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East Asian Tigers

The East Asian Tigers are the economies of Taiwan, Hong Kong, South Korea, and Singapore. These four economies were known for their phenomenal growth between the early 1960s and 1990s, and are of interest to developmental economies in that they were able to move from third world status to first world status in a few decades and were able to progress past other developing areas, particularly Latin America and sub-Saharan Africa.

The economic policies of the Tigers contain both similarities and differences. The Tigers all espoused a model of export-driven economies with relatively closed domestic markets and rejected import substitution. In addition, there was a government commitment in all of the Tigers to improving education, particularly elementary education. There was also a government commitment to egalitarianism in the shape of land reform. Finally, all four economies maintained non-democratic, and in all of the cases except for Hong Kong, rather repressive governments during the 1960s and 1970s.

It is important to note that until the mid-1970s it was not clear that the East Asian Tigers were a particular area of fast growth and that the Tiger development model produced superior results to either neoliberal[?] (US-backed policies), Soviet, or import substitution development models.

Much of the image of the Asian Tigers was removed by the Asian Economic Crisis[?] which hit the Tigers to varying degrees. Taiwan was not strongly effected, while South Korea was badly battered by the crisis.

Comparison with Mainland China

One area of interest is the comparison between Mainland China and the Tigers. These comparisons can be divided between the Maoist era and the era of reform starting with Deng Xiaoping. The main question that has been raised with respect to the Maoist era is to what extent the economic performance of the Tigers was reproducible in Mainland China in the 1960s. The main question that has been raised with respect to the post-Maoist era is to what extent the development of the PRC is sustainable.

An important question is the relevance of the experience of the Tigers to current economic growth in Mainland China. In the 1980s it was common to argue that the export-centered growth of the Tigers was of limited relevance to Mainland China because the Tigers were small and any effort to mimic them would result in more exports than the developed world could handle. This objection was later less often raised since the pattern of economic growth has been for exports to trigger economic growth in the coastal regions, and for these coastal regions to serve as markets and triggers for growth in the interior.

Since the late 1990s, this debate has become increasingly less emotional. As a result of the Deng Xiaoping reforms, the PRC has one of the world's highest rates of per capita GDP growth (if not the highest), making the debate one of historical rather than current interest. In addition, the recent contentious issue is Taiwan independence, not the desire for one to demonstrate superiority over the other. The Communist Party of China and Kuomintang today both tend to favor the status quo over Taiwan independence.

Ironically, and to the chagrin of many Westerners, it has been common for the Communist Party of China to use the experience of the Asian Tigers as justification for its authoritarian rule. The argument by the Party is that at the current stage of economic development the PRC needs a non-democratic system similar to those that the Tigers had in the early years of growth.

Simply a Free-market Miracle?

During the Cold War, Taiwan, which had much stronger economic growth than the People's Republic, was presented as an example of the triumph of capitalism over socialism.

The Asian Tigers’ spectacular ascent to economic prominence attracted much comment. Some Western economists, notably at the World Bank, depicted it as a vindication of free-market principles, and this interpretation of the Tigers' success formed large part of the Washington consensus[?].

Many have even argued that local politics and geopolitics, as much as economics, explain the East Asian “miracle”. Others, most notably the Chinese Communists, have harkened to the experiences of the Tigers to defend authoritarian governments as well to focus on the ways in which the Tigers could be said to “govern” the market.

Some Western observers have argued that the Mainland would have reached Taiwan’s contemporary level of development if the Kuomintang had stayed in power. These claims are beginning to be discredited as vitriolic anti-Communist propaganda. Taiwan, after all, is by no means a microcosm of the Mainland.

In the first place, two million Kuomintang supporters fled to the island in 1949, establishing the small island of less than 20 million as the seat of the Republic of China. (Interestingly enough, the Ming Dynasty survived for a brief period of time in exile in Taiwan.) Taiwan thus benefited from the flight of many well-educated, bourgeois Chinese.

Second, Taiwan, and for that matter all four of the Tigers, befitted economically from previous foreign rule or influence, whether it was British commerce in Hong Kong and Singapore, or Japanese industrialization and American land reform in Taiwan. In a sense, Taiwan benefited from Marx’s export of the dialectic through imperialism. Furthermore, each of the Tigers was an artificial polity severed from larger neighbors—Communist China in the case of Taiwan and Hong Kong, Malaysia in the case of Singapore. Likewise, South Korea was a product of postwar division and bloody civil war. Each therefore felt acute insecurity, which was translated into political structures that restricted civil liberties and subordinated short-term social well-being for economic growth.

Third and perhaps most important, its economy could not, wrenched in quick succession from Japan’s orbit and then China’s, have developed without direct American aid, which constituted more than 30 percent of domestic investment from 1951 to 1962. Land reform, government planning, US aid and investment, and free universal education brought huge advancement in industry and agriculture, and in living standards.

In addition, land reform was an essential step in modernization. In conducting land reform on Taiwan, Chiang Kai-Shek was aided by American encouragement in addition to the fact that many of the large landowners were Japanese who had fled there after World War II, and the remaining indigenous landowners had little voice in government. Most agree that it is extremely unlikely that Chiang Kai-shek would have revolutionized Mainland Chinese society to that extent if he had defeated the Communist Revolution. In summary, the transformation of Taiwan cannot be understood without reference to the larger geopolitical framework. Although aid was cut back in the 1970s, it was crucial in the formative years, spurring industrialization. In addition, even after the cutoff of aid, security and economic links were maintained. Uncertainty about the US commitment accelerated the country’s shift from subsidized import-substitution in the 1950s to later export-led growth. Like Korea, Taiwan moved from cheap, labor-intensive manufactures, such as textiles and toys, into an expansion of heavy industry and infrastructure in the 1970s, and then to advanced electronics in the subsequent decades.

In response, it has been argued that the immigrants who fled with Chiang Kai-shek were more of a liability than an asset, and that the role of United States aid and direct investment is overstated. In particular, it is pointed out that the capital for investment came largely from indigenous sources and that foreign aid had ended before the economy had taken off. Since a large number were soldiers, the wave of immigrants was not a reflection of Chinese society. Indisputably, a disproportionately high share of the immigrants were Mandarin governing elites, merchants, Chinese capitalists, and well-educated professionals.