Astounding Japan, South Korea, Taiwan, and China
Across the history of mankind, there are few in any more fantastic stories of economic transformation than the Four Asian Tigers, followed by the stunning economic progress of China.
It may be hard for students to comprehend the degree of poverty across China in the 1980s. Since the early 1990s over five hundred million in China have lifted themselves out poverty. They follow the path of tens of millions moving from poverty to prosperity in earlier decades in Hong Kong, Taiwan, South Korea, and Singapore.
For the Middle East debate topic students could learn from the success of Hong Kong, Singapore, South Korea, and Taiwan. Hong Kong was a refugee camp in the 1950s, yet its economy grew rapidly even as millions more impoverished refugees arrived from Communist China. (And in Could Refugee Camps be Startup Cities?, I argued refugees in camps across the Middle East and Africa could have similar prosperity if allowed similar economic freedoms.)
Japan’s economy, like West Germany’s, grew spectacularly after being bombed flat in World War II. Economists explained their success by noting that before the war Japan and Germany were industrialized, so had the culture and traditions of developed economies.
Not so for Taiwan and South Korea, both poor countries in the 1950s and 1960s that, along with Hong Kong and Singapore, whose people worked their way from poverty to prosperity in a generation, and have continued becoming freer and more prosperous every since. And it was investment and expertise from these countries that launched surging economic development across China since the 1980s.
From the 1960s to 1990s governments across the Middle East and Africa were accepting western economic advice and millions of foreign aid dollars calling for developing their economies from the top-down. Most of these countries stifled domestic enterprise with taxes and regulations, and blocked or corrupted foreign direct investment.
In East Asia, as governments of the Four Tigers opened their economies significantly to foreign investment, prosperity followed.
“You got on the one hand, the Open Free Market System in America, you have on the other hand, the exact opposite, the closed, controlled, command economy of the Soviet Union, Communist Russia…
The Chinese tried the Communist model, with their own modifications, and it failed! And they have admitted that it failed, and they’re trying to pick up the same competitive spirit between workers, between different enterprises, which they noticed in Hong Kong, so they have opened a new town on the border with Hong Kong called “Shamchun” (Shenzhen in Cantonese) and they’re inducing Hong Kong entrepreneurs to go… and create employment!