Introduction resulting in the economic statistics of each

Introduction

            The economic growth of the Western
world (specifically the United States) happened over the course of hundreds of
years. Contrasting to that is the growth of China and Japan, which also took
time to develop and thrive. Yet the rapid economic growth of specific Asian
countries, known as the Four Tigers is a what some would call a miracle. South
Korea, Hong Kong, Singapore, and Taiwan did not follow the general curve of
economical success, and the factors that allowed for that to happen is the
education of the civilians, the focus on exports, investments,
and the structure of the governments. After breaking down the history of each
country and how each has grown, discussed in short will be how the success and
influences of the leader of the Asian economics, China, eventually led to the
thriving of The Four Tigers.

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The Four
Tigers

The Asian tigers are countries that have maintained rapid
economic growth since the 1960’s, landing themselves in the 35 advanced economies
list by the International Monetary Fund (IMF). 1 Alongside strong government policy, the countries
were fueled by the strong work ethic of the people, high personal savings
rates, education, and entrepreneurship, resulting in the economic statistics of
each country is impressive:

·      
Taiwan boasts a GDP of $523 billion with a per capita GDP of
$32,000.

·      
Singapore has a GDP of $297 billion with per capita GDP $82,000.

·      
South Korea has a $1.4 trillion GDP with a per capita GDP of
over $35,000.

·      
Hong Kong has a GDP of $321 billion with a GDP per capita of $36,000.
2 South Korea and Taiwan have become important countries
in the manufacturing of automobiles and electronics, and Singapore and Hong
Kong have become one of the biggest financial entities in the world.3

South
Korea

South Korea’s GDP per capita
in the 1960’s was at the level of the impoverished
countries of Africa and
Asia. Now, South Korea holds trillions
of dollars and is one of the largest economies in the world.4 Lacking in natural resources, South Korea aimed to
offer cheap labor that attracted large companies to the country. After
accomplishing that the government invested in research and development of
technology, and now South Korea is home to some of the biggest companies on the
planet, such as Hyundai,
Samsung and Daewoo.
It is currently the largest tiger in terms of GDP.5

The Republic of Korea was formed in 1948 by Syngnam
Rhee, with the north half of the country becoming the Democratic Peoples
Republic of Korea ruled by Kim Il-Sun. The tension of the two countries
prompted war, with North Korea invading South Korea on June 25, 1950. With the
North armed by the Soviets, The United States rushed to the side of the South in
the war. Eventually the use of atomic weapons was threatened by President
Dwight D. Eisenhower, and an armistice was signed on July 27, 1953. Syngman Rhee
was not happy to see a divided Korea, but was willing to cooperate when the
United States offered economical help and protection against future attacks.6

To help the US army, the Korean National Railroad was
formed. It was the work that these construction projects that increased economic
growth in the 1960s. This later diffused into Vietnam, forming the companies
Hanjin and Hyundai. These companies later expanded into the Middle East, where
the demand for construction was high due to the oil boom.7

The leader of Korea would change 3 times, with Rhee
being forced to resign and John M. Chung taking the reign. Due to the corrupt
government under John Chung, he was overthrown by Park Chung-Hee. Park was
elected to be president of Korea in 1963. Having experience with the Japanese
Manchurian economic model, Park wanted to industrialize Korea. Starting with
the very successful Saemaul Undong (movement), Park kickstarted agricultural
production by improving rural infrastructure. This made South Korea self-sufficient,
allowing for trade to be focused elsewhere. Park moved to focusing on the Heavy
and Chemical Industries, which also proved to be successful. Park Chung-Hee
managed to kick start the industrialization of Korea in a very short period,
and his success paved way for the chaebols of Korea. Chaebols are the large
corporations of Korea – the most recognizable ones being Hyundai, Samsung, LG,
and Hanjin.8

Originally Korea had focused on the import of raw materials and technology at over consumer goods.
They also encouraged
savings and investment.
South Korea was growing, yet could not completely withstand the Asian Financial
Crisis of 1997. GDP went down 7% in 1998, and recovered 9% a couple years
after. From then on Korea’s GDP has grown at about 4% every year, and in 2012 The US-Korea Free Trade Agreement was signed, but in the years since South Korea has
experienced slow growth. Now the government making structural reforms along with promoting of entrepreneurship and creative industries to try to compete against the chaebols.9

Singapore

Singapore is the most successful tiger, boasting the most open economy in the world. Originally facing high levels of unemployment and
illiteracy with a GDP per capita of $516, Singapore has grown to where it has
a GDP per
capita of $55,182, higher than any
other Asian country.10

After becoming independent from Malaysia due to
political tensions, Singapore went from a country of poverty to a thriving
center of international trade, and the person responsible for that was Minister
Lee Kwan Yew. During the time the local industry was very limited, so Lee Kwan
Yew focused on bringing in foreign industry. To do this he tempted the
potential companies with low tax rates and the fact of an incorrupt and fair
government. Lee Kwan Yew then began upgrading the streets, airports, and infrastructure
with a special tax instead of borrowed money. With the development of
industrial lands and good labor laws, this improved investor confidence and ultimately
paving way to a successful economy.11

Singapore now has an extremely low unemployment rate
and relies on the exports of technology and pharmaceuticals. It has continued
to grow, yet starting in 2014 the growth has been slow at under 3%. The government is trying to lessen the dependence on foreign labor, and has increased Singaporean wages in an attempt to do
so. Singapore has had large investments in the pharmaceutical market. It is
part of the Trans-Pacific Partnership and is now one of the leading financial
hubs in Asia.12

Hong Kong

Many people agree that Hong Kong is the most appealing
in terms of business environment, being the third largest recipient of FDI (foreign
direct investment). It now has a free market economy that focuses on external trade and investment, and the GDP has grown more than
180 times since the 1960s.13 It is home to the Port of Hong Kong, one of the
biggest trade seaports in the world.14

Originally a British colony, the development of Hong
Kong was industrialization alongside small-medium sized enterprises. In 1968, factories
employing less than one hundred people soon accounted for 42% of Hong Kong’s
exports to the United States. Small-medium enterprises are 98% of enterprises
in 2002, and are 60% of private employment.15

Hong Kong differed from the other tigers in terms of economic
development. The other countries had focused on state-led industrialization,
foreign firms, and large firms, while Hong Kong focused on low taxes, no
government debt, and free trade. Extremely ambitious, Hong Kong’s government created
public housing programs which allowed for immigrants to live and work. Along with
that was a public education program that created 300,000 new schools, allowing
99.8% of children who were the appropriate age to receive education.16

The role of government on international trade in Hong
Kong was minimal in the past, and is still the same now. Hong Kong has no tariffs on imported goods and has no quotas or dumping laws. It also only
imposes taxes and duties on hard alcohol, tobacco, hydrocarbon oil, and
methyl alcohol.17

Hong Kong and China have a close relationship in terms
of economics. Due to its open market economic it was affected by the 2008 economic
slowdown, yet because of the relationship with China it recovered more quickly than
expected. China has always been Hong Kong’s main partner in trade, allowing for
enough food and resources to be imported into Hong Kong. China has also allowed
for increase in trade, tourism, and has allowed for bonds to be issued in Hong
Kong. The tourism in Hong Kong has increased by more than 10 times due to China’s
restrictions being loosened, and Hong Kong is an ideal place for Chinese firms
looking to go abroad. 51% of firms on the Hong Kong Stock Exchange are Chinese,
and many agreements have been signed to allow for greater integration between
the two countries.18

Taiwan

Taiwan had a GDP per capital of $170 in the 1960s, but
that has grown more than 100 times to $32,000. It is the tiger that have experienced
the most growth.19 It was kickstarted in the 1960s when Mattel moved
manufacturing of Barbie dolls to Taiwan from Japan. Taiwan has benefitted
greatly from globalization, and thrives in the tech industry.20

After the Chinese Civil War in 1949, Nationalist forces
withdrew to Taiwan after Communists took over the mainland. There, Chiang
Kai-Shek implemented land reform and stabilized economy. After that, Taiwan
focused on export industries and became successful very quickly. The industrialization
of Taiwan began in the late 1950s, with Taiwan being an inexpensive place for manufactured
exports to be produced. Taiwan became an economic power by the 1980s.21

Taiwan now runs on a dynamic
capitalist economy. The government influence on investment and foreign trade
has decreased dramatically over the past few years, yet trade agreements have been
plentiful. The Economic Cooperation Framework Agreement (ECFA) was signed in
2010 with China, and others were signed with New Zealand and Singapore. But Taiwan
is currently facing the issues of low birth rate and diplomatic isolation, with
only one in 6 women having a child. The population is aging quickly, resulting
in labor shortages. There are currently concerns about non-growing wages, job
and financial security, and unemployment in Taiwan. Taiwan maintains a close
relationship to China. Although politically both countries have not resolved
tensions, China’s investments in Taiwan have allowed for the country to flourish.22

Similarities
of The Tigers

            Although each country has its own
history and making to success, all four tigers share common characteristics:
strong work ethic from the populace, high rate of personal savings, low crime
rates, and education.23 The
government in each country all had strong anti-corruption measures with strong
regulation. The economic plans avoided public debt and focused on building
savings.24
It is also a popular belief that the tragedies in each country allowed for the
growth of the economy. South Korea had the Korean War, Taiwan had the Chinese
Civil War, Hong Kong had the Communist China takeover, and Singapore had the Malayan
Emergency.25

China
and The Tigers

China was a huge factor in the success of The Tigers. Due
to the drastic economic growth in China, The Tigers were able to receive huge
amounts of investments from China.

1
Investopedia Staff,
“Four Asian Tigers,” Investopedia, July 29, 2015, , accessed December
10, 2017, https://www.investopedia.com/terms/f/four-asian-tigers.asp.

2 “TRADING ECONOMICS | 20
million INDICATORS FROM 196 COUNTRIES.” TRADING ECONOMICS | 20 million
INDICATORS FROM 196 COUNTRIES. Accessed December 10, 2017.
https://tradingeconomics.com/.

3 Investopedia Staff, “Four
Asian Tigers,” Investopedia, July 29, 2015, , accessed December 10, 2017,
https://www.investopedia.com/terms/f/four-asian-tigers.asp.

4 “South Korea.” Forbes.
Accessed December 11, 2017. https://www.forbes.com/places/south-korea/.

5 “The Asian Tigers.”
Development & globalisation. Accessed December 11, 2017.
http://developmentandglobalisation.weebly.com/the-asian-tigers.html.

6 Sibul, Eric, Dr. “Five Tigers
of Asia, Postwar Japan, Korea, Taiwan, Singapore, Hong-Kong .” Lecture,
Wilbur Wright College, Chicago, December 6, 2017.

7 Ibid.

8 Ibid.

9 South Korea.” Forbes.
Accessed December 11, 2017. https://www.forbes.com/places/south-korea/.

10 “The Asian Tigers.”
Development & globalisation. Accessed December 11, 2017.
http://developmentandglobalisation.weebly.com/the-asian-tigers.html.

11 Sibul, Eric, Dr. “Five Tigers
of Asia, Postwar Japan, Korea, Taiwan, Singapore, Hong-Kong .” Lecture,
Wilbur Wright College, Chicago, December 6, 2017.

12
“The Asian Tigers.” Development & globalisation. Accessed
December 11, 2017.
http://developmentandglobalisation.weebly.com/the-asian-tigers.html.

13
Ibid.

14
“Port of Hong Kong.” HKMPB | Port of Hong Kong. Accessed December 12,
2017. http://www.hkmpb.gov.hk/en/port/port.html.

15
Sibul, Eric, Dr. “Five
Tigers of Asia, Postwar Japan, Korea, Taiwan, Singapore, Hong-Kong .”
Lecture, Wilbur Wright College, Chicago, December 6, 2017

16
Ibid.

17
“Hong Kong.” Forbes. Accessed December 12, 2017.
https://www.forbes.com/places/hong-kong/.

18
Ibid.

19
Gaw, Kathryn. “The Story Behind the Four Asian Tigers | By Deal Making
Wire.” Deal Making Wire. June 15, 2017. Accessed December 13, 2017.
https://www.idealsvdr.com/blog/the-four-asian-tigers/.

20
“The Asian Tigers.” Development & globalisation. Accessed
December 11, 2017.
http://developmentandglobalisation.weebly.com/the-asian-tigers.html.

 

21
Sibul, Eric, Dr. “Five
Tigers of Asia, Postwar Japan, Korea, Taiwan, Singapore, Hong-Kong .”
Lecture, Wilbur Wright College, Chicago, December 6, 2017

22
“Taiwan.” Forbes. Accessed December 13, 2017.
https://www.forbes.com/places/taiwan/.

23
Sibul, Eric, Dr. “Five
Tigers of Asia, Postwar Japan, Korea, Taiwan, Singapore, Hong-Kong .”
Lecture, Wilbur Wright College, Chicago, December 6, 2017

24
Gaw, Kathryn. “The Story Behind the Four Asian Tigers | By Deal Making
Wire.” Deal Making Wire. June 15, 2017. Accessed December 13, 2017.
https://www.idealsvdr.com/blog/the-four-asian-tigers/.

25
Sibul, Eric, Dr. “Five
Tigers of Asia, Postwar Japan, Korea, Taiwan, Singapore, Hong-Kong .”
Lecture, Wilbur Wright College, Chicago, December 6, 2017

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