Aspect of East Asia development

Many economists have been startled by the extraordinary expansion of most East Asian economies during the past fifty years, which has prompted the publication of numerous articles and books that attempt to explain the phenomenon. Many books and articles have been produced in an effort to explain why East Asian nations like China, Hong Kong, Korea, and Singapore, among others, have dramatically risen to the top of lists of the most economically developed nations that export their goods to different nations across the world. The mystery surrounding the economic growth of the East Asian market is the subject of numerous discussions and studies. Over the past ten years the Asian countries which are; China, Hong Kong, Korea, Singapore, Japan, Thailand and Taiwan province of China has shown a tremendous economic development in both their export and market trends. Hong Kong, Singapore, Taiwan Province of China, and Korea are considered the four Tigers due to their impressive, influential and overawe economic performance; with an annual advance of over six percent output per individual compared to China, Thailand and Japan that has an annual growth of three to 5 per cent output per person.

Despite the high economic development in East Asia, their path to success has been a difficult due to their historical setbacks of wars, economic crisis, and social challenges. The East Asia experienced both the cold and hot wars which were a major setback to its economic development since the early 1920s.

Changes observed during the economic development of the East Asia

The following unique characteristics emerged as a result of the economic changes that occurred in the East Asia; (1) wide range of gross domestic product and per capita income, (2) increased growth rate sustained for long term and (3) high investment and savings rate, industrialization and traded advancement for a sustainable economic growth.

Factors that contributed to economic development

Trade and investment

East Asia economy is driven by the trade and investment growth which is highly measured by the shifts in gross domestic products (GDP), increase in earnings and increase in exports. Besides, the powerful merge and contribution of each East Asian country as an economic benefactor is an unusual characteristic that boosts its economic development; the input of each member country towards the economic advancement is more valued than the market policies that seemed friendly (Armstrong et al 110). In every step of development, every state contributes new ideas towards the production network developed by private companies. Moreover, a well-advance and transparent system of division of labor are available in the region.

The international division of labor system has brought industrialization to a milestone in East Asia through geographical expansion and structural strengthening within every country. Economic advancement was very crucial to the East Asia, to form a production link under stiff competition from the neighboring countries and upgrade from the low-tech to high-tech the countries had to opt for the international merge through trade and investment.

Desire for economic monopoly

The East Asia desire to be the economic drivers led to the desire for economic development. Every country in East Asia wanted to own material well-being and show their level of excellence to their neighboring countries (Armstrong et al 109). The market trends and policies did not spearhead their desire to be economic drivers but the desire to outdo other countries regarding economies of scale and accumulation of wealth for exports.

Every developing Asian country tried to beat their neighbors, and this led to their economic advancement. The countries wanted to achieve a substantial financial independence in East Asia (Grill et al 23). For instance, Japan is termed as the back-born of East Asia since the country is the largest donor and core partner in trade and investment as well as the primary production link to the East Asia, whereas East Asia is the chief support of the Japanese development projects during the time Japan was facing a social crisis.

Active participation of the government in economic development

Private companies are known to be the core drivers of economic advancement in every country due to the opening of new enterprises and creation of jobs, but that effort is faced by various obstacles ranging from weak market structures, insufficient human resources and poor technology resulting in low production.

The government has a role to play to curb the issues that not only private sector face but also other small business owners and improve the country economic status. East Asia has embraced good governance which is inclusive participation, structural changes, transparency and microeconomic stability.

Microeconomic stability is the core value in the propagation of economy in East Asia, all the East Asian countries takes microeconomic stability as a virtue of their economic growth in their region as it will curb diseconomies of scales as well as shift in market policies that will affect their trade and investment in the country that will lead to economic fall in the region (Grill et al 26).

The major role of the East Asia state is to enhance stability in their political and social arena which is a core factor to any economic growth. East Asia practices the authoritarian governing whereby the decision is top-down, and the leader is a powerful and economically mature.

The government has roles to play to advance the market and keep the economic might. The following are the three function of the government in East Asia (1) creation of market economy, whereby the government has the obligation to mix market and the state in regard to advancement level, formulation of the rules and regulations that guides trade and investment is the role of the government as well as dictation of which technology and structure should be applied, (2) relentlessly advocate for international interaction while controlling any danger associated with it. In East Asia interaction is the root of economic growth, it is a requirement for every country to have a plan for interaction whereby the country get enough incentives while avoiding the economic and social consequences that comes with the interaction and (3) controlling adverse impacts of economic improvement, East Asia state must come up with a strategy that prevents the effects of gaps created by its people, race, and social class as a result of economic growth (Grill et al 28). The role of the government ensures that the economy expands and risks are reduced to maintain the economic power in East Asia.

Concrete regional cooperation

Regional cooperation is essential for the upkeep of the Asian zeal. Despite the free markets that exist, there is the emergence of issues that act as a stumbling block to the progress in production, trading, and savings. Therefore, regional cooperation serves as a cure for the uncertainties, challenges, and issues that arise during the process of making changes in the economic sector; thus, enhancing the growth of industries and preventing marginalization to promote growth in East Asia (Holliday 710).

Regional cooperation is evidenced in East Asia through the improvement of the human resource, well-developed infrastructures, supporting the small scale business, creation of institutions from trading, mutual development of policies and invention of strategies to cope with the negative impact of economic growth (Holliday 716). In East Asia cooperation is attributed through mutual engagement with other countries outside East Asia with no marginalization, peer pressure and voluntary action is the virtue that promotes collaboration.

According to Holliday (718), Economic interaction in East Asia is trade- driven whereby the private activities are considered primary while the government policies are considered supplementary contrary to the institution-driven interaction practiced by the European Union. Therefore, the strategy makes the East Asia gaining more private connection in integration compared to any other region. Also, the different framework developed by the East Asian countries continue to make their regional cooperation intact, the structure includes; Free trade area, the Chiang Mai initiative for central bank cooperation and the Asia-Europe meeting among other continue to strengthen the economic development in East Asia.

Economic advancement and poverty reduction strategy

East Asia is one region that does not only concentrate on poverty alleviation as the only goal for economic growth, but the inclusion of other financial goals such as social equity is put into consideration. The East Asian countries believe that social issues arise in every society and priority should be given to these matters, for instance, income gap and overpopulation which when not taken care of results to increase poverty in the countries. Most of the East Asian countries have form policies that can accommodate the World Bank poverty reduction approach and the United National Millennium development goals in that the economic development goals can enhance the visions and goals that the developing countries in East Asia want to achieve without much strain (Bourguignon et al 59).

The use of information technology

The tremendous growth of the East Asia economies can be widely linked to the use of informatics in all the sectors which was backed up by the favorable policies developed by the government. Production improved due to the utilization of the new machines and less use of the human labor, machines are faster, and information can be circulated from one industry to another and within the office in seconds.

The large allocation of resources and legal framework that guides the use of internet has enhanced the international protocol, customer confidentiality, conflict resolution and authentication that usually arise due to the utilization of the internet. The strategy has enabled the East Asian economy to grow since the information of a country cannot leak out on how much profit the country has accumulated. The legal framework has reduced hacking and leaking of financial reporting of a country as well as protection of its citizens.

The use of public policies for economic growth

East Asian countries formulated a structure that enables the region to accumulate, acquire and advance in the technological sector to survive in the competitive market. The public policies are categories into two part the core and the selective intervention. The core interventions include a massive accumulation of human capital, sustainable and safe economic structure, and stable microeconomic and reduced inflation while the particular response comprises of the minimal financial repression, promotion of few industries and trade regulations for exports (Kwon 482). The policies help the developing East Asian countries from economic collapse since the countries concentrate on the resources they have through the policies formulated.

Most of the East Asian countries concentrates applied several policy frameworks that focus on the economic goals especially savings, market stability and significant investment among the people to reduce future burdens that may be caused by inflation and change in the market trends that may lead to the fall of the economy. East Asia focuses on the exports and microeconomic stability rather than depending on international exports.

Support of the shipping policy

The role of the industrial policy could not have worked better without the assistance of the shipping policy. The countries in the East Asian through their particular government formulated the export policy to promote the home-made products and to secure the exploitation of the resources that they own, against the competitors that had a well-developed strategy of trading (Fan et al 302). For instance, the Britain is viewed as an economic giant and if the framework is not laid down to protect exploitation the country can experience a hitch in the economic sector; due to unfavorable trade tariffs.

The export policy gave rise to the mushrooming of industries to meet the production target. Thus, the rate of investment in East Asia increased leading to the great economic success experienced in East Asia. The export policy triggered competition in the local market so that they can meet the standard of the fierce competition given by the international markets. For example, the Korean state gain more advantage in the shipping, car batteries and electronics industries due to the export policy, the competition made the desire to penetrate the market to the top.

Successful political ruling

The political factors in the East Asian community are favorable, and stability is experienced in the countries. The stable environment and good political ties among the states in East Asia enable them to carry out the trade with no barriers and sanctions administered. Business deals are signed with no political intentions and ideas are shared among the states without any intimidation. Thus, collective responsibility is achieved with no political gain (Gill et al 23).

Proper coordination is enhancing between the private sector and the government, in that the government can share issues with industry without the fear of intimidation which increases the efforts of excellent coordination and avoidance of suspicion.

Political stability promotes high production since there is no movement and interruption due to insecurity issues and this is one factor that has significantly improve the economic ties within the states in the East Asian community. The peaceful environment result to a high corporate social responsibility in that the citizens, companies and the government work hand in hand to ensure the growth of the economy that does not harm the environment or the people.

Impacts of the economic development in East Asia

Low fertility and expectancy rate

Due to the economic growth in the East Asia, the nations decided to take population measure as the government came to realize that high population is a threat to the economy. Also, the government learned that high population growth is not related to economic development but other factors do. The population in Taiwan and China was alarming, and measures had to be taken to encourage small families and reduced birth rated through family planning (Gill et al 27). The government in the developing countries in East Asia launched anti-natalist propagate and education on family planning to control the population growth.

Development of strong partnership with other nations worldwide

The economic development in East Asia resulted in closing ties with other countries across the world. Many countries especially the super power countries such as the United States have strong trade ties and partnership with East Asian countries. For example, the assembling of the apple phones that is owned by the United States Company is done in China; this shows a strong tie between the two countries. Most of the construction skills are hired from China especially the developing countries in Africa depend on China for trade and building materials. Thus, partnerships and business ties are maintained.

Increased gross domestic products

The East Asian countries enjoy the highest gross domestic products annually because they export more than they import. Japan, for instance, has the highest gross domestic product due to the car export and spare parts, and China follows the lead. The countries make more than ten percent of gross domestic product per person, which is very high compared to other nation’s world.

Stable interdependence in trade and flow of capital

The East Asian countries enjoy the highest capital flow and trade among themselves. They are the market controllers, they have the highest expert shares of over forty percent, and still, it is increasing. The annual exports of the products from Japan and China amount to over fifty billion dollars which portray the East Asia domination in the current market.

In conclusion, despite the East Asian countries challenges in the previous decades which were world wars and social upheavals that left their entire nation without any resources to depend on and environmental destruction experienced in a country such as Japan, they were able to pick up and emerge the top most financial controllers in the world. Formulation of many strategies of trade and political stability together with improved technology enhanced their capital flow and many exports.

The use and the treasure of the available resources together with the emphasis on the investment and savings ensure that the market remains stable especially the microeconomic stability. Many countries have a lesson to learn from the East Asia and try to adopt the policies that the developing countries in the East Asia apply to reach at least the level the East Asia has managed to achieve.

Work citedTop of Form

Armstrong, Shiro, and Bruce Chapman. Financing higher education and economic development in East Asia. ANU Press, 2013: 106-118

Top of Form

Gill, Indermit Singh, Homi J. Kharas, and Deepak Bhattasali. An East Asian renaissance: ideas for economic growth. World Bank Publications, 2007: 19-36

Bourguignon, François, Francisco HG Ferreira, and Nora Lustig, eds. The microeconomics of income distribution dynamics in East Asia and Latin America. World Bank Publications, 2005.

Fan, C. Cindy, and Allen J. Scott. "Industrial agglomeration and development: a survey of spatial economic issues in East Asia and a statistical analysis of Chinese regions." Economic geography 79.3 (2003): 295-319.

Holliday, Ian. "Productivist welfare capitalism: Social policy in East Asia." Political studies 48.4 (2000): 706-723.

Kwon, Huck‐ju. "Transforming the developmental welfare state in East Asia." Development and Change 36.3 (2005): 477-497.

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