East Asia Economy

The unparalleled growth of economies in East Asia over the past thirty decades have sparked a lot of interest from economists, with many arguments and explanations attempting to account for the actual dynamics that influenced such growths. Gaining prominence in the late 1970s, the paradigm of export-led growth replaced that of import-substitution, leading to development strategies designed to increase the productive capacities of economies by focusing on foreign countries (Palley 3). Economists have therefore argued that with openness of these economies and their export-led growth, the explanation for the success of countries such as Japan and South Korea might be the comparative advantage theory, political economy benefit, or the theory of …show more content…
The composition of trade for the country had shifted sharply from primary products to manufacture largely shaping up the portfolio of China’s international trade. The extent of China’s economic growth led by exports is such that for every four color-television sets sold around the world, one is from China while there is one Chinese in every five refrigerators around the world (Ibid 166). China has notably dwarfed other East Asian countries such as Japan, India, and South Korea, thus commanding a wider competitive advantage in terms of labor cost. One unique driver of the Chinese economy apart from exports is the wide availability of cheap labor. The labor force in the country is relatively well educated and healthier compared to those of countries in South Asia and ASEAN economies. As the economy grows from a vibrant export market, there is an equally abundant outflow of labor from the rural areas thus making the cost of labor cheaper and more competitive than those of neighboring countries. The prospects of exporting labor are therefore bright and likely to compact the already significant gains from export and re-export of