Do the Asian Tigers Still Drive Asia’s Growth?

For a long time economists, politicians and the world’s media have argued that Asia’s growth since the 1960’s has been driven to a large extent by the Four Asian Tiger Economies; South Korea, Taiwan, Hong Kong & Singapore. Although China and Japan are easily the largest regional economies, it was the ‘miracle’ of these four economies that interested observers. All of these states had export oriented economic policies and strong development policies. As a result they achieved sustained and rapid growth and high levels of equal income distribution, but in 2013 do the Asia Tigers still drive Asia’s growth and do they still have a role to play in making this century the so-called, ‘Asian Century’?

The simple answer is yes. These are still rapidly growing nations that are key cornerstones to regional development but to argue that Asia’s rise is down solely to these four nations is an over-simplicity.

(Above: The Merlion, Singapore’s symbolic representation of the ‘big cat’ ethos within global politics)

China is by far and away the economic and political powerhouse of Asia but close on its heals is India, another of the world’s largest economies, and Japan, who historically had been seen as the leading economy in Asia and, despite recent economic stagnation, is still a powerful global economy. These are the nations that have made Asia an economic and political success. They have ensured Asian representation in leading global organisations, such as the G8 (of which Japan is a member) and BRICS (of which China and Indian are both members) and with China poised to become the world’s largest economy at some point in the near future these will continue to be the nations leading the Asia charge. Some reports have argued that China could overtake the USA in 2016, whereas others argue it will be 2019 and the impact of this change will cement China’s role at the very heart of global politics and economics.

But these nations have always eclipsed the Asian Tigers and so economists have never really considered them when developing the concepts of ‘Tiger States’. The Tiger States have always been seen as the nations coming up behind these huge economies and have been more closely focused on building a society alongside their economy. Although China and Japan may be put to one side there are other nations who are developing on the heels of the Tiger States and who warrant the attention of any interested parties. These nations, known as the Tiger Cub Economies, are seen as the new political powers in Asia and the  new markets for investors.

The Tiger Cub’s are Thailand, Malaysia, Indonesia and the Philippines and collectively have shown the shift, within recent times, from the Far East economies to those in South East Asia. All of these nations have followed the successful development of Singapore, just as Hong Kong, South Korea and Taiwan followed the successful development of Japan to become the original Tiger States.

Malaysia, one of the ‘Tiger Cubs’, represents the new wave of economic power in Asia. Its capital, Kuala Lumpur, stands as the glittering centre of economic development, with the Petronas Towers acting as the showpiece for the progress Malaysia has made in recent years. But the towers do not solely represent Malaysia as a new Asian power; they also represent the industries that have driven Malaysian growth. Petronas is the state-owned oil and gas company that has risen to become one of Asia’s most profitable companies and it is this company that has become ubiquitous in Malaysian culture (most recently because of its involvement in Formula 1, sponsoring both the Mercedes GP team and the Malaysia Grand Prix). This company, its towers and the nation who controls it, are all representations of Malaysia’s challenge for pre-dominance in Asia’s economy and like Malaysia the other Tiger Cubs are growing rapidly.

(Above: The Petronas Tower; A Malaysian landmark that symbolises its continued economic rise)

But looking back at the Tiger States themselves we see that although they still sit behind the Asian powerhouses, such as China (they were never going to be rivals to China or Japan’s dominance) they critically stay in front of the Tiger Cub economies. Malaysia may have come a long way but economic power in South East Asia remains firmly in Singapore.

What interests us as academics and as theorists is how these nations cemented their position at the front.

We can split the Tiger States in half to understand their success. Singapore and Hong Kong, being city states, focused on service industries and big business. They became centres of international finance, with stock markets that easily rival the FTSE 100 in London or the Dow Jones in New York. They became the site for business’s Asian and even global headquarters and their understanding of the importance of making international hubs of their respective cities have been critical to their success (there’s a reason that people consistently vote Singapore’s Changi Airport and Hong Kong International as the world’s best airports).

By contrast the larger nations of Taiwan and South Korea have become manufacturing giants. South Korea has easily become the new focus of Asia’s technology boom. Whereas Japanese brands, such as Panasonic, Toyota and Sony, dominated trade in the 1980’s and 90’s they have been surpassed by Korean brands, such as Samsung, HTC, LG and Hyundai which now represents Asian technology globally. Manufacturing has made Seoul, South Korea and Taipei, Taiwan global cities of neon skylines and skyscrapers and their countries destinations for businesses and politicians the world over.

But more than the economics they have used their wealth to bring about real terms social development. They have developed strong education and healthcare systems, have established policies to counteract poverty and they have put many back into the system to improve the quality of life for all their citizens. It is this development of progressive and affluent societies that have marked them out from China’s great economic boom and have ensured that they stay ahead of the competition from the Philippines and Indonesia, who still have a long way to go in the fight against poverty.

These are nations that rose rapidly on the back of the first waves of Asian development and have maintained their position on top of the economic pile, despite competition from new rising powers. They are centres for global trade, symbols of the spread of global capitalism and manufacturing giants that have ensured a global saturation of their brands.

Like the animals they embody they have risen to the top of the economic food chain and although there always might a bigger predator in the region, in the form of China or Japan, Beijing and Tokyo would do well to look behind at the nations stalking their every move.

By Peter Banham

The Territorial Disputes of the South China Sea

The South China Sea has been a hotly contested region for many years, with China, the Philippines, Vietnam, Malaysia, Brunei, Indonesia and Taiwan all claiming territorial control over the region, which although only has a few scattered islands, possesses vast economic resources, including oil. This richness of natural resources is the main motivating factor in the political and diplomatic conflict that is intensifying across East Asia.

Recently tensions over the region have escalated and China is at the heart of the dispute with the country claiming a great swathe of territorial waters, that not only includes the contested Spratly and Parcel Islands but also encroaches on the territorial waters of all the other nations in the region. For the other nations the boundaries of their ocean territories are defined by the 200 nautical mile exclusive economic zone set down by UNCLOS (United Nations Convention on the Law of the Sea), although many have issued counter claims to China, including Vietnam and the Philippines, that may exceed these borders.

China’s claim includes a U-shaped territory that extends southwards from Hainan Island to close to the coast of Brunei and Malaysian Borneo. China and Taiwan, who both see themselves as legitimate leaders of all historically Chinese territory, uphold the same claim that the two island chains were both historically Chinese and therefore today should remain Chinese territory.

However Vietnam has argued that they have historically governed and run the islands and looked after the people living there, and it is only since the Second World War that China has looked to taking control. Thus, they argue, they have a historic precedent and this entitles them to ownership. This conflict came to a head in the 1970’s when Chinese troops seized the Parcel Islands from Vietnam and sent soldiers into the Spratly Islands, resulting in Vietnamese loses on both occasions.

The Philippines, likewise, also claims the islands arguing that they, as the geographically closest country to the Spratly’s, have the right to administration. It is the tension with the Philippines that has caused the most recent clashes between Beijing and the other states in the South China Sea. The Philippines has accused China of bolstering their military presence in the region and recent revelations, that show the Chinese developing a military garrison in Sansha City, Yongxing (Woody Island) in the Parcel Islands, appear to confirm these accusations.

Both sides have sent warships into the region which has left diplomatic relations at a figurative and literal stand-off. This is a move that has put many in the global community on edge as analysts believe that the diplomatic dispute could become a flash point for conflict. With this in mind many external players have sought to intervene; the most prolific being the USA.

However China has reacted aggressively to American involvement believing that their endorsement of the Philippines, with whom they have a historic relationship, and the UN established agreement, symbolizes an attack on Chinese society and politics. But it is not just the USA who are getting involved. ASEAN is one of the most powerful multi-national blocs in the world, but for the first time they failed to issue a joint statement at a meeting and this is largely due to South China Sea debate. Although it sought not to be involved with the dispute, ASEAN chair – Cambodia have received criticism for trying to deflect attention away from the issue due to its close relationship with China. This recent meeting’s failure in South East Asian unity has prompted many regional leaders to intervene and push for a resolution of this dispute.

The future for this region is uncertain as national pride and economic development drive a dispute that may see one of the world’s biggest military powers come into conflict with its neighbours resulting in fighting that is likely to have global consequences.

By Peter Banham