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MGCR 382 (143)
John Saba (33)

Lecture 5

13 Pages

Management Core
Course Code
MGCR 382
John Saba

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International Business Lecture 5Midterm exam covers chapter 1 2 3 and 6 up to page 159 onlyChapter 2Global marketplace and business centers contAsia cont Objective 6 THE 4 TIGERSThey are 1South Korea 2Taiwan 3Hong Kong 4SingaporeEarly 1960s to 1990s these countries had high growth rates and rapid industrialization 2000 to today all 4 Tigers became developed and high income economies with high growth rates but Attention has increasingly shifted to other Asian economies that are now experiencing faster economic growth The fours Asian Tigers abandoned the import substitution model advocated in the developing world between the two world wars Exportdriven model of Japan was adopted including Domestic consumption was discouraged through government policies such as high tariffsGrowth was fuelled by an abundant cheap and productive workforceThey invested in education to improve productivityCommon characteristics of the 4 Tigers areDeveloped economies with high GDP per capitaFocus on exports to richer developed countriesTrade surplus with trading partnersSustained rate of doubledigit growth for decadesHigh level of US Treasury bond holdingsMotivated and skilled workersHigh savings rate Effects All 4 Asian Tigers have specialized in areas where their relatively cheap productive labour gives them a competitive advantage ExamplesHong Kong and Singapore became leading international financial centersSouth Korea and Taiwan became world leaders in information technologyThe Future The 4 Tigers governments know that the easy and predictable prosperity of exportled growth and cheap labour costs will not last foreverTo keep competing with the emerging manufacturing giants alike China they will have toCreate new industries Move up the value added chainCreate stronger service sectors SOUTH KOREA A country in East Asia born after the Korean war divided the Korean peninsula into communist north Korea and capitalist sought Korea ndCapital is Seoul the worlds 2 largest metropolitan cityEconomy OverviewSince the 1960s South Korea has achieved an incredible record of growth and global integration to become a hightech industrialized economy Population 483 million Is a highincome OECD member ththAsias 4 largest economy and the worlds 15 largest GDP ppp 2009 1343 trillion GDP asof world total 19 GDP per capita ppp 2009 27700 GDP is similar to CanadasIt has followed the Japanese model of economic growth with Exportdriven growthA system ofGovernment leadership in the economyClose government and business tiesLarge economic combines for industrialization chaebolsProtectionism that keeps consumer goods imports out but the government promoted the import of raw materials and technology which they need for their own manufacturing processes Encouraged savings and investment over consumptionEffects of these policies Growing Industries Electronics Telecommunication Automobile production Chemicals Shipbuilding SteelExports 3736 billion Imports 3175 billion Reserves of foreign exchange and gold 2459 billion
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