The Implications of East Asia’s New Industrialization: Different Experience from Western Models

The Implications of East Asia’s New Industrialization:

Different Experience from Western Models?

Yuan Zhi-jia(Ph.D, Professor)

E-mail: yzjwl@aol.com

Office: 4-2-16,Osaki, Shinagawa-ku,Tokyo,141-0032,

No.2 Building, Room #508

Tel:03-5487-3234(Dial-in)

Faculty of Economics, Rissho University,

1  INTRODUCTION

By comparing two industrial models—western model and East Asian one, this paper tries to reach two purposes. The first purpose aims at clarifying what role globalization played in the process of new industries development—the industrial fields of microelectronics, information technology (IT)—in East Asia since 1980’s. The second one is to figure out what experiences and implications there are behind new  industrialization process in East Asia, which are considered to be helpful to the other developing regions.

As we know, East Asia began to draw worldwide attention since the beginning of 1980’s as a “developing center of world economy”. The reason for that is quite simple. While most of the industrialized countries and many developing countries suffered from a long-lasted depression then, East Asia showed a strong and perfect economic performance. The economic growth rate was high, per capita GDP increased dramatically and the exports from the region poured into world industrial products market. No other regions could compare with them. As a result, more and more people began searching for the key answers for why East Asia could successfully turn itself into a booming economy from a “delayed economy”. Furthermore, the economist team in World Bank, who has strong background of neo-classical school, also began to change their traditional opinions and reassess the East Asian success. Especially, World Bank highly evaluated Asia’s “public policy” since it served as an excellent institutional framework for their economic jump. Even the success made by highly performing Asian economies (HPAEs) was described as “miracle” (World Bank, 1993). Ironically, a sudden financial crisis crashed the region shortly after the World Bank team worked out their famous report. The crisis was so fierce and sudden that the “miracle” sounded to begin melting down. And some economists began to argue that their forecast was correct which strictly predicted that East Asia would surely get into unrest because this region’s high growth rate was realized by inputting production factors (simply labor and capital) instead of by increasing productivity (Krugman.P,.1994). Also, some other economists criticized that the economic system in East Asia was far from “real capitalism” but “crony-capitalism” and severe institution issues existed in this region (Chang, 1998).