Transcript Why Is East Asia Rich? - Cal State LA

POLS 373
Foundations of
Comparative Politics
Lecture: Why is East Asia Rich?
Part 1, Introduction
Why is East Asia Rich?
Introduction
Geographic Bearings
East Asia is an ambiguous terms, but it typically includes Japan,
China, North and South Korea, and Taiwan • The focus of our
attention are the three economies and societies of Japan, South
Korea and Taiwan
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Why is East Asia Rich?
Introduction
Economic Facts and Figures about East Asia
 In 1950, South Korea and Taiwan were poorer than Kenya,
Romania, Ghana, Turkey, Morocco, and the Philippines
(among others)
 In 1950, Japan was poorer than Greece, Mexico, Columbia,
Peru, Poland, Hungary, and South Africa (among others)
Source: NationMaster.com--Statistics > GDP per capita by
country in 1950
NOTE: Actual GDP ($) figures for the 1950s (and earlier)
vary considerable from source to source; for this reason they
can be very confusing. The relative country rankings,
however, are fairly consistent.
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South Korea in 1950: Typical living conditions
Why is East Asia Rich?
Introduction
Economic Facts and Figures about East
Asia
 By 1970, Taiwan and South Korea had increased
their per capita GDP more than 300% and had
become richer than most other “developing
countries”
 By 1970, Japan had grown into one of the largest
economies in the world, with a per capita income
about 70% of America’s
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Why is East Asia Rich?
Introduction
Economic Facts and Figures about East
Asia
 In 1992, per capita GDP in Taiwan broke the
$10,000 mark for the first time, while South Korea
achieved the same feat three years later in 1995
 By 2005, per capita GDP in Taiwan had grown to
almost $28,000 and in South Korea to more than
$20,000
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Why is East Asia Rich?
Introduction
Economic Facts and Figures about East
Asia
Top
of the World”
In“On
terms
of percentage
(%)
growth, East Asia far
outpaced the world for a
30 year period between
1965 and 1996
NOTE: This graph includes other
East Asian countries, but gives a
good general indication of how
fast East Asia has grown
compared to the rest of the world
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Why is East Asia Rich?
Introduction
 GDP Per Capita:
International Ranking
(Selected Countries),
2005
On a per capita basis,
Taiwan and South Korea
are in the top 20% of
wealthiest countries in the
world
____________________
NOTE: GDP dollar estimates are derived
from PPP calculations. Figures come
from the IMF, World Bank and the
University of Pennsylvania. Complete
listing of countries is available at:
http://en.wikipedia.org/wiki/List_of_countries_by_
GDP_per_capita_%28PPP%29
Country
GDP per capita
3. United States
$41,999
18. United Kingdom
$30,436
24. Taiwan
$27,721
27. New Zealand
$24,797
34. South Korea
$20,590
46. Saudi Arabia
$15,229
55. South Africa
$12,161
65. Mexico
$10,186
75. Turkey
$7,950
98. Peru
$5,983
104. Philippines
$4,923
158. Kenya
$1,445
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Why is East Asia Rich?
Introduction
GDP: International
Comparison, Selected
Countries, 2006 est.
 On an absolute basis, South
Korea was the 13th richest
country in the world in 2006 with
a GDP of $1.1 trillion, while
Taiwan was 18th with a GDP of
$668 billion
 Japan had the 3rd largest
economy in the world with a
GDP of $4.2 trillion (China is
second at $10 trillion)
Source: CIA World Factbook--Rank Order GDP (PPP)
Country
GDP (PPP), in
million $
1. United States
$12,980,000
3. Japan
$4,220,00
8. United Kingdom
$1,930,000
13. South Korea
$1,180,000
14. Canada
$1,165,000
18. Taiwan
$668,000
29. Saudi Arabia
$374,000
50. Peru
$181,800
77. Ghana
$59,150
93. Kenya
$44,770
105. Bolivia
$27,210
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Why is East Asia Rich?
Introduction
Economic Facts and Figures about East
Asia
 GDP growth tells only part of the story: Taiwan and South
Korea have also achieved remarkable success in “catching
up” with (and even surpassing, in some cases) more
developed countries with regard to industrial, technological,
managerial and marketing capacity and innovation
South Korea plans to spend $25 billion on New Songdo, the world's largest "ubiquitous city," with computers linking
home life and life on its streets. Construction, 40 miles from Seoul, is to be done in 2014.
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Why is East Asia Rich?
Introduction
Economic Facts and Figures about East Asia
 South Korea is the only developing country to ever
successfully break into the major western automobile markets
 In 2004, Hyundai automobiles rose to #2 (tied with Honda) on JD Power’s
annual “Reliability Survey,” well ahead of BMW and General Motors
(more on following slide)
 Taiwan is also competitive in many of leading-edge fields, but
not as a “branded” product
 Taiwan Semiconductor Manufacturing Co (TSMC), for example, is the
world's largest contract chipmaker, and has a market share of above 50
percent of the global chip-foundry sector
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Why is East Asia Rich?
Introduction
Economic Facts and Figures about East
Asia
 Hyundai, along with Kia (of which it owns 47%), is the world’s
seventh largest automotive company • In 2004 worldwide sales
topped 2 million vehicles for the first time
 In a reversal of the typical relationship between developing and rich
countries, Hyundai Motor Co. is now a major investor in the United
States, with a $1.1 billion manufacturing factory in Alabama, an
Engineering & Technology center in Michigan, a Design & Research
center in California, and distributions centers/ports in Ontario, CA, New
Jersey, and Portland, OR; Hyundai Motor America’s corporate
headquarters are in Fountain Valley, CA
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Why is East Asia Rich?
Introduction
Economic Facts and Figures about East Asia
Korean companies are
globally competitive in many
important fields, including
 HDTVs (LG and Samsung)
 Semi-conductors
(Samsung)
 Cell phones (Samsung
and LG)
 Blue-Ray DVD (Samsung
and LG)
 Bioengineering (Sewon
Cellontech)
 Shipbuilding (Hyundai),
among others
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Why is East Asia Rich?
Introduction
Economic Facts and Figures about East
Asia
Japan’s economic preeminence is largely
taken for granted today, but remember …
 In the 1950s, Japan was a poor country in both relative and
absolute terms
 “Made in Japan” once meant cheap, shoddy, and low-tech
 Japan was/is “overpopulated” (it has one of the
highest population densities in the world) and
lacked/lacks valuable natural resources (Japan
is almost entirely dependent on imported oil)
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Why is East Asia Rich?
Introduction
Economic Facts and Figures about East
Asia
Today, Japanese companies are market leaders
in a range of industrial and high technology
sectors • Japan’s economy, while
not the economic “monster” it
was once considered, remains the
home of many of the world’s strongest,
most innovative and dynamic
companies
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Why is East Asia Rich?
Introduction
East Asian Development: Key Questions
How did Japan, South Korea and Taiwan
achieve their remarkable economic
development?
Is there “secret” to their success?
Why have the East Asian countries been able to
do what so many other countries have been
unable to do?
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Why is East Asia Rich?
Background Video: Asia Rising-Japan and Korea Rebuild
 As you watch, consider the following
questions:
 Can you identify an implicit argument(s) about the
reasons for East Asia’ economic success?
 Or can you identify the specific (explanatory) factors
that the filmmaker focuses on?
 How might you classify the implied argument from a
theoretical perspective (i.e., cultural, rational choice,
or structural)?
 Also, as you watch, jot down what you consider to
be particularly interesting or important points; think
about any questions you may have
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