Introduction The economic growth of the Westernworld (specifically the United States) happened over the course of hundreds ofyears. Contrasting to that is the growth of China and Japan, which also tooktime to develop and thrive. Yet the rapid economic growth of specific Asiancountries, known as the Four Tigers is a what some would call a miracle. SouthKorea, Hong Kong, Singapore, and Taiwan did not follow the general curve ofeconomical success, and the factors that allowed for that to happen is theeducation of the civilians, the focus on exports, investments,and the structure of the governments. After breaking down the history of eachcountry and how each has grown, discussed in short will be how the success andinfluences of the leader of the Asian economics, China, eventually led to thethriving of The Four Tigers.The FourTigersThe Asian tigers are countries that have maintained rapideconomic growth since the 1960’s, landing themselves in the 35 advanced economieslist by the International Monetary Fund (IMF). 1 Alongside strong government policy, the countrieswere fueled by the strong work ethic of the people, high personal savingsrates, education, and entrepreneurship, resulting in the economic statistics ofeach 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 ofover $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 countriesin the manufacturing of automobiles and electronics, and Singapore and HongKong have become one of the biggest financial entities in the world.3SouthKoreaSouth Korea’s GDP per capitain the 1960’s was at the level of the impoverishedcountries of Africa andAsia. Now, South Korea holds trillionsof dollars and is one of the largest economies in the world.4 Lacking in natural resources, South Korea aimed tooffer cheap labor that attracted large companies to the country.
Afteraccomplishing that the government invested in research and development oftechnology, and now South Korea is home to some of the biggest companies on theplanet, 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 SyngnamRhee, with the north half of the country becoming the Democratic PeoplesRepublic of Korea ruled by Kim Il-Sun. The tension of the two countriesprompted war, with North Korea invading South Korea on June 25, 1950.
With theNorth armed by the Soviets, The United States rushed to the side of the South inthe war. Eventually the use of atomic weapons was threatened by PresidentDwight D. Eisenhower, and an armistice was signed on July 27, 1953. Syngman Rheewas not happy to see a divided Korea, but was willing to cooperate when theUnited States offered economical help and protection against future attacks.6To help the US army, the Korean National Railroad wasformed. It was the work that these construction projects that increased economicgrowth in the 1960s. This later diffused into Vietnam, forming the companiesHanjin and Hyundai.
These companies later expanded into the Middle East, wherethe demand for construction was high due to the oil boom.7The leader of Korea would change 3 times, with Rheebeing forced to resign and John M. Chung taking the reign.
Due to the corruptgovernment under John Chung, he was overthrown by Park Chung-Hee. Park waselected to be president of Korea in 1963. Having experience with the JapaneseManchurian economic model, Park wanted to industrialize Korea. Starting withthe very successful Saemaul Undong (movement), Park kickstarted agriculturalproduction by improving rural infrastructure. This made South Korea self-sufficient,allowing for trade to be focused elsewhere.
Park moved to focusing on the Heavyand Chemical Industries, which also proved to be successful. Park Chung-Heemanaged 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 largecorporations 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 encouragedsavings and investment.South Korea was growing, yet could not completely withstand the Asian FinancialCrisis of 1997.
GDP went down 7% in 1998, and recovered 9% a couple yearsafter. 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 hasexperienced slow growth. Now the government making structural reforms along with promoting of entrepreneurship and creative industries to try to compete against the chaebols.9SingaporeSingapore is the most successful tiger, boasting the most open economy in the world. Originally facing high levels of unemployment andilliteracy with a GDP per capita of $516, Singapore has grown to where it hasa GDP percapita of $55,182, higher than anyother Asian country.10After becoming independent from Malaysia due topolitical tensions, Singapore went from a country of poverty to a thrivingcenter of international trade, and the person responsible for that was MinisterLee Kwan Yew. During the time the local industry was very limited, so Lee KwanYew focused on bringing in foreign industry.
To do this he tempted thepotential companies with low tax rates and the fact of an incorrupt and fairgovernment. Lee Kwan Yew then began upgrading the streets, airports, and infrastructurewith a special tax instead of borrowed money. With the development ofindustrial lands and good labor laws, this improved investor confidence and ultimatelypaving way to a successful economy.11 Singapore now has an extremely low unemployment rateand relies on the exports of technology and pharmaceuticals. It has continuedto 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 doso. Singapore has had large investments in the pharmaceutical market.
It ispart of the Trans-Pacific Partnership and is now one of the leading financialhubs in Asia.12Hong KongMany people agree that Hong Kong is the most appealingin terms of business environment, being the third largest recipient of FDI (foreigndirect investment). It now has a free market economy that focuses on external trade and investment, and the GDP has grown more than180 times since the 1960s.13 It is home to the Port of Hong Kong, one of thebiggest trade seaports in the world.14 Originally a British colony, the development of HongKong was industrialization alongside small-medium sized enterprises. In 1968, factoriesemploying less than one hundred people soon accounted for 42% of Hong Kong’sexports to the United States. Small-medium enterprises are 98% of enterprisesin 2002, and are 60% of private employment.15Hong Kong differed from the other tigers in terms of economicdevelopment.
The other countries had focused on state-led industrialization,foreign firms, and large firms, while Hong Kong focused on low taxes, nogovernment debt, and free trade. Extremely ambitious, Hong Kong’s government createdpublic housing programs which allowed for immigrants to live and work. Along withthat was a public education program that created 300,000 new schools, allowing99.8% of children who were the appropriate age to receive education.16 The role of government on international trade in HongKong 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 onlyimposes taxes and duties on hard alcohol, tobacco, hydrocarbon oil, andmethyl alcohol.17Hong Kong and China have a close relationship in termsof economics.
Due to its open market economic it was affected by the 2008 economicslowdown, yet because of the relationship with China it recovered more quickly thanexpected. China has always been Hong Kong’s main partner in trade, allowing forenough food and resources to be imported into Hong Kong. China has also allowedfor increase in trade, tourism, and has allowed for bonds to be issued in HongKong. The tourism in Hong Kong has increased by more than 10 times due to China’srestrictions being loosened, and Hong Kong is an ideal place for Chinese firmslooking 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 betweenthe two countries.
18TaiwanTaiwan had a GDP per capital of $170 in the 1960s, butthat has grown more than 100 times to $32,000. It is the tiger that have experiencedthe most growth.19 It was kickstarted in the 1960s when Mattel movedmanufacturing of Barbie dolls to Taiwan from Japan. Taiwan has benefittedgreatly from globalization, and thrives in the tech industry.20 After the Chinese Civil War in 1949, Nationalist forceswithdrew to Taiwan after Communists took over the mainland. There, ChiangKai-Shek implemented land reform and stabilized economy. After that, Taiwanfocused on export industries and became successful very quickly. The industrializationof Taiwan began in the late 1950s, with Taiwan being an inexpensive place for manufacturedexports to be produced.
Taiwan became an economic power by the 1980s.21Taiwan now runs on a dynamiccapitalist economy. The government influence on investment and foreign tradehas decreased dramatically over the past few years, yet trade agreements have beenplentiful. The Economic Cooperation Framework Agreement (ECFA) was signed in2010 with China, and others were signed with New Zealand and Singapore.
But Taiwanis currently facing the issues of low birth rate and diplomatic isolation, withonly one in 6 women having a child. The population is aging quickly, resultingin labor shortages. There are currently concerns about non-growing wages, joband financial security, and unemployment in Taiwan. Taiwan maintains a closerelationship to China. Although politically both countries have not resolvedtensions, China’s investments in Taiwan have allowed for the country to flourish.22Similaritiesof The Tigers Although each country has its ownhistory and making to success, all four tigers share common characteristics:strong work ethic from the populace, high rate of personal savings, low crimerates, and education.
23 Thegovernment in each country all had strong anti-corruption measures with strongregulation. The economic plans avoided public debt and focused on buildingsavings.24It is also a popular belief that the tragedies in each country allowed for thegrowth of the economy. South Korea had the Korean War, Taiwan had the ChineseCivil War, Hong Kong had the Communist China takeover, and Singapore had the MalayanEmergency.
25Chinaand The TigersChina was a huge factor in the success of The Tigers. Dueto the drastic economic growth in China, The Tigers were able to receive hugeamounts of investments from China. 1Investopedia Staff,”Four Asian Tigers,” Investopedia, July 29, 2015, , accessed December10, 2017, https://www.investopedia.
com/terms/f/four-asian-tigers.asp.2 “TRADING ECONOMICS | 20million INDICATORS FROM 196 COUNTRIES.” TRADING ECONOMICS | 20 millionINDICATORS FROM 196 COUNTRIES. Accessed December 10, 2017.https://tradingeconomics.com/.
3 Investopedia Staff, “FourAsian 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 Tigersof 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 Tigersof Asia, Postwar Japan, Korea, Taiwan, Singapore, Hong-Kong .” Lecture,Wilbur Wright College, Chicago, December 6, 2017.
12″The Asian Tigers.” Development & globalisation. AccessedDecember 11, 2017.http://developmentandglobalisation.weebly.com/the-asian-tigers.html.13Ibid.
14″Port of Hong Kong.” HKMPB | Port of Hong Kong. Accessed December 12,2017.
hk/en/port/port.html.15Sibul, Eric, Dr. “FiveTigers of Asia, Postwar Japan, Korea, Taiwan, Singapore, Hong-Kong .”Lecture, Wilbur Wright College, Chicago, December 6, 201716Ibid.
17″Hong Kong.” Forbes. Accessed December 12, 2017.https://www.forbes.
com/places/hong-kong/.18Ibid.19Gaw, Kathryn. “The Story Behind the Four Asian Tigers | By Deal MakingWire.” 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. AccessedDecember 11, 2017.http://developmentandglobalisation.weebly.com/the-asian-tigers.
html. 21Sibul, Eric, Dr. “FiveTigers of Asia, Postwar Japan, Korea, Taiwan, Singapore, Hong-Kong .”Lecture, Wilbur Wright College, Chicago, December 6, 201722″Taiwan.
” Forbes. Accessed December 13, 2017.https://www.forbes.
com/places/taiwan/.23Sibul, Eric, Dr. “FiveTigers of Asia, Postwar Japan, Korea, Taiwan, Singapore, Hong-Kong .”Lecture, Wilbur Wright College, Chicago, December 6, 201724Gaw, Kathryn. “The Story Behind the Four Asian Tigers | By Deal MakingWire.
” Deal Making Wire. June 15, 2017. Accessed December 13, 2017.https://www.
idealsvdr.com/blog/the-four-asian-tigers/.25Sibul, Eric, Dr. “FiveTigers of Asia, Postwar Japan, Korea, Taiwan, Singapore, Hong-Kong .”Lecture, Wilbur Wright College, Chicago, December 6, 2017