The Economies of Asia

Traditional Economy Needs are fulfilled in the same way as their ancestors.

Command Economy The government determines what will be produced, how it will be produced and who it will be produced for in society.

Market Economy Individual businesses make their own decisions about what to produce and how to produce it without government regulations.

Mixed Economies Communist –The government produces all of the consumers’ needs and wants. Socialist –The government produces the consumers’ needs and private businesses produce the wants. Capitalist – Private businesses produce most basic needs and wants with some government regulations.

Economic Systems Pure Market Pure Command Mixed Economy

100 Economic Systems Israel 68% Saudi Arabia 64% Iran 45% Pure Market 7th Grade- This information is meant to be used in conjunction with the 6th and 7th grade Teacher Notes. For additional resources, go to GeorgiaStandards.org. (Note: This is not an expectation for students to memorize numbers, but to understand that factors that influence specific countries to move more towards a command or market economy). The numbering system is based on The Heritage Foundation’s Economic Freedom Index 2009 The Heritage Foundation is a conservative organization that has partnered with the Wall Street Journal for over a decade to evaluate each country based on a set of 10 criteria to determine economic freedom. Update information using resources listed in the Teacher Notes. 100 Pure Command Pure Market Mixed Economy 7

100 Economic Systems South Africa 64% Nigeria 55% Pure Market Pure 7th Grade- This information is meant to be used in conjunction with the 6th and 7th grade Teacher Notes. For additional resources, go to GeorgiaStandards.org. (Note: This is not an expectation for students to memorize numbers, but to understand that factors that influence specific countries to move more towards a command or market economy). The numbering system is based on The Heritage Foundation’s Economic Freedom Index 2009 The Heritage Foundation is a conservative organization that has partnered with the Wall Street Journal for over a decade to evaluate each country based on a set of 10 criteria to determine economic freedom. Update information using resources listed in the Teacher Notes. 100 Pure Command Pure Market Mixed Economy 8

100 Economic Systems Japan 73% India 54% China 53% North Korea 2% 7th Grade- This information is meant to be used in conjunction with the 6th and 7th grade Teacher Notes. For additional resources, go to GeorgiaStandards.org. (Note: This is not an expectation for students to memorize numbers, but to understand that factors that influence specific countries to move more towards a command or market economy). The numbering system is based on The Heritage Foundation’s Economic Freedom Index 2009 The Heritage Foundation is a conservative organization that has partnered with the Wall Street Journal for over a decade to evaluate each country based on a set of 10 criteria to determine economic freedom. Update information using resources listed in the Teacher Notes. 100 Pure Command Pure Market Mixed Economy 9

India’s Economy Mixed Economy It is a mixture of the traditional and the modern. In villages, farmers still work in the fields. There are also modern factories and high-tech service industries. Almost 60% of India’s workforce are farmers who grow barely enough to feed their families. India’s leading crops are rice, wheat, cotton, and tea. India is still considered a developing country.

India’s Economy, Cont’d Its economy is large enough to rank among the world’s top 10 industrial countries. Some Indians are very rich, but most are still poor. Booming electronics industry, producing computers, software, televisions, CD players, VCR’s, launched several communications satellites systems and leads the region in a number of related fields. Bollywood films are as popular in Southern and Eastern Asia as are films in U.S.

China’s Economy When the Chinese Communists took over in 1949, they set up a nearly pure command economy. The Communists took over an economy that was almost solely based on farming. Today, China produces everything from satellites to rockets to toys.

China’s Economy, Cont’d In the late 1970s, the gov’t introduced elements of free enterprise. Now, farmers can grow and market their own crops on part of their rented land. Millions of Chinese have started their own small businesses.

Japan’s Economy Japan has few natural resources, so it must import many raw materials to run its industries. The country produces about 1/3 of its energy through nuclear power. Japan has the world’s largest fishing industry. Fish is a major part of the Japanese diet.

Japan’s Economy, Cont’d Japan is known for its high-quality cars and items like TVs, cameras, and CD players. Their economic success is due partly b/c of a high literacy rate and partly b/c of the peoples’ strong work ethic. Japan’s market economy depends on trade, especially with countries in the Pacific Rim.

North Korea’s Economy This is one of the world's most centrally directed and least open economies. The central government plans the economy, controls what’s produced, owns all land and housing, and controls access to jobs. Only 14% of North Korea’s land can be farmed. It’s farmed by cooperatives-groups of farmers who work the land together. Some people grow food for themselves in small gardens.

North Korea’s Economy, Cont’d North Korea doesn’t produce enough food to feed its people and historically imported needed food from the Soviet Union. When it collapsed it lost its main source of food and has faced famine at times. Poor harvests in the mid 90s made things worse, famine ensued, and thousands starved to death. North Korea is rich in mineral resources. They make machinery, iron, and steel, but their factories use outdated technology. The government has invested in nuclear power plants.

Gross Domestic Product (GDP) Market value of all final goods and services produced in a country in a year (Final goods and services have been purchased for final use. They are not for resale or further manufacture) C + I + N + G Consumption Spending by households on goods and services, including spending on such things as cars, food and visits to the dentist. This makes up 2/3 of the GDP spending. Investment Spending on business machinery, factories, equipment, tools and the construction of new buildings. Net Exports Net exports are calculated (x-m) where x is exports and m is imports. Spending by people not living in the US on goods and services made in the US Minus Spending by people in the US on foreign goods and services. Government Spending on all levels of government on goods and services, including spending on the military, schools and highways. GM cars, Coca Cola minus Call center service The sum of CING is GDP

Factors that influence GDP (make it go up and down): Investment in physical and human capital – New Jobs / New Factories Incentives to save, invest and increase productivity Government / Employer Low Inflation Economic condition in which prices of goods and services increase Gas Prices, Grocery prices go up! Political Stability Economic Freedom Free Trade