POLS 373 Foundations of Comparative Politics Lecture: Why is East Asia Rich? Part 1, Brief Introduction Lecture: Why is East Asia Rich? Part 1, Brief Introduction

2 Why is East Asia Rich? Map of East Asia With Japan, South Korea and Taiwan. China and North Korea are also considered part of East Asia

3 Why is East Asia Rich?  Before we address the “why” question, we should begin with an even more basic task, which is simply to determine if, in fact, East Asia is rich  Let’s consider some basic facts, first about South Korea and Taiwan …  Before we address the “why” question, we should begin with an even more basic task, which is simply to determine if, in fact, East Asia is rich  Let’s consider some basic facts, first about South Korea and Taiwan …

4 Why is East Asia Rich?  South Korea and Taiwan have achieved astonishingly high rates of economic growth between 1960 and 1990  In Taiwan, per capita income increased from $50 in 1970 to $2,500 in 1984  In South Korea, the figures were $87 in 1962 and $1,709 in 1983  South Korea and Taiwan have achieved astonishingly high rates of economic growth between 1960 and 1990  In Taiwan, per capita income increased from $50 in 1970 to $2,500 in 1984  In South Korea, the figures were $87 in 1962 and $1,709 in 1983

5 Why is East Asia Rich?  By 2004, per capita income (in PPP$) increased to $25,300 in Taiwan and $19,200 in Korea, making both countries very well off in relative terms  By contrast, consider these figures for less prosperous countries: Russia: $9,800, Mexico: $9,600; Peru, $5,600; Philippines: $5,000; India, $3,100; Haiti: $1,500; Ethiopia: $800  By 2004, per capita income (in PPP$) increased to $25,300 in Taiwan and $19,200 in Korea, making both countries very well off in relative terms  By contrast, consider these figures for less prosperous countries: Russia: $9,800, Mexico: $9,600; Peru, $5,600; Philippines: $5,000; India, $3,100; Haiti: $1,500; Ethiopia: $800

6 Why is East Asia Rich?  On an absolute basis, South Korea was the 14th richest country in the world in 2005, while Taiwan was 16th  See  On an absolute basis, South Korea was the 14th richest country in the world in 2005, while Taiwan was 16th  See

7 Why is East Asia Rich?  The graph below 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

8 Why is East Asia Rich?  But the wealth of Taiwan and Korea is not just based on per capita income: both countries have achieved remarkable success in “catching up” with more developed countries with regard to technology and industrial capacity  Many Korean and Taiwanese firms, for example, are among the leaders in the computer sector, cell phones, flat panel displays, semiconductor manufacturing, and so on.  But the wealth of Taiwan and Korea is not just based on per capita income: both countries have achieved remarkable success in “catching up” with more developed countries with regard to technology and industrial capacity  Many Korean and Taiwanese firms, for example, are among the leaders in the computer sector, cell phones, flat panel displays, semiconductor manufacturing, and so on.

9 Why is East Asia Rich?  South Korea, in fact, is the only developing country to ever successfully break into the major western automobile markets  Taiwan is also competitive in many of these same fields, but not as a “branded” product  South Korea, in fact, is the only developing country to ever successfully break into the major western automobile markets  Taiwan is also competitive in many of these same fields, but not as a “branded” product

10 Why is East Asia Rich?  Example: Hyundai, along with Kia (of which it owns 47%), is the world ’ s seventh largest automotive company, but it has been growing fast and has ambitious plans for the future. In fiscal 2004 (year-end December 31st) worldwide sales were up 16.2% and topped 2 million vehicles for the first time  Overseas sales, consisting of exports and, increasingly, output from foreign plants, jumped some 30% in At over 1.7m, foreign sales now approach 75% of the company ’ s total sales. Production at overseas plants rocketed 85% from 2003, to some 450,000 units.  Example: Hyundai, along with Kia (of which it owns 47%), is the world ’ s seventh largest automotive company, but it has been growing fast and has ambitious plans for the future. In fiscal 2004 (year-end December 31st) worldwide sales were up 16.2% and topped 2 million vehicles for the first time  Overseas sales, consisting of exports and, increasingly, output from foreign plants, jumped some 30% in At over 1.7m, foreign sales now approach 75% of the company ’ s total sales. Production at overseas plants rocketed 85% from 2003, to some 450,000 units. Picture: Hyundai Motor Manufacturing Alabama, LLC (HMMA), Hyundai's first assembly and manufacturing plant in the United States. The new generation of Sonata's are being built in Montgomery, Alabama in this $1.1 billion automotive plant, one of the most advanced assembly plants in North America

11 Why is East Asia Rich? Korean companies are globally competitive in many cutting-edge, high-tech fields such as plasma HDTVs (LG and Samsung), semi- conductors (Samsung), cell phones (Samsung and LG), MP3 players (Samsung), and automobiles (Hyundai and Kia).

12 Why is East Asia Rich?  In Japan, per capita income increased from only $200 in the early 1950s to almost $2,000 by 1971, which made Japan the fifth richest country in the world at the time  By1998, Japan's per capita income had increased to $42,081 (non- PPP), placing it well in front of all G-8 economies  In PPP terms, Japan had a per capita GDP of $30,615 compared to $41,299 (in 2005) in the United States; Japan’s relative position internationally was only 16th, but all other countries in front of Japan, except for the U.S., had a population of more than 100 million fewer people (most of the richest countries have populations of less than 10 million people)  In Japan, per capita income increased from only $200 in the early 1950s to almost $2,000 by 1971, which made Japan the fifth richest country in the world at the time  By1998, Japan's per capita income had increased to $42,081 (non- PPP), placing it well in front of all G-8 economies  In PPP terms, Japan had a per capita GDP of $30,615 compared to $41,299 (in 2005) in the United States; Japan’s relative position internationally was only 16th, but all other countries in front of Japan, except for the U.S., had a population of more than 100 million fewer people (most of the richest countries have populations of less than 10 million people)

13 Why is East Asia Rich?  Japan has the world’s third largest economy, with a total GDP of almost $4 trillion  Moreover, Japan is the technological leader in many vitally important industrial and technological fields  Japan has the world’s third largest economy, with a total GDP of almost $4 trillion  Moreover, Japan is the technological leader in many vitally important industrial and technological fields

14 Why is East Asia Rich?

15 Why is East Asia Rich?  All these facts and figures raise important questions:  How did Japan, South Korea and Taiwan achieve their amazing development?  What is their secret to success?  Why have they been able to do what so many other countries have been unable to do?  All these facts and figures raise important questions:  How did Japan, South Korea and Taiwan achieve their amazing development?  What is their secret to success?  Why have they been able to do what so many other countries have been unable to do?

16 Why is East Asia Rich?  Background Video: The People’s Century: East Asia Rising  As you watch, consider the following questions:  Can you identify an implicit argument about the reasons for East Asia’ economic success?  Or can you identify certain important factors?  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  Background Video: The People’s Century: East Asia Rising  As you watch, consider the following questions:  Can you identify an implicit argument about the reasons for East Asia’ economic success?  Or can you identify certain important factors?  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

17