Transcript The East Asian economic core area

The East Asian economic
core area
dr. Jeney László
Senior lecturer
[email protected]
Economic Geography
I. International Business bachelor study programme (BA)
Spring term 2015/2016.
CUB Centre of Economic Geography and Futures Studies
The area of the
East Asia and Far
East
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Far East < East Asia
– Northeast Asia (Siberia, Russian Far
East)
– East Asia (Japan, Korea, China,
Mongolia)
– Southeast Asia (Mainland SEA, Insular
SEA)
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Its borders
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Debatable towards North and Inner Asia
(Siberia, Mongolia, NW China, Tibet)
Large World region: East Asia
– Territory: 12 mn km2 (8% of the World)
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– Population: 1,6 bn (23% of the World)
 WR1.
East Asian miracle
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Parts of East Asia
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Largest part China (≈ Europe, 9.6 km2, WR3.)  East + Inner
Asia (Tibet, Uygur region)
Tajvan, Hongkong (NIC1)
Korea South (NIC1) and North: middle size Asian country, 222
th km2, 75 mn residents (N–S: 1127 km, W–E 645 km)
Japan
Mongolia
Late 20th century: reemergence of East Asia
Political, economic and cultural impacts
Refocuses the global economic growth and political
power on the Pacific Region
Interactas to the globalization trends
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The Japanese way to the
economic miracle
Japan: more than 2000 years old
historical past
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Till the early 18th cent. XVII.: empires (tenno)
– Cultural and trading relations to other East Asian areas (mainly
China, but Korea as well)
– Capital: Kyoto
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Power of army (leader shogun)  totally isolation
(dynasty of Tokugawa shogun)
– Centralized, on feudal basis
– Capital: Edo (today: Tokyo)
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Late 18th century: unsuccessful economic contacts by
Europeans
– Mid-19th century: successful contacts by the USA
– Followed by the English, Dutch, French, Russian traders
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1868–1912: restoration of the power of empire
(Mutsuhito tenno)
– Meiji period
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Reforms of education
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Till that time the majority of society was
analphabetic
Introduction of compulsory elementary
education (earlier than more developed
countries)
– 1880s: 6–13 years old boys 54%, girls 19% attended
school
– 1900: 95% alphabet
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More skilled manpower  adoption of Western
technologies
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Meiji reforms: civil change, rapid
catch-up
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Instead of feudal system  former peasantry  cheap
manpower for the modernizing economy
First manufactures
– Initially capital concentration in the richest feudal families 
monopole organisations
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Important role of state
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Stabilization of the capitalist order
Central Bank: development of heavy industry, transport
Cancellation of the feudal social hierarchy
New administrative system (46 prefectures)
Permission of free movement of citizens
Cancellation of inner tolls  single market of the country
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The East Asian economic Miracle
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The only one world region in the focuses of the
world economy starting not on the basis of the
Western civilization
– Maintenance of its own culture and traditions
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Japan: the way to the economic power
– Under a historically uneven short period
– An outstanding rapidly growing economy for decades
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Korea, Taiwan and Southeast Asia: follow the
Japanese sample
China: political-military, cultural, and
increasingly economic power
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The Japanese economy changed
massively after WWII
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Post-war period: present government, economy
and constitution were put in place
1960–1990: contribution to total world GDP
grew from 3.5 to 14 %
1960–2002:
– Primary sector declined from 33 to 1 percent
– Service sector rose from 38 to 68 percent
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From 1990s: Japanese economy slowed
– China’s GDP 1.5 times higher
– But per capita GDP remained much higher in Japan
($35.000) than in China ($6.000)
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After reconstruction
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Reconstruction
– WWII: Japanese industry destroyed
– After war: US poured money to rebuild the industries and
infrastructure
– Cold War, Communist takeover in China, Korean war  US
became opened to Japanese products
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Advantageous environment for Japan
Cheap raw material on world markets
– Transportation innovation: building large oil tankers and carriers
(oil from SW-Asia, iron ore from Australia)
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Own low-cost, young labour force
1960s: 10 % economic growth
Firms indorsed profits back into new developments
Better wages  Japanese consumers could buy a range
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of home-made products
1970s: increasing costs and „just
in time”
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1970s: increased oil prices
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Japan depended on imported oil for 70 % energy needs
reduced costs of hydroelectricity and nuclear power
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Factory closures  social problems, unemployment (e.g. Osaka)
Investments to light industries (producing cameras, household
appliances)
Firstly copied others’ technologies and designs, later initiator
Older industries (steelmaking, shipbuilding, petrochemicals, cement
making) suffered from overcapacity on world markets
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By 2000 half of the world’s industrial robots (4x installed than in
the US)
„Just-in-time” deliveries cut warehousing costs
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Toyota: employed more human skills instead of indiscriminate use of
robotics (  too expensive)
1980s huge export income  caused the yen to double in value
compared to other currencies
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Japanese export became more costly for other countries
Imports became cheaper
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From 1980s: global investments
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Large yen trading surpluses  Japanese
corporations invested more
Firstly: bought out foreign mineral suppliers
Later: established Japanese factories abroad
Answer to quotas on import of home-made cars
– First major investments in US and GB, from late
1980s then in Southeast Asia  economic growth of
NIC countries
– Mid-1990s investments in cheap-labour assembly-line
factories by moving design and research facilities to
SEA
– Early 2000s: increasing investments in China (mainly
to Dalian) – huge trade deficit to China
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Renewed economic challenges
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Early 2000s: J faced a need to change
Investments resulted huge debts  banking system
under pressure
Western countries imitated Japanese production
processes (Toyotism)
Japan looked more closely at Western ways in relation
to financial control
Trade surplus  rapid growth of financial and business
services
1986: Tokyo became the second financial centre 
further population increases
Increase in service occupation  widened range of
employment
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Diversified economy  not so dependent on
fluctuations of world markets
The developing East Asian
giant: China
1949–1976:
Attempted
Geographic Shifts
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Initial attempts of the Communist Government (Mao
Zedong): Great Leap Forward + Cultural Revolution
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Expand output rapidly
Distribute economic activities
Equality within China
Enhance national defence
1949: NE + Shanghai + Tianjin: 70% of output
– Move the production of military goods inland
– Factory locations close to the raw material sources (coal,
hydroelectricity, oil)
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Poor transportation linkages Central and W China
developed slowly
– Manufacturing production remained in NE
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1978: economic output of China < S Korea or Taiwan
Changing directions
after 1976
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Deng Xiaoping: 1977 overall economic reforms
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After 2000: further revolution based on telecommunication systems
(use of internet and mobile phones)
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„4 modernizations”: agriculture, industry, science, defence
new approach to rural life
Encouraged investment from foreign corporations
Increasing manufactured exports
Economy multiplied six fold within 20 years
1990–2000: telephone lines 10  125 mn
1995–2010: mobile phone users 5  800 mn (WR1)
Sensitivity of state control of website content
China does not follow the Asian sample
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Asian NIC countries: 1. raw materials and food export, 2. simple
manufactured than 3. more sophisticated goods, 4. service industries
China: all typed of goods from rice to microchips
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Farming and rural living in the
2000s
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Agriculture: prominent in the rural economy
Through Mao Zedong years: farming
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Low levels of mechanization  high labour inputs
1980: agriculture still employed the entire – growing –
rural workforce
Early 1980s: relaxed commune controls  individuals
and groups plan their own programs
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Low govermental priority
Separated from other aspects of the economy
Personal involvement  higher output
2000: half of the rural workers in farming
Rural industrial expansion
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Township and village enterprises (TVEs)
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Driving forces
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New rural sources of income
Took underused rural labour
Higher wages
130mn employees (30% of rural workforce)
Initially: collectively owned enterprises (by late 1980s: from 22
to 36 % of Chinese industrial output)
Later: individual and private enterprises
Millions of people remained in industrializing rural areas
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BUT: many millions more moved out of the rural areas to the
cities
Manufacturing
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22% of labour force, half of GDP
Standing on two legs: ancient-moderns, small-large
Huge development during the last four decades
Regional locations:
– Before the revolution
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Textile and food industry, ports
Steelmaking (Japanese): Northeast
– First three decades of socialist industrialization
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Inner parts of the country, regional equalization
– From 1979: opening policy
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High-tech industries, ports again, increases regional differences
4 important industries
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Traditional
– Textile and clothing industry (16%): sea coast (Shanghai), inner
parts
– Food industry (10%): areas producing raw materials, sea ports
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Rapid developing
– Machinery (30%): capital, ports, special economic zones
– Chemistry (10%): coal mining areas, oil refineries (Daqing)
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Other industries
– Iron and steel industry: Anshan, Shanghai
– Ceramics (porcelain of Jingdezhen)
– Paper industry
Opening to the world
economy and its
difficulties
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Till 1979: one of the closest economy of the world
– Lagged from Taiwan (21 mn) and Hong Kong (6 mn)
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Later intensified foreign economic relations
– Official opening policy
– Coming back of Hong Kong
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Main partners: Japan, USA
Hong Kong: linking unit between China and the world
market
Difficulties of the opening
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Large country: ability for self-sufficiency
Traditionally limited relations
Self-sufficiency at regional and local level as well
Linking to foreign trade only in coastal areas
Underdeveloped transportation and telecommunication systems
Transportation
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Without developed infrastructure
the program of „4
modernization” is very difficult
Inner waterways: traditional
important
Rapid development
1990s: motorways
– Canton – Hong Kong, Shenyang –
Dalian, surroundings of Beijing
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Railways: cannot follow the
needs of economy
– 3 railway lines to Russia (1 via
Mongolia), N Korea, Vietnam,
Kazakhstan-Europe (1992)
– Railway building to Inner Asia
(Tibet)
Regional differences
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Two separated parts
– E, SE: core of the ancient Chinese civilization
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Better climate
High population concentration, political centre
1/3 of the territory, 85% of population, 90 % of production
– W and Inner Asia
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Deserts, high mountains
Political dependency
Increasing han population
Underdevelopment
Regional policy: 3 regions  affect towards the increase
of differences
– East: developed sectors, high technology
– Middle: raw materials, modernization of factories, development
of infrastructure
– West: minority education, recovery of natural resources
HDI: Human Development
Index
„Concentrated decentralization”
Increase of territorial inequalities
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1980: special economic zones
(Shenzhen, Zhuhai, Shantou,
Xiamen)
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1988: Hainan
1984: 14 ports opened
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1990 along Yangtze (Chang Yiang)
River, 1992 border cities
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1992: 13 customs free zones
1997 Hong Kong, 1999 Macau:
special administrated areas
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„One country with two systems”
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Basis of unification with Taiwan