Asia’s Tigers still going strong
When China woke up, Singapore, Taiwan, and South Korea did not keel over.
That’s the title quote from this article from RedHerring regarding the continued success of the Asian Tigers – Hong Kong, Singapore, South Korea, Taiwan – in face of China’s explosive growth. It’s an older article from last week but felt it was noteworthy after yesterday’s brief post on China’s weakening export demand.
China has certainly changed the game for the Tigers, but they have done well by the new rules. “Virtually all East Asian countries today have overall current account surpluses, and several have bilateral trade surpluses with China,†Stanford economist Ronald McKinnon wrote in a paper last October.
“China buys high-tech capital goods and industrial intermediate inputs from Japan, Korea, Taiwan, Singapore… [and] then transforms these inputs into a wide variety of middle-tech manufactured consumer goods for the U.S. market,†he wrote. “Many of China’s exports are from final processing industries, where value added per good produced in China itself isn’t high because many of the components come from Asian neighbors and elsewhere.â€
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Stuff happens. Today, the Tigers are still as export-driven as ever, but the trade routes, as Mr. McKinnon notes, have changed. The other thing that’s changed is the Tigers have to run faster and smarter to avoid getting crushed underfoot: China has become a powerhouse in many of the same industries that put the Tigers on the map—including semiconductors, consumer electronics manufacturing, and telecommunications—and is moving quickly up the value chain.
Read the whole thing, it’s an interesting commentary on the Tigers that echoes a familiar lesson: survival necessitates change. The Asian Tigers have continued to succeed and expand because they have continued to innovate and change. The same is true for just about any business. Those that fail to adapt will stagnate and eventually fail or be reduced to a meager subsistance.
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