1. The Asian economic core area: East Asia
dr. László Jeney
associate professor
Economic and Human Geography
Bachelor study programmes (BA)
Spring term 2017/2018.
CUB Centre of Economic Geography and Futures Studies

2. The area of the East Asia and Far East
Far East < East Asia
Northeast Asia (Siberia, Russian Far East)
East Asia (Japan, Korea, China, Mongolia)
Southeast Asia (Mainland SEA, Insular SEA)
Its borders
Debatable towards North and Inner Asia (Siberia, Mongolia, NW China, Tibet)
Large World region: East Asia
Territory: 12 mn km2 (8% of the World)
Population: 1,6 bn (23% of the World)  WR1. 2

3. East Asian miracle Parts of East Asia
Largest part China (≈ Europe, 9.6 km2, WR3.)  East + Inner Asia (Tibet, Uygur region)
Tajvan, Hongkong (NIC1)
Korea South (NIC1) and North: middle size Asian country, 222 th km2, 75 mn residents (N–S: 1127 km, W–E 645 km)
Japan
Mongolia
Late 20th century: reemergence of East Asia
Political, economic and cultural impacts
Refocuses the global economic growth and political power on the Pacific Region
Interactas to the globalization trends 3

4. The Japanese way to the economic miracle
dr. László Jeney
associate professor
Economic and Human Geography
Bachelor study programmes (BA)
Spring term 2017/2018.
CUB Centre of Economic Geography and Futures Studies

5. Japan: more than 2000 years old historical past
Till the early 17th cent.: empires (tenno)
Cultural and trading relations to other East Asian areas (mainly China, but Korea as well)
Capital: Kyoto
Power of army (leader shogun)  totally isolation (dynasty of Tokugawa shogun)
Centralized, on feudal basis
Capital: Edo (today: Tokyo)
Late 18th century: unsuccessful economic contacts by Europeans
Mid-19th century: successful contacts by the USA
Followed by the English, Dutch, French, Russian traders
1868–1912: restoration of the power of empire (Mutsuhito tenno)
Meiji period 5

6. Japan: more than 2000 years old historical past
Till the early 18th cent. XVII.: empires (tenno)
Cultural and trading relations to other East Asian areas (mainly China, but Korea as well)
Capital: Kyoto
Power of army (leader shogun)  totally isolation (dynasty of Tokugawa shogun)
Centralized, on feudal basis
Capital: Edo (today: Tokyo)
Late 18th century: unsuccessful economic contacts by Europeans
Mid-19th century: successful contacts by the USA
Followed by the English, Dutch, French, Russian traders
1868–1912: restoration of the power of empire (Mutsuhito tenno)
Meiji period

7. Reforms of education
Till that time the majority of society was analphabetic
Introduction of compulsory elementary education (earlier than more developed countries)
1880s: 6–13 years old boys 54%, girls 19% attended school
1900: 95% alphabet
More skilled manpower  adoption of Western technologies

8. Meiji reforms: civil change, rapid catch-up
Instead of feudal system  former peasantry  cheap manpower for the modernizing economy
First manufactures
Initially capital concentration in the richest feudal families  monopole organisations
Important role of state
Stabilization of the capitalist order
Central Bank: development of heavy industry, transport
Cancellation of the feudal social hierarchy
New administrative system (46 prefectures)
Permission of free movement of citizens
Cancellation of inner tolls  single market of the country

9. The East Asian economic Miracle
The only one world region in the focuses of the world economy starting not on the basis of the Western civilization
Maintenance of its own culture and traditions
Japan: the way to the economic power
Under a historically uneven short period
An outstanding rapidly growing economy for decades
Korea, Taiwan and Southeast Asia: follow the Japanese sample
China: political-military, cultural, and increasingly economic power

10. The Japanese economy changed massively after WWII
Post-war period: present government, economy and constitution were put in place
1960–1990: contribution to total world GDP grew from 3.5 to 14 %
1960–2002:
Primary sector declined from 33 to 1 percent
Service sector rose from 38 to 68 percent
From 1990s: Japanese economy slowed
China’s GDP 1.5 times higher
But per capita GDP remained much higher in Japan ($35.000) than in China ($6.000) 10

11. After reconstruction Reconstruction Advantageous environment for Japan
WWII: Japanese industry destroyed
After war: US poured money to rebuild the industries and infrastructure
Cold War, Communist takeover in China, Korean war  US became opened to Japanese products
Advantageous environment for Japan
Cheap raw material on world markets
Transportation innovation: building large oil tankers and carriers (oil from SW-Asia, iron ore from Australia)
Own low-cost, young labour force
1960s: 10 % economic growth
Firms indorsed profits back into new developments
Better wages  Japanese consumers could buy a range of home-made products 11

12. 1970s: increasing costs and „just in time”
1970s: increased oil prices
Japan depended on imported oil for 70 % energy needs
reduced costs of hydroelectricity and nuclear power
Older industries (steelmaking, shipbuilding, petrochemicals, cement making) suffered from overcapacity on world markets
Factory closures  social problems, unemployment (e.g. Osaka)
Investments to light industries (producing cameras, household appliances)
Firstly copied others’ technologies and designs, later initiator
By 2000 half of the world’s industrial robots (4x installed than in the US)
„Just-in-time” deliveries cut warehousing costs
Toyota: employed more human skills instead of indiscriminate use of robotics (  too expensive)
1980s huge export income  caused the yen to double in value compared to other currencies
Japanese export became more costly for other countries
Imports became cheaper
Turned country of producers to one of consumers 12

13. From 1980s: global investments
Large yen trading surpluses  Japanese corporations invested more
Firstly: bought out foreign mineral suppliers
Later: established Japanese factories abroad
Answer to quotas on import of home-made cars
First major investments in US and GB, from late 1980s then in Southeast Asia  economic growth of NIC countries
Mid-1990s investments in cheap-labour assembly-line factories by moving design and research facilities to SEA
Early 2000s: increasing investments in China (mainly to Dalian) – huge trade deficit to China 13

14. Renewed economic challenges
Early 2000s: J faced a need to change
Investments resulted huge debts  banking system under pressure
Western countries imitated Japanese production processes (Toyotism)
Japan looked more closely at Western ways in relation to financial control
Trade surplus  rapid growth of financial and business services
1986: Tokyo became the second financial centre  further population increases
Increase in service occupation  widened range of employment
Diversified economy  not so dependent on fluctuations of world markets 14

15. The developing East Asian giant: China15

16. 1949–1976: Attempted Geographic Shifts
Initial attempts of the Communist Government (Mao Zedong): Great Leap Forward + Cultural Revolution
Expand output rapidly
Distribute economic activities
Equality within China
Enhance national defence
1949: NE + Shanghai + Tianjin: 70% of output
Move the production of military goods inland
Factory locations close to the raw material sources (coal, hydroelectricity, oil)
Poor transportation linkages Central and W China developed slowly
Manufacturing production remained in NE
1978: economic output of China < S Korea or Taiwan 16

17. Changing directions after 1976
Deng Xiaoping: 1977 overall economic reforms
„4 modernizations”: agriculture, industry, science, defence
new approach to rural life
Encouraged investment from foreign corporations
Increasing manufactured exports
Economy multiplied six fold within 20 years
After 2000: further revolution based on telecommunication systems (use of internet and mobile phones)
1990–2000: telephone lines 10  125 mn
1995–2010: mobile phone users 5  800 mn (WR1)
Sensitivity of state control of website content
China does not follow the Asian sample
Asian NIC countries: 1. raw materials and food export, 2. simple manufactured than 3. more sophisticated goods, 4. service industries
China: all typed of goods from rice to microchips 17

18. Farming and rural living in the 2000s
Agriculture: prominent in the rural economy
Through Mao Zedong years: farming
Low govermental priority
Separated from other aspects of the economy
Low levels of mechanization  high labour inputs
1980: agriculture still employed the entire – growing – rural workforce
Early 1980s: relaxed commune controls  individuals and groups plan their own programs
Personal involvement  higher output
2000: half of the rural workers in farming

19. Rural industrial expansion
Township and village enterprises (TVEs)
New rural sources of income
Took underused rural labour
Higher wages
130mn employees (30% of rural workforce)
Driving forces
Initially: collectively owned enterprises (by late 1980s: from 22 to 36 % of Chinese industrial output)
Later: individual and private enterprises
Millions of people remained in industrializing rural areas
BUT: many millions more moved out of the rural areas to the cities

20. Manufacturing 22% of labour force, half of GDP
Standing on two legs: ancient-moderns, small-large
Huge development during the last four decades
Regional locations:
Before the revolution
Textile and food industry, ports
Steelmaking (Japanese): Northeast
First three decades of socialist industrialization
Inner parts of the country, regional equalization
From 1979: opening policy
High-tech industries, ports again, increases regional differences