China, India, Japan, & North Korea Economies of Asia

China—Overview World’s largest exporter GDP per capita = $14,300 Primary exports: electrical and other machinery, clothing, textiles Top export partners: Hong Kong, U.S., Japan Primary imports: electrical and other machinery, oil/fuel, medical equipment, cars Top import partners: South Korea, Japan, Taiwan, U.S.

China—How do they decide… What to produce? How to produce? For Whom to Produce? 40% based on state-run industries Inefficiencies (agriculture) limit China’s growth Food production must meet self-sufficiency level; extra is exported 60% based on private sector (production decisions made by producers & consumers) Rapid economic growth Difficult to monitor pollution and consumer safety Large amounts of manufactured goods exported

India—Overview Diverse economy English-speaking population major exporter in various technology-based fields GDP per capita = $6,300 (rising gradually) GDP breakdown—services (66%), industry (17%), agriculture (~17%) Primary exports: petroleum products, precious stones, machinery, iron & steel Top export partners: UAE, US, China Primary imports: oil, precious stones, machinery Top import partners: China, UAE, Saudi Arabia

India—How do they decide… What to Produce? How to Produce? For Whom to Produce? Moving toward market economy since 1991 (private sector and foreign businesses) Legal challenges and heavy tax system make operating a business difficult. Working to improve this. Food production—mostly domestic; citizens produce for family consumption Lots of corruption in business world Increasingly educated workforce (engineering and computer science) Export markets rapidly expanding for private Indian companies

Japan—Overview Economy top priority of Shinzo Abe & the Diet after several economic recessions GDP per capita: $38,200 Primary exports: vehicles (& parts), plastic materials, power generating/conducting materials Top export partners: China, U.S., South Korea Primary imports: petroleum, natural gas, clothing, semiconductors, coal, audio/visual equip. Top import partners: China (21.3%), U.S. (8.8 %), Australia

Japan—How do they decide… What to Produce? How to Produce? For Whom to Produce? Primarily market-driven Supply and demand determine production Private businesses determine production processes High standard of living = strong domestic market for goods and services Government-controlled = lower productivity rates Agriculture Major exporter because of efficiency and reputation for quality goods/services

North Korea—Overview Military spending reduces availability of resources for civilians GDP per capita: $1,800 Primary exports: minerals, metal products, manufactured goods (weapons), textiles, agriculture & fish products Top export partners: China & South Korea Primary imports: petroleum, coal, machinery & equipment, textiles, grain Top import partners: China & South Korea

North Korea—How do they decide… What to Produce? How to Produce? For Whom to Produce? Some small market reforms, but majority of economy controlled by gov’t. Production decisions and methods determined by government ¼ of output devoted to military—limits goods/services for rest of population Large recipient of food and aid from foreign nations Natural resources and manufactured goods exported Large underground economy (market-based)

Where are they on the continuum? Command Economy Market Economy 56.2—India 2.3—North Korea 52—China 73.1—Japan *World Average: 60.7 *Current US Score: 75.4 (11th in the world)

Asian Economies—Quick Quiz Market Command China Japan India North Korea Economic system w/ almost full government control Economic system driven by supply and demand Country that is closest to full market Country with the most government control Country that is considered the world’s leading exporter Country with a diverse economy, becoming more market-based