Wolfgang Klenner (Ed.) Trends of Economic Development in East Asia Essays in Honour of Willy Kraus With Contributions by D.-S. Ahn, R. F. Ash, 1. Chai, Z. Daniel, 1. Domes, M. Eli F. Furstenberg, H. Hax, G. Heiduk, M.-S. Hong Ch. K. Kim, 1. W. Kim, W. Klenner, 1. Komai, Y. Y. Kueh Y. Kuwahara, H. Laumer, D. Lorenz, W. Lutkenhorst H. G. Meissner, S. Messmann, T. Nakamura, S. Okochi 1. S. Prybyla, B. L. Reynolds, R. A. Sca1apino H.-B. Schafer, D. Schneidewind, T. Shin, M. Shinohara D. F. Simon, Y. Suzuki, B. Truas, u. Teichler K. Tominaga, H. Weidner, Y.-L.Wu, H. Yoon Springer-Verlag Berlin Heidelberg New York London Paris Tokyo
Prof. Dr. rer. oec. Wolfgang Klenner Ruhr-Universitiit Bochum Fakultiit fur Ostasienwissenschaften Lehrstuhl Wirtschaft Ostasiens Postfach 102148 4630 Bochum 1, GB 1/159, FRG With 28 Figures ISBN-13: 978-3-642-73909-5 DOl: 10.1007/978-3-642-73907-1 e-isbn-13: 978-3-642-73907-1 Library of Congress Cataloging-in-Publication Data Klenner, Wolfgang. Trends of economic development in EastAsia: essays in honour of Willy Kraus /WolfgangKlenner. p. cm. Includes index. ISBN 0-387-50048-0 (U.S.) 1. East Asia--Economic conditions. 2. Japan--Economic conditions--1945-3. China--Economic conditions--1976-4. Korea (South)--Economic conditions--1960-5. Kraus, Willy. I. Kraus, Willy. II. Title. HC460.5.K58 1989 338.95--dcl9 This work is subject to copyright. All rights are reserved, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in toher ways, and storage in data banks. Duplication of this publication or parts thereof is only permitted under the provisions of the German Copyright Law of September 9, 1965, in its version of June 24, 1985, and a copyright fee must always be paid. Violations fall under the prosecution act of the German Copyright Law. Springer-Verlag Berlin Heidelberg 1989 Softcover reprint of the hardcover 1st edition 1989 The use of registered names, trademarks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. Typesetting: Kiliandruck Griinstadt 214217130-543210
Preface of the Editor The economic success achieved in the last decades in East Asia has brought about a fundamental reorientation in the view, which Western industrial nations cherished about this region. In view of the economic power, dynamism and future outlook in East Asia there can be no longer any doubt in the West that the age is past, when fragmentary knowledge about East Asia could be compensated by economic and technological superiority - and even this was questionable. Accordingly, it is no longer a small number of regional experts and daring businessmen who are concerned with the region, but a broad base of persons from the economy, politics and science. In order to contribute to a better understanding of present events and future developments in the East Asian region and the Pacific area, leading East Asian economists and men of experience in Asian business from Asia, America, West and East Europe have written papers on their research or business fields for this volume. The individual articles deal with problems common to the East Asian region and the Pacific area as well as with specific economic problems of Japan, China and South Korea. The volume is divided into four parts. The articles on supra-national problems are in the section entitled East-Asia and the Pacific Basin. Following this are the sections on Japan, China and Korea. In the first section Yoshio Suzuki, Miyohei Shinohara, Gunther Heiduk, Helmut Laumer, Detlef Lorenz, Joseph Chai, Denis Fred Simon, Yuan-li Wu, Taiwhan Shin, Robert A. Scalapino and Hans-Bernd Schafer examine problems of the integration of Japan, China and South Korea in the Asiatic region and in the world economy. Their papers deal primarily with questions of economic, monetary and developmental policies. These are complemented by articles by Jurgen Domes and Ken'ichi Tominaga on the process of modernization. The following three sections contain articles on national economy, on the development of select economic sectors and on certain specialized problems in Japan, China and South Korea. At the beginning of the section on Japan, Takafusa Nakamura and Yasuo Kuwahara examine Japan's structural and technological development. Following this there are articles by Max Eli, Dieter Schneidewind and Hans-Gunther Meissner on specific problems in the industrial sector. The educational sector is treated by Ulrich Teichler. Questions of industrial relations, of environment protec-
VI Preface of the Editor tion and of administrative reforms, i.e. the privatization of state firms are examined by Friedrich Furstenberg, Helmut Weidner and Shigeo Okochi. The section on China is introduced by Barna Talas with an investigation on structural change. Further problems regarding the national economy with a view to the structural reforms taking place over the last ten years are examined by Janos Kornai, together with Zsuzsa Daniel, Jan Prybyla and Wolfgang Klenner. Yak Yeow Kueh and Herbert Hax have made the problems arising from reforms in the industrial sector a focus of their investigation. Problems of agricultural development are dealt with by Bruce Reynolds and Robert Ash. The development of commercial law, necessary as a support for economic reform, is delineated by Stefan Messmann. The section on Korea consists of a series of papers on Korean economic development. Doo-Soon Ahn turns to national economic problems, while Chuk Kyo Kim deals with industrial policy. The machine building industry and textile sector, most important for economic development and foreign trade, are the focus of an investigation by Wilfried Lutkenhorst and Moon-Shin Hong. Questions of the agricultural sector and the educational sector are examined by Hoseop Yoon and Jae Won Kim. The occasion for the publication of this volume is the seventieth birthday of Willy Kraus on August 25, 1988. Willy Kraus, active in teaching and research at the Ruhr-Universitat Bochum, was especially concerned with questions of development in the East Asian region. This is obvious from his extensive scientific activity on the economies of China, Japan, Korea and the Pacific region. It takes no great talent of prophesy to know that Willy Kraus will continue his scholarly activities. The authors of this volume and his former colleagues at the Ruhr-Universitat Bochum all join together wish him well and continued joy in his work. Wolfgang Klenner
Contents East Asia and the Pacific Basin Japan's Role as a Creditor Nation by Y. Suzuki............................................. 3 High Yen, Overseas Direct Investment, and the Industrial Adjustments in the Asia - Pacific Area by M. Shinohara... 11 Japan's Foreign Economic Relations Trends in the Commodity and Regional Structure by G. Heiduk... 25 Japan's Economic Relations with the Common Market and West Germany by H. Laumer............................................ 53 Intra-Regional Trade and Pacific Cooperation: Problems and Prospects by D. Lorenz............................................. 65 China's GATT Membership: Impact on her Foreign Trade and Consequences for her Trading Partners by J. C. H. Chai.......................................... 75 China's International Science and Technology Relations: A Look at the Critical Issues by D. F. Simon........................................... 93 Taiwan's Open Economy in the Twenty-First Century by Y.-L. Wu... 111 The Pacific Basin Community and Korean Economy by T. Shin............................................... 131 Southeast Asia - Which Path Ahead? by R. A. Scalapino... 135
VIII Contents Economic Growth and Poverty in East Asia and India by H.-B. Schafer.......................................... 147 Democracy and Modernization in China by J. Domes... 155 Some Comparative Observations on Modernization of Social Structure Between China and Japan by K. Tominaga.......... 171 Japan Structural Changes in Japan's Industries in the Past and Future by T. Nakamura...... 189 Japan's Technological Policy and Technological Development by Y. Kuwahara......... 201 Industrial Groupings and Multinational Trading Corporations in Japan by M. Eli........... 211 Structure and Organization of Big Business in Japan and its Trends Towards Internationalization by D. Schneidewind....................................... 227 Exportmarketing in Japan by H. G. Meissner........................................ 251 Education and Economic Development in Japan - a Controversial Topic by U. Teichler............................................ 263 Industrial Relations in Japan - Organizational Patterns and Development Trends by F. Furstenberg......................................... 275 Environment Protection in Japan: Development and Prospects by H. Weidner... 287 The Administrative Reform in Japan by S. Okochi............................................. 301
Contents IX China Structural Changes in China's Economic Development in the Past and in Future by B. Talas............................................... 315 The Chinese Economic Reform - as Seen by Hungarian Economists by J. Kornai and Z. Daniel................................. 337 On Some Questions Concerning Price Reforms in the People's Republic of China by J. S. Prybyla... 353 Development of Monetary and Fiscal Policy in the People's Republic of China - Problems of Economic Policy in a Changing Economic System by W. Klenner............................................ 371 Bureaucratization and Economic Reform in Chinese Industry by Y. Y. Kueh............... 381 Ownership and Management in the Chinese Firm - The Agency Problem by H. Hax............................................... 393 Agricultural Reform, Rural Savings and Growth in China by B. L. Reynolds......................................... 403 Prospects for the Grain Sector: A Chinese Perspective by R.:F.Ash... 419 Economic Legislation in China by S. Messmann.......................................... 433 Korea The New Paradigm of the Economic Policy for the "Second Take-off" of the Korean Economy by D.-S. Ahn............................................. 447 Evolution of Industrial Policy in Korea by Ch. K. Kim... 461
x Contents Industrial Development and Industrial Policy in the Republic of Korea - with Special Emphasis on Engineering Industries by W. Ltitkenhorst........................................ 475 The Restructuring Experience of the Korean Textile Industry by M.-S. Hong... 493 Growing Agricultural Protectionism and its Causes in Korea by H. Yoon........................................... 513 The Role of Education in Economic Development - The Korean Experience by 1. W. Kim............................................. 527 Publications of Dr. Willy Kraus............................. 543 List of Authors........................................... 551 Sponsors................................................ 554