Glamor Economics

Chapter 193

Chapter 24 Section 4 The key driving force for the four tigers to take off - export substitution

In the 20s, the East Asian economy rose rapidly.Facing the economic rise of East Asia, people have shown great interest.The research on the East Asian economic miracle has naturally become the research focus of many economists.There is a passage in "From Myth to Reality", which studies the economic development of East Asia, from which we can easily find that "export substitution" is the key driving force for the four tigers' economic take-off.

"Since the 20s, the four Asian tigers have generally turned to an export-oriented economic development strategy. The specific way to implement this strategy is to realize the upgrading and outward-looking of the industrial structure. During this period, they broke the economic development strategy. According to the traditional view on balanced development in scientific theory, limited material resources, financial resources and human resources are concentrated and tilted to those departments with comparative advantages.

"For example, China's Taiwan's leading export industries are textiles and clothing, rubber products, chemicals, electrical appliances and electrical materials industries, etc.; South Korea's leading industries are fibers, toys, plywood, groceries and radios, etc.; Singapore's export-led The industries are food, garments, cigarettes, furniture and textiles, etc.; the leading industries in Hong Kong, China are mainly concentrated in the four major industries of garments, electronics, plastics and watches. These strategically important leading industrial sectors are the comprehensive research of the Four Asian Tigers A wise choice made after analyzing external opportunities and internal advantages.

"From the perspective of external opportunities, the 60s was the most prominent period when Western developed capitalist countries generally entered the golden age. The rapid growth of the national economy, the rapid expansion of international trade, and the rapid spread of the achievements of the scientific and technological revolution made the industries of capitalist countries A major structural adjustment has taken place. The main trend is that developed countries such as the United States and Japan further strengthen and develop capital-intensive and technology-intensive industries, and gradually transfer labor-intensive industries such as textiles, plastics, clocks, toys, etc. developing countries and regions.

"From the perspective of internal advantages, after import substitution from the 50s to the early 60s, the light and textile industries of the four Asian tigers have developed to varying degrees, and thus have a more solid material foundation than other industries."

Through this material, we can find that export substitution is the key driving force for the four Asian tigers to take off.Export substitution, also known as export substitution industrialization policy or export-oriented industrialization policy, is the product of export-oriented economic development strategy.It refers to the policy that a country adopts various measures to expand exports, develop export industries, gradually replace the export of primary products with the export of light industrial products, and replace the export of light industrial products with the export of heavy and chemical industrial products, so as to drive economic development and realize industrialization.

The core idea of ​​the export substitution strategy is to make the country's industrial production face the world market, and replace the export of primary products with the export of finished products.According to the principle of comparative advantage in international trade, by expanding the export of products with comparative advantage, it can improve the allocation of domestic resources, obtain trade benefits and promote the development of the domestic economy.

This kind of development model that uses export encouragement as the economic driving force puts domestic products in the environment of international competition, and its advantages are quite significant.Most countries that develop in this way have achieved high-speed economic growth.Since the 20s, almost all countries and regions with high-speed economic growth are countries and regions where the proportion of exports to GDP has been rising, including China, the four Asian tigers, and ASEAN.This is because the export substitution strategy has played a positive role.

Choosing an export-oriented strategy can make full use of foreign resources and combine them with the country's absolute advantaged labor resources to produce and export products with a country's comparative advantage, so as to ease the country's foreign exchange pressure; it can save labor in the international division of labor, Give full play to its own comparative advantages, promote the optimization and upgrading of the domestic industrial structure in the global industrial structure adjustment, and obtain the economies of scale generated by the division of labor; through foreign trade, exchange what is needed, so that the residents of the country can enjoy more economic welfare and improve their living standards; through the development of external markets, it can drive the development of related domestic industries and departments, which not only finds a way out for domestic surplus products or idle production resources, but also expands employment.

The implementation process of the export substitution strategy is actually a process of using the comparative advantages of the country to develop related industries and upgrading the industrial structure in time according to the changes of the comparative advantages.In the initial stage, developing countries can take advantage of their low labor costs and increase foreign exchange earnings by expanding the export of labor-intensive products, driving economic growth and increasing employment.With the development of the economy and the continuous improvement of income levels, the cost of labor will rise and the advantages of labor will gradually lose. At this time, industrial policies should be adjusted in time to encourage the development of capital and technology-intensive industries.

The implementation of the export substitution strategy also requires certain policies:

One is to give preferential policies to export enterprises, such as tax reduction and exemption, low-interest loans, and increased subsidies.

The second is to implement tax reduction and exemption and relax import quotas for capital goods, intermediate products and technical patents that export enterprises need to import from abroad.

The third is to depreciate the domestic currency to reduce the price of domestic export commodities in foreign currency and increase the competitiveness of enterprises and products in the international market.

The implementation of this strategy can maintain a high economic growth rate by maintaining a high export growth rate, so that a country's economy can be integrated into the world economic circle to a large extent.As the pressure of international competition has formed effective incentives for domestic enterprises, domestic enterprises must continuously improve production efficiency, improve economic management, develop new technologies, and train employees, so that countries that implement export substitution strategies can survive in the fierce international competition. And development.

[links to related words]

Labor-intensive industry is an industry in which the proportion of labor input is higher than that of other production factors among the factors of production that must be input to produce a certain output.Such as light textile industry, handicraft industry and service industry and other industries.These industries occupy less capital, have low-tech equipment, and accommodate more labor.With the development of social productivity and the wide application of science and technology in production, labor-intensive industries will gradually transform into capital-intensive industries or knowledge-intensive industries, or form new labor-intensive industries based on new material technologies.

Technology-intensive industries are also called knowledge-intensive industries.Production departments and service departments that require complex, advanced and cutting-edge science and technology to work.Its technology intensity is often directly proportional to the degree of mechanization and automation of various industries, departments or enterprises, and inversely proportional to the number of manual operators used by various industries, departments or enterprises.

Capital-intensive industries refer to industries and departments that require more capital investment, also known as capital-intensive industries.Such as metallurgical industry, petroleum industry, machinery manufacturing and other heavy industries.It is characterized by more technical equipment, large investment, less labor capacity, slower capital turnover, and slower investment results.The product output of a capital-intensive industry is directly proportional to the amount of investment, and inversely proportional to the amount of labor required by the same industry.Therefore, any product with a large proportion of materialized labor consumption and a small proportion of living labor consumption in the product cost is generally called a capital-intensive product.The development of capital-intensive industries requires a lot of technical equipment and funds.

Export-oriented strategy, also known as export substitution strategy, means that the country adopts various measures to promote the development of export-oriented industrial sectors, replace traditional primary product exports with non-traditional export products, expand foreign trade, and diversify export products to promote development of industry and the economy as a whole.

(End of this chapter)