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

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. 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

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

Why is East Asia Rich? Introduction Economic Facts and Figures about East Asia “On Top of the World” In 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

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

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

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.

Why is East Asia Rich? Introduction EXAMPLEs 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

Why is East Asia Rich? Introduction EXAMPLE 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

Why is East Asia Rich? Introduction EXAMPLES 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

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)

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

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?

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