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East Asia Economic Development

East Asia countries experienced a drastic change in both political and economic development after the World War II. These changes further led to the transformation of the society. Some of the East Asian countries that experienced this included China, Japan, and Korea. World War II had devastating effects on the economies of these countries. In turn, this facilitated the need for reviving the collapsed economy. Each country employed the unique ways of accelerating its economic growth. Some countries used economic reforms while others utilized military dictatorship as a means of stimulating economic growth.

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Economic Reforms

The meteoric rise of China over the past half of century is among the most remarkable examples of the impact of opening the economy to the worldwide market. With time, the country has experienced a shift from a major agrarian society to an industrial powerhouse. Through this process, China has witnessed a tremendous increase in wages and productivity that have enabled it to become the second-largest economy in the world. After the founding of the Peoples’ Republic of China in 1949, there was marked a rise in per capita GDP (Murphey 78). This growth represented a five-year plan during which approximately 6000 soviet advisers assisted in the establishment and operation of the 158 large-scale and capital intensive projects facilitated by the Soviet Union. These reforms played a significant role in increasing per capita GDP growth and productivity.

In 1978, there were reforms made by the central committee of the communist party that shifted the country from its unstable condition to a more stable economy. These reforms turned collective farming into a household farming system. Later, a reform on China Foreign Equity Joint Ventures was adopted, which attracted foreign investment to boost regional economies (Murphey 80). The reforms raised the annual GDP from 6% to 9.5% and thus favored urbanization as most workers were attracted to the cities from the countryside due to the better-payed jobs (Murphey 79). Economic reforms have helped China to become the second largest economy in the whole world.



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Open Door Policy

Open door policies were statements of principles introduced by the United States of America in 1899 and 1900 for making sure that countries trading with China had equal privileges. These principle statements also ensured that Chinese administrative and territorial integrity was supported. John Hay, who was the U.S. Secretary of State, issued the statement to Russia, Japan, Italy, France, Germany, and the Great Britain (Murphey 89). The policy was affected when Great Britain, Germany, France, and Russia began scrambling for the sphere of influence in most parts of the coastal China in 1898 (Murphey 90). Each of these countries wanted to monopolize the trade which would have given them more trade privileges. However, there was the fear that the scramble for the trade control would subdivide China into economic segments and later into colonies each controlled by various great powers. The defeat of Japan in World War II in 1945 and the victory of communists in 1949 Chinese civil war brought to an end all foreigners privileges, which rendered the open door policy meaningless.

Economic Zone

Special Economic Zones (SEZ) in China are designated areas where domestic and foreign companies can invest and trade without the same regulations and control from Beijing as other areas of China. The first four SEZS were established in 1980 on the Southeast coast of China (Murphey 93). The Chinese government agreed to reform the set-up of the economy in 1978. The main aim of this policy was to formulate and implement strategies that would open the Chinese trade to the outside world.

SEZs were established to facilitate foreign investment in China and help in boosting the economic growth of the country. The SEZs have contributed immensely to the expansion of the industries and increase in population. The success of these zones encouraged the Chinese government to open 14 large and old cities on the Chinese coast for foreign investment and trade (Murphey 90). These SEZs have helped China to become the best economies in the world.

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What is Japan Inc.?

Japan Inc. is a nickname for the Japan’s corporate world that came around the boom of the 1980s when the business people from the West identified how closely the government of Japan was working with its country’s business sector. The primary aim of Japan Inc. was the main function of the Japan’s Ministry of International Trade and Industry, which assisted in the development of Japan in the post-war years (Murphey 124). Another significant feature of Japan Inc. was the Keiretsu, which contributed to the immense share of the economic activity of Japan. The term Japan Inc. became infamous in the 1980s when most Americans suspected that an alliance of Japanese corporations and bureaucrats was pursuing unfair trade policies (Murphey 130). However, some observers believed that the whole issue of Japan Inc. was just a myth but not a reality and never existed.

The prolonged recession of Japan in the 1990s contributed to Japan Inc. being viewed by most people as a less feared entity. Nevertheless, since the 1990s, Japan has experienced significant changes that have made it less conspicuous in the Japan’s business culture. Throughout the 1970s, Japan’s gross national product (GNP) was the third largest in the world, and it was leading in per capita GNP amongst major industrial nations in 1990 (Murphey 121). Japan’s economic growth of 5% in 1989 helped in the revival of industries such as construction and steel which were sluggish in the mid-1980s and introduced record employment and salaries (Murphey 131). The 1992 recession period affected nearly every aspect of the Japan’s economy especially electronics and automobiles industries. Even the domestic and foreign demand for Japanese electronics was also reduced. Currently, Japan’s economy ranks second after China’s one in the whole world.

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The Military Dictatorship with Economy

The peninsula of Korea had enjoyed peace and unity since the beginning of the 10th century under two dynasties, Joseon and Koryo. However, the country experienced a series of ordeals in the first half of the 20th century. In 1910, Japan invaded Korea but in 1945, it lost the World War II due to which it renounced all its colonies (Murphey 180). Korea was happy to be liberated from Japan, but that did not last for long as it soon found itself under the military rule of two superpowers that are the Soviet Union to the north and the United States to the south. In 1948, the South founded the Republic of Korea (ROK) while the North founded the Democratic Republic of Korea. On 25th June 1950, North Korea attacked South Korea (Murphey 178). The war led to a stalemate and left approximately three million people dead and even more wounded.

After the war, both Koreas tried to rebuild on their own where the socialist North Korea seemed to be doing better at first. It was until the 1960s when North Korea overperformed South Korea in economic growth. The economy of South Korea grew drastically in the 1960s and 70s, and its GDP per capita outdone that of North Korea in the late 1970s (Murphey 167). As the economy grew rapidly, democracy remained sluggish. The military regime of South Korea began using economic growth as an excuse for suppressing the human rights and the freedom of the citizens. The young people in South Korea, who benefited from the economic growth, started fighting for democracy against the military dictatorship in the 1980s and came to achieve it only in 1987. At the moment, the economy of South Korea is the 13th largest in the world being proud of its active civil society (Murphey 176). North Korea lagged behind South Korea regarding economic growth due to its misuse of resources during the communist regime. All the same, both Koreas’ economic growth is at par with those of the most developed countries such as the United States and Europe.

Comparison and contrast of the East Asia countries’ Economic Development

All the three countries, namely China, Japan and Korea, had poor economic growth at first. They all faced challenges that hindered the efforts to improve their economies. World War II had devastating effects on the economic growth of the three countries. Their involvement in the war negatively affected their economic growth as most of their resources, both manmade and natural, were destroyed during the war. After the war, the three countries struggled to revive their dwindling economies each in its own way. All the three countries faced a stiff competition trying to outdo each other in economic development (Murphey 66). China was able to beat all the three countries, and it ranked second worldwide regarding economic growth. If to compare the economic development of the three countries, Japan follows China and Korea being ranked third. Reforms played a significant role in reviving the economies of these countries after the World War II. Chinese economic reforms after the World War II helped it to raise its per capita GDP from 6% to 9.5% in 1989 (Murphey 89). Japan reforms also enhanced its economic growth to 6% in 1989 (Murphey 140). Korea implemented various reforms that rapidly boosted its economic growth.

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The three countries had some differences in the ways they employed different strategies for economic growth. Some of these strategies were unique to a particular country. For example, Chinese realized its rapid economic growth after it implemented the open door policy and special economic zones. These policies encouraged foreign trade and investments in China. Japan, on the other hand, implemented the policy of Japan Inc. thanks to which the business people from the West realized how closely the government of Japan was working with its country’s business sector (Murphey 160). Hence, foreigners, especially from the West, went to trade and invest in Japan. In Korea, the economic growth was mainly based on military dictatorship especially from South Korea and later North Korea (Murphey 203). The leaders of Korea together with colonizers employed dictatorship and militarism as a way of improving the economy of Korea. Whatever means each country used to achieve economic growth, East Asian countries boast of a more stable and sustained economic growth.


Second World War had far-reaching impacts on the economies of the three East Asian countries. Most of their resources were destroyed and others were used to facilitate the war which left these countries’ economies flaccid. Hence, post-war years were marked with a lot of aggressiveness in a bid to revive the flaccid economies. Each country employed various strategies and reforms to accelerate its economic growth. There was a tough competition as each country strived to lead in terms of economic growth. China utilized economic reforms, open door policy, and special economic zones as ways of accelerating its economic growth. Japan mainly used Japan Inc. to enhance its economic growth while Korea employed military dictatorship. Despite the strategies employed by each country for economic growth, they are proud of maintaining a constant flourishing economy. Their economies are among the best in the world as far as per capita GDP is concerned.

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