary industry to flourish. However, instead they industrialised and developed aiming exports at highly industrialised nations of Europe and North America. All of the countries also had non-democratic political systems, meaning they could drive through plans easily. They also all pursued education as a way of ensuring a labour force, as all students were required to attend primary and secondary school. They further invested in universities and making foreign universities accessible to their own students. Trade unions were also discouraged, and rather reaffirmed job security. The government also offered security of tenure to land owners, encouraging people to invest in their land.

  • All of the tigers had a Chinese influence:
    • South Korea: 65% Chinese
    • Singapore: 75% Chinese
    • Hong Kong: 95% Chinese
    • Taiwan: 98% Chinese

Why was their growth referred to as an ‘economic miracle’?

An economic miracle is the term given to a period of great change, such as the period of dramatic economic growth the four Asian tigers went through from the 1960s to the 1980s due to them pursuing export-driven economic development by exporting to highly-industrialized nations.

How is their growth model being criticised?

The growth model has been subject to criticism for not following the typical model of development through import substitution with an aim of becoming self sufficient. They instead focus on exports, relying on the healthy economic state of their target nations rather than feeding their own consumer market. But the problem came in that they lost their competitive edge over neighbouring markets, such as India, China and much of South-East Asia.

Identify some of the problems economic growth has caused.

In the 1990s, the economies of the Asian Tigers had expanded too fast, hence the prices of property and stocks and shares had become overvalued. This caused several stock markets to crash and sparked a worldwide financial crisis and even required money from the International Monetary Fund.

Furthermore, as they lost their competitive edge over the likes of India, China and South-East Asia the consequences were potentially devastating as their economy was purely fuelled on this edge. Environmental factors are also an issue, industrialization is often linked with heightening levels of pollution and an ageing population, due to a fall in birth rates for such reasons as women pursuing careers, and a fall in death rates due to a better quality of living and medical advances, hence creating a high dependency level.

China – Case Study of an NIC

How has China achieved economic success?

Taiwan, Hong Kong, South Korea and Singapore all saw their economies take off during the 1960s and ’70s not because of their authoritarian regimes but because they pumped up exports and integrated into the world economy. Before China adopted these types of policies, its economic path was erratic.

During the Second World War China, already weak and divided, was invaded by Japan, leaving it in an even worse state after the war.  In 1949, it became Communist and developed a “centralised economic system” giving full governmental control. Agriculture was collectivised (several farms running as a joint enterprise) and they invested in heavy industry. It ended in a famine that killed tens of millions in the the late 1950s, followed by political upheaval known as the “Cultral Revolution” in the 1960s. In 1978 a period of economic reform took place, mainly affecting farming at first, encouraging private farmers to compete with those owned by the state. But by the 1990s as the liberalisation of industry took place, TNCs were encouraged to develop.

Some major industries are still owned by the state, such as iron, steel, coal, machinery and textiles.

Identify the main industries behind the economic growth.

Petrochemical Industry

Governmental planners made a focus on producing fertilisers, plastics and synthetic fibres from the counries resources. This was to encourage farm productivity and textile industries. This has placed China amongst the worlds leading producers of nitrogenous fertilisers.

The motor industry

From producing 139,800 units in 1975, it now exports 9,00,000 per year, having become the 3rd largest producer of motors.

Consumer goods

There was a strong emphasis on textiles and clothing, forming an important part of Chinas exports. Textile manufacturing accounts for about 10% of the gross industrial output of the country. It is scattered throughout the country, but important textile centres include Shanghai, Guangzhou and Harbin.

The steel industry

During the 1960s the Chinese government developed steel making facilities on a small scale, as a way to make use of the countries resources. The industry was largely unsuccessful as it did not produce a competitive and successful industry.  Following the period of economic reform however,  steel production was increased from 1422 million tonnes in 2000 to 426 million tonnes in 2006. Despite modernisation, a lot of its production still comes from small scale centres.

The energy industry

Since 1980 the countries energy consumption dramatically increased.

The sources of energy:

  • 80% fossil fuels
  • 17% HEP
  • 2% Nuclear

China has a good potential for creating energy, but most ideas are undeveloped and those that are are often polluting, inefficient or have negative effects on fossil fuel consumption. Energy sources however are often not geographically close to those who would consume it. For instance the Guangzhou region has too little energy, whereas there is little industry located near the resources in the north east.