(iii) Public-Private Partnership: So many firms and businesses are also owned
public and private partnerships. However, most of their administration lies with
(iv) Individual Businesses: These businesses consist of small, medium and large
enterprises. Here, members of a family control these businesses. Such type of
firms are increasing rapidly.
(v) Businesses of Chinese Living Abroad: The Chinese living in Singapore,
Indonesia and Malaysia etc., are also investing in their home land. The
local Chinese and Chinese abroad start joint business ventures.
(vi) Foreign Investment: Here 100% investment is made by foreign enterprises
companies. They control the business under the rules of the state.
All this shows that China's developmental model
is the mosaics of six colors.
The developing countries should follow it. Because of fantastic progress China's
exports have moved to $450 billion in 2006 which were of $15 billion in 1979.
China has a population of 1.25 billion with the policy of one-child. The
imports of China are of $300 billion. China will likely to play a vital role in WTO in the coming days. Three decades earlier, China was country whose 80%
population was living below poverty line. At that time so me indicators
of China and India, like exports, GDP growth rate and literacy rate, were more
less same. But Indian exports are around $120 billion, but China has surpassed
India ii case of so many indicators.
The total GDP of the world is $42 trillion and out of it the share of China
is $1.1 trillion. Its share in world trade is 3.3% and it is seventh big
country of the world. Here, poverty ratio is 10% while the literacy ratio is
more than 95%. The annual saving rate of China is 42%. China doubled its per
capita GNP in the period of 10 years. While it took 10 years to UK to do so, 50
years to US and 25 years to Korea. It is said that till 2025, China will be at
the top of the list after US, on the basis of economic performance.
East Asian - A
In 1993, the World Bank published a study regarding Asian Development having
the title, "East-Asian Miracle: Economic Development and Public Policy". In this
study the East-Asian development has been discussed which is also furnished with
Equity. The East Asian countries comprise Thailand, Japan, South Korea, Taiwan,
Singapore, Hong Kong, Malaysia, Indonesia and China. Though these countries diverge
in different ways, yet they have cultural harmony having the roots with
Confusion Philosophy and Buddhism. The exports think that the East Asian countries
have Japan and four small dragons like Korea, Thailand, Taiwan, Hong Kong and
Singapore and new dragons like Malays Indonesia, Thailand and China.
Features/Characteristics of East Asian Countries Development:
development of these countries can be compared the development of DCs and such
development can be accorded a "Second-Case" capitalistic way of life. The
following are the salient features of East-Asian developmental model:
(i) They have
a higher growth rate which lasted not for the years for the decades; they have
a higher growth rate along with falling level of income inequalities (the case of
(ii) The distinctive improvement in the standard of living
of the major portion of the population.
(iii) The effective role of govt. in
the developmental process.
(iv) The lower rate of taxation.
(v) The higher saving rates
and the ever extending export-base. The people of these countries have a strong
inspiration to develop collectively and attain stability. Their people are found
well organized within their families and out of their families in the form of
different groups. They love education and stress heavily upon providing better
education to their offspring's. They possess immense nationalism. They try to
maintain the traditions of their institutions. They sacrifice their lives for
their rights and their obligations for the state and they give due importance to
all of their countrymen, irrespective of their color, creed, faith, religion,
caste, sect, tribe and ranks. Such all may be given the name of "Investment in
Man". Thus, we find here a strong relationship between economic values and
The economic development which took place in the West is based upon natural
economic system, unlimited economic freedom of the producers, the
Iron Law of
Wages, abnormal profits, exploitation of labor and imperialism.
On the contrary,
the East-Asian development is not linked to the above mentioned factors, rather
it is based upon collective stability and discipline. It means that East-Asian
development model lacks of individualism, the corner-stone of the Western
development model. As told earlier that in the East-Asian development it is the
Confucian Philosophy which played an important role, and it is based upon life
style of discipline, self cultivation, respect for the authority and a stable
family system. It is also said that the Buddhism when crossed Tibet and
Plateau, this worldly religion have had a big change as it became the religion
of life, rather abandonment of life.
The people of China played an important
role, in this regard. Thus, the Confucianism and changed Buddhism provided the
foundation for East-Asian development. These countries have modernism (the case
of Singapore, Taiwan and Hong Kong) along with inspiration for change (the case
of Japan, China and Korea).
Now we discuss how the interaction of
higher growth rate and lower income inequalities took place in these countries,
or how the fruits of development reached a common man.
Higher Growth Rate and Fall in Poverty in East Asia:
(1) It is said that the countries where there exist income inequalities the
poor die in the youth. But the East-Asian countries not only attained higher
growth rates but they also decreased the poverty ratio by depressing income
inequalities. For this purpose, they made efforts to increase the life
expectancy of the people. As keeping Japan aside, the life expectancy rate in
East-Asian countries was 50% higher than low-income countries, while it was 25%
higher than middle income countries.
During 1970s the
PQLI based up (different
social indicators was one-third higher than middle-income while it was
higher to those of low income countries. It is told that the combination of
marvelous growth rate along with fall in poverty ratio is also attributed to
state intervention which was used with different degrees. As Hong Kong depended
upon market economy while Singapore user the weapon of govt., intervention with
great care. During 1960s Taiwan followed the free market mechanism while in 1970s it
increased govt., intervention. Whereas Korea depends upon laissez-faire. All
this shows that on the whole East Asian countries relied upon market forces as
compared with other developing countries. However, despite this, Korea, Japan,
China and Malaysia tried to maintain their discipline in their social, cultural
an economic traditions through govt. intervention, China which was basically a
socialist country went on liberalizing its economy even maintaining its
ideological identity. It gave lot of concessions to foreigners to make
foreign investment attractive. As a result, the trend to invest in China, on the
part of investors, state-owned enterprises, the Chinese living abroad and the MNCs,
went on increasing.
All this means that East-Asian
countries formulated such a model of market economy and state intervention which
not only led to a higher growth rate, but the poverty also decreased. The
poverty ratio in China is 10% as compared with 30% in Pakistan and 40% in India.
These countries stressed heavily upon boosting of exports. They produced
machinery, chemicals, consumer goods, electronics, consumer durables and even
the toys. They opted for both export promotion as well as import substitution
strategies. These strategies promoted labor intensive techniques. Their planning
strategy aimed at utilizing human resources as it not only increases
productivity but a fair distribution of wealth will also come into being. The
labor intensive technologies increased the demand for labor, particularly the
unskilled labor This led to promote incomes of the poor. The economic growth
uplifted the poor and income inequalities did not increase.
(2) It is said that after World War-II, we find re-distribution of
resources, particularly lands. As we find very effective type of land reforms in
Japan, Korea and Taiwan. The small fanners got the lands which increased their
incomes depressing down inequalities. The agri. tax was imposed in these
countries which led to transfer the resources from private sector to public
sector which were used for social development.
(3) Japan which suffered heavily during II World War, promoted nationalism
after the defeat. King Hero Hito who got permission to educate his countrymen
with Japanese language from the victorious America led his nation to move on the
path of development. Greater facilities were provided to Japanese and Korean
investors so that the confidence of investors could be restored. The investors
and businessmen who promoted their business, instead of consumption, were given
a higher degree of respect. The investors and producers used the labor
efficiently, while govt. made intervention to remove the market distortion due to
private investment. Thus the growth consequent upon higher industrial
development, utilization of surplus labor and export of manufactured goods also
resulted in fall of poverty ratio. The notable growth of Taiwan during 1960s and
70s is attributed to 13% growth rate in industrial sector. The farmers accepted
the new varieties of seeds. As a result, agri. production increased along with
The above discussion reveals that East-Asian countries got the development on
the basis of hard work, love for work, discipline, inspiration, authority, labor
intensive techniques, export-promotion strategy and govt. intervention in the
provision of social services. As a result, we find that Japan's annual exports
are above $350 billion and having a surplus trade balance. China's exports are
worth $400 billion with a favorable trade balance. Korean exports are of $100
billion and that of Taiwan are $150 billion.
The East-Asian Development Model
is an example for other developing countries. These countries got the
development during 50 to 60 years while the same was attained by western
countries after the struggle of centuries. In 1997 the East-Asian economies had
to face the financial crises which severely affected their developmental efforts. But with the help of
their strong leadership and assistance by IMF these countries overcome their
difficulties. But the fact is this such disturbance was due to side-effects of
Globalization. Despite all, this model has a great attraction for developing
countries like Pakistan, Afghanistan, India, etc.