East Asia Growth Miracle

Question 1

Which countries are part of the East Asia Miracle Growth?

Answer 1

Leading Goose: Japan

1st Tier Geese: Taiwan , Hong Kong, Singapore, Korea

2nd Tier Geese: Thailand, Malaysia , Indonesia

Question 2

As the lead goose why did FDI outflow occur in Japan?

Answer 2

Over time labour costs in Japan rises [diminishing returns sets in] , losing its comparative advantage.

Japan invest in regional countries for cheaper labour (FDI outflow)

Question 3

What were the Zaibatsu in Japan and what did they contribute to Japan?

Answer 3

1. Zaibatsu were big conglomerates of major companies and banks, often controlled by a share-holding company.
2. Previously owned over half of Japanese industry, supported Japan’s war machine during 1930s and 1940s

Question 4

Which of the following sentence best describe the Zaibatsu in Japan

a.
They are set up to drive the economy to face outward growth industrialization

b.
They existed since meiji restoration period and supported the Japanese pursuit of militarism

c.
They were American firms

d.
They are stated owned firm

Answer 4

b.
They existed since Meiji restoration period and supported the Japanese pursuit of militarism

Question 5

Explain a Horizonal Keiretsu and a Vertical Keiretsu

Answer 5

Horizontal Keiretsu
A group of companies from different industries that are linked together, usually around a central bank or trading company.
Supports each other

Examples: Big groups like Mitsubishi, Sumitomo, and Mitsui.

Vertical Keiretsu
What It Is: A group of companies that are connected along a supply chain, usually centered around a major manufacturer that is not part of a Horizontal Keiretsu. All sectors are dedicated to serving the manufacturer at the core

Examples: Toyota and Nissan, along with their suppliers and distributors..

Question 6

What are the differences between a Zaibatsu and a Keiretsu

(Don’t have to learn but good to know just in case)

Answer 6

Keiretsu are less centralized than zaibatsu. They are often organized around a major bank and a trading company but consist of independent companies that collaborate.

Zaibatsu were controlled by a single family or a small group of families. They were highly centralized, with a hierarchical structure.

Question 7

What are the similar ways that Singapore and Hong Kong approached the industrialisation of the countries

Answer 7

A rapid sectoral transformation to manufacturing sector and promotion of free trade (Outward Approach)

Question 8

What are the differences in the way that Singapore and Hong Kong approached the industrialisation of the countries

Answer 8

Singapore: State-Directed Growth (The government plays a central, proactive role in directing economic development and investing in key sectors.)

Hong Kong: Free Market (The government adopts a minimal intervention approach, relying on market forces to drive economic activity.)

Question 9

What are the similar ways that Taiwan and South Korea approached the industrialisation of the countries

Answer 9

1. Temporary protectionism to boost local production and consumption
2. Later move on to Outward Oriented, trading with the US and Japan so local firms can have competition and develop.

Question 10

Why do Taiwan and South Korea still have significant investment in their primary sector?

Answer 10

Border conflicts with China and North Korea respectively. Need to have food security.