Economic Growth in East Asia

Growth of Merchandise Exports 1980-93

Data and Source

East Asian growth has been closely associated with a sharp rise in exports. Since 1970 export growth in this region as a whole has been far greater than in the rest of the developing world. Japan, which had an export growth rate of 9.2% in 1970-80, was the first to have rapidly growing exports. As shown above, other East Asian economies have subsequently achieved very high export growth rates in the 1980s.

The composition of East Asian exports has changed significantly towards manufactures over the period of rapid export growth. Japan is now the largest exporter of manufactured goods, catering to 12% of the world market. Since 1965, Singapore, Hong Kong, Republic of Korea and Taiwan/China have increased their combined share of world manufactured exports from 1.5% to 8%. More than 65% of Japanese exports currently consist of heavy machinery and transport equipment. Light manufactures compose similar shares of exports from Hong Kong and Republic of Korea. Thailand, Indonesia and Malaysia have, in the recent years, started to move away from exporting primary commodities and towards exporting manufactured goods.

The rapid growth of manufactured exports has resulted in increasing integration of East Asian economies into the world economy. In 1990 the export to GDP ratio ranged from approximately 150% for Hong Kong and Singapore to 24% for Indonesia to 10% for Japan. For comparison, in the same year the ratio for Germany was 27% and for USA 7%. Since net capital inflows are typically no more than a few percent of GDP, rising export ratios are associated with rising import ratios. Thus the rapid rise in exports in the high performance East Asian economies reflects a more general process of integration into the world economy.

Economic Growth in East Asia