East Asian Economies, The International Competitiveness Of A Comparative Study

Competitiveness between countries in the world is a long-standing issue. Instead of political and military competitiveness, international economy competitiveness has become the key issue between countries in line with the globalization and the upcoming knowledge economy. Politicians, business leaders and academia have shed a lot of lights on the international competitiveness, in the mean time, researches and studies related to this issue in the economic literature start emerging as well. However, a lack of the common understanding of the conception of international competitiveness has caused a big confusion in economic literature as well as practice. For instance, different evaluating methodology and ranking system have been developed by different institutions in the world for the analysis of international competitiveness; however the results from these analyses are far different. This evidently shows that there is no conclusive situation but complexity of the issue. Furthermore, from the economic theory perspective, the conception of international competitiveness is inadequate of theoretical foundation, although it has been used broadly in practice. The high growth rate of East Asian economies in the last decades is a notable phenomenon in developing modern economics. In particular it is very impressive that some East Asian economies have made a great achievement in enhancing nation's living standards and improving the international competitiveness. This study therefore selected eight East Asian economies as good examples comparatively to investigate the differentiation and generality of international competitiveness between these economies. Meanwhile the variation of the international competitiveness of those economies before and after Asian financial crisis serves a valuable case for a comparative study. This study on the international competitiveness of East Asian economies not only can improve the understanding of the theories of economic growth and international trade, but also can contribute to the practice in enhancing the international competitiveness of the developing countries. The thesis of studying on international competitiveness of East Asian economies is organized by four parts. The first part is a fundamental study, which consists of two chapters, including the aim and implication of the study, the methodology and methods used in the study and the conceptual work of international competitiveness and its theoretical foundation. To study international competitiveness, it is first necessary to consider making the conception of international competitiveness clear. Unfortunately, there is no generally accepted definition in existing literature and neither clear-cutting meaning in practice as well. This study argues that the meaning of the international competitiveness should cover two aspects: one is the performance of international trade between economies, which can be called 'export competitiveness'; the other is the country's capability to increase the national income and living standards, which can be called 'integrated competitiveness'. Export competitiveness is not only one aspect of the international competitiveness but also a most important factor in comprising integrated competitiveness, which has the different impacts on large and small economies. The East Asian economies in this study are all export-oriented economies. The international trade performance has a significant impact on their integrated competitiveness. As a result, the study on the export competitiveness will find a very important implication in practice. By dividing conception of international competitiveness into two sub-conceptions of export competitiveness and integrated competitiveness, this study then can evaluate international competitiveness in the parallel lines. The theoretical foundation of competitiveness study is arguably rooted in the economic growth and international trade theories. This study therefore investigated the multi-relationship between competitiveness, economic growth, international trade and productivity. From chapter 3 to chapter 5 is the second part of the thesis, which evaluated and compared international competitiveness of East Asian economies, including comparison of integrated competitiveness, evaluation of export competitiveness and analysis of comparative and competitive advantage. The methods used in this study for evaluating the integrated competitiveness of East Asian economies mainly adopted from IMD approach, in the mean time, partly from the WEF approach. The difference between these eight East Asian economies in the integrated ranking and individualindex ranking is analyzed and compared at different level. This study shows the key factor in international competitiveness of East Asian economies is the export competitiveness. Thus this study started with comparing the macro indices of international trade as a whole, then, at industry levels, analyzed and compared the export competitiveness by using TC index, RCA index and TP index respectively, finally, at integrated level, examined the evaluation results of export competitiveness of East Asian economies. To study export competitiveness of East Asian economies has to raise the issue of comparative and competitive advantage of Ease Asian economies. This study in the first place differentiated these two conceptions and clarified their relationship, then investigated the comparative and competitive advantage of East Asian economies in detail. Given that, this study finally explored the ways for East Asian economies to upgrade their industries from the strategic development perspective. The third part contains chapter 6, mainly focusing on the factors which could affect the international competitiveness of East Asian economies. To find out which factors possibly affect the international competitiveness of East Asian economies and reasons behind the competitive results is the integrated part of understanding their international competitiveness. This study not only identified most important factors, such as exchange rate, productivity, the role of government, technology and FDI, but also analyzed the impact of each factor on the international competitiveness. Thus the explanation of why there are such differences and fluctuation existed between and in Ease Asian economies can be found out. The last part of the thesis involves chapter 7 and chapter 8, exploring the implication of international competitiveness of East Asian economies including the impact of Asian financial crisis and the change of policy. It is generally believed that Asian financial crisis is the main factor causing the decline of international competitiveness of East Asian economies. However, this study gave the evidences that export competitiveness of East Asian economies has decreased before Asian financial crisis although the integrated competitiveness of East Asian economies dropped dramatically after Asian financial crisis. Therefore this study argues that the decline of integrated competitiveness of East Asian economies is the result of Asian financialcrisis, though the decline of the export competitiveness of East Asian economies is one of the reasons causing Asian financial crisis. Moreover this study pointed out the competitive factors after financial crisis. At last, this study calls for promoting export, upgrading industries, improving the structure of economic growth and enhancing the technology competitiveness to East Asian economies. And some suggestions in making policy to improve the international competitiveness as a whole are proposed in this study.