Question

Discuss the experience of export growth of the four Asian NIEs, touching on the aspects of growth rates, changes in export structures, and major export destinations.

Answer 1

NIE (Newly Industrialized Economies) have presented high levels of growth. Republic of Korea, Taipei,China, Hong Kong and Singapore, the four Asian NIEs experienced extremely rapid manufactured export growth, which can be seen as a critical variable in ‘economic take-off’.  The share of these 4 countries in the world exports of manufactures rose from 1.5 % in 1965, to 5.3 % in 1980 and to 7.9% in 1990

All countries started with a focus on technologically simple labor-intensive goods – clothing, sports goods, toys, processed foods etc. Although the speed of graduation from these has varied, moves into a range of more capital-intensive, technologically sophisticated items have always followed. This common pattern of initial specialization on labor-intensive or resource-intensive activities followed by a move up the ladder of comparative advantage is to be seen. The emergence can be seen during the 1980’s of substantial exports of more capital and technology-intensive goods, such as electrical machinery, chemicals and pharmaceuticals, computer and communications equipment; some of these goods embodied advanced, international best-practice technology.

In most interpretations of the Miracle story this rapid growth of exports is seen as providing the key demand stimulus to set in train a cumulative process of high investment, high profits, high savings and high growth.

Major Export Destinations for NIEs include United States, Japan, India, Australia and Germany.