China and Japan in East Asian economic development Term Paper

China and Japan in East Asian economic development - Term Paper Example In 1960, the GDP of ASEAN + 3 was approximately 40% of US GDP, with Japan contributing more than 80% of total East Asian GDP, followed by China (Mainland only), with not quite 8%. In 2000, the GDP of ASEAN + 3 was approximately 75% of US GDP, with Japan contributing more than 60% of total GDP, followed by China (Mainland only), which contributed somewhat more than 15%. Japan also leads in GDP per capita among East Asian economies, with almost US$50,000 in 2000 (at market exchange rates), followed by Singapore at US$30,000. In contrast, Mainland China’s GDP per capita was less than US$900 in 2000 (Lau, 2003, p.4) Even though politically and socially two entirely different countries, (China is a communist country whereas Japan is a democratic country), China and Japan play a pivotal role in controlling Asian economy in general and East Asian economy in particular. Even though India, South Korea etc are some other prominent economies in Asia, no other country seems to be as effec tive as China or Japan as far as the influence in Asian economy is concerned. Both China and Japan adopt different methods and philosophies for attaining economic growth. â€Å"Japan is all about the way of doing things. China is all about finding a way to do things† (The difference between China and Japan, 2007). It is often said that Japan gives more priority to quality whereas China gives more priority to quantity because of the superior quality of Japanese products and the bulk quantities of products produced by China. In other words, China tries to reap more profits with the help of bulk production and cheaper prices whereas Japan tries to grow with the help of superior products of higher prices. In the consumer world, Japan stands as a sign of quality whereas China stands as a sign of quantity. It should be noted that some of the reputed brands in global market have its origin in Japan. For example, Sony, Mitsubishi, Toyota, Honda, etc are some of the popular Japanese b rands not only in Asia, but also all over the world. At the same time Chinese products are popular for cheaper prices rather than superior quality. It is difficult for Japanese or American companies to compete with Chinese products in global markets as far as prices are concerned. In short, Japan and China play a vital role in controlling East Asian economy. This paper analyses the role of Japan and China is East Asian economic development. Role of Japan and China in East Asian economic development Japan achieved an average annual rate of growth of real GDP in excess of 10 percent during the decade of 1960-1970 (in fact, between 1955 and 1975). However, due to the two oil shocks, the average annual rates of growth in the two subsequent decades declined significantly to less than 5%. And since 1990 the average annual rate of growth has been below 2%. Despite the considerable slowdown in the Japanese economy during the past decade, China was able to achieve an average annual rate of g rowth of almost 10% over the past two decades, a performance comparable to that of Japan between 1955 and 1972) (Lau, 2003, p.7) Japan was the leading player in Asia until couple of decades before. They were instrumental in shaping the economies of many other Asian countries. They provided lavish grants and financial aids to many of the other Asian counties like South Korea, India, Vietnam, Philippines etc. In India a huge drinking water supply project is still functioning. Moreover, in the 1970’s Japan provided a Yen loan to South Koreas first subway project which helped South Korea immensely in increasing its transportation facilities. â€Å"In the subway network system project, new model subway trains, manufactured under a joint venture between Korean and foreign companies, were introduced. In the course of the joint venture, the Korean manufacturer of the subway trains learned new technology†(East Asia’s economic developm