Advanced Search
MyIDEAS: Login

Asian Industrialization: A strategic analysis with a memorandum on the Australian response

Contents:

Author Info

  • Huw McKay
Registered author(s):

    Abstract

    This essay considers the economic performance of East Asia’s two largest economies in the second half of the twentieth century and debates prospects for the first half of the twenty-first. The discussion takes place in the context of dynamic strategy theory. First in Japan, and then later in China, ‘developmental’ states adopted strikingly successful industrialisation strategies with a common thread of outward orientation. Outward orientation is distinguished from export dependence. The former is an autocatalyzing sub-strategy that can sustain an economy all the way to full membership of the strategic core. Outright export dependent strategies, in contrast, are finite and imitative rather than auto-catalyzing, leaving their practitioners highly exposed to adverse external shocks. Japan’s experience of strategic rise, stagnation and eventual exhaustion is articulated at length to illustrate this important distinction. China’s own outward-oriented strategy, which is currently stimulating rapid economic growth and differs in many important respects from Japan’s, is then analysed in an attempt to examine its future viability. China’s prospects for adapting an alternative strategy prior to exhaustion are then considered. The conclusion is that it is reasonable to expect China’s strategic leadership to attempt to transition towards a sub-strategy that continues to sponsor industrialization through exploitation of the mass internal market in the broad context of outward orientation. Furthermore, the contemporary sub-strategy is clearly far from exhausting itself. However, the risks are consequential. On balance, prospects for a successful transition are sound but not overwhelming. An Asian-facing resource rich economy such as Australia should actively hedge the risks of unsuccessful transition. In the face of this uncertainty, Australian strategists are thankfully not facing an independent binary choice. To hedge against the possibility of the more pessimistic projections coming to fruition in China, thereby unhinging a resource dependent substrategy, Australia must make an independent effort to make an assertive move towards the upper echelons of productivity performance. This will involve a wholesale reassessment of the scale of national resources that should be directed to the innovation infrastructure.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://sites.google.com/site/institutegds/home/workingpapers/WP004.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by Institute of Global Dynamic Systems in its series GDSC Working Papers with number 004.

    as in new window
    Length:
    Date of creation: Jun 2008
    Date of revision:
    Handle: RePEc:auu:wpaper:004

    Contact details of provider:
    Postal: Canberra, ACT 0200
    Phone: +61 2 6125 3807
    Fax: +61 2 6125 0744
    Email:
    Web page: https://sites.google.com/site/institutegds
    More information through EDIRC

    Related research

    Keywords: Asian industrialisation; Chinese and Japanese strategic pursuit; dynamicstrategy theory; Snooksian strategy function; Australian economic policy;

    Find related papers by JEL classification:

    This paper has been announced in the following NEP Reports:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:auu:wpaper:004. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Drew Treasure).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.