The East Asian Miracle

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This paper treats the upswing of HPAE's and the resulting socio-economic effects. Crisis and new order of Asian economies are described, all according to the socio-political approach of N.Fligstein.

Table of Contents

1. Introduction1

1.1 Problem statement1

1.2 Outline1

2. The field of world economic relations2

2.1 Defining the field2

2.2 Political culture of the field2

3. The emergence of Asia: challengers or invaders?4

3.1 Japan's economic miracle4

3.2 Overthrowing technologies4

3.3 Status of Japan in the field of the world economy5

3.4 Flying geese approach to the East-Asian miracle5

4. The Asian crisis and after9

4.1 Asian crisis9

4.2 Impact of the Asian crisis on world economic relations9

4.3 After the crisis: more cooperation10

4.4 China and the future10

5. Conclusion12

References13

1. Introduction

1.1 Problem statement

The economic surge of Japan and several other Asian countries after the Second World War was a surprise to many, but once "awake", these countries seemed ready to take over the world. The countries in focus, named High-Performance Asian Economies (HPAEs), are Japan, Singapore, Hong Kong, Taiwan, South Korea, Indonesia, Thailand and Malaysia. HPAEs indeed tried to join the incumbents in the field of world economic order, and western economies felt threatened ever since Japanese growth rates first surpassed theirs. According to the theory of fields, the challengers test the incumbents by imitation. One can wonder if this was indeed the case with the Asian miracle. Did these countries attempt to adopt the western model of capitalism? Furthermore, it is interesting to ask why they were not able to cling to their economic success and why they were not able to reproduce their newly acquired position in the field and could continue to increase their newfound economic power. Finally, future prospects concerning this topic might be interesting to examine.

1.2 Outline

First, the field of world economic relations and its culture are defined. Then the growth success of Japan and smaller HPAEs will be analysed, explaining it and assessing its impact on the field of world economic relations. The focus is then shifted to the Asian crisis of 1997 and its consequences for the field. Finally, a prospect is given with respect to the future role of HPAEs as well as that of the newly emerging economy of China. Finally, the main conclusions will be drawn.

2. The field of world economic relations

2.1 Defining the field

In this paper the field of the world economy is discussed. This involves the sum of ways in which different economic entities interact with each other (e.g. trade, foreign investment). It is important to notice that this field differs substantially from fields where the main actors are businesses. In this field, the actors are not involved in the zero-sum game that competitive markets confront companies with. Nations benefit from the wealth of other nations; therefore, it cannot be said that the economic success of one must lead to the decline of the other. Of course, there will in the end always be only a small number of leading countries, but it would not be unrealistic to assume that many successfully developing countries can join the ranks of incumbents, instead of competing them away.

2.2 Political culture of the field

We can find a few strong and powerful incumbents. The countries that have been able to reproduce themselves most successfully are all rich, industrialised nations. First of all, The United States. Second, there's Germany, France, Canada and now also Japan. Many smaller challengers, who do not have the power to set rules of exchange and conceptions of control, have accepted a role as follower of the larger incumbent economies. Furthermore, it must be noted that 15 European challengers and incumbents have created a single market among themselves, which also allows them to present themselves as one player to...
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