| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

Home 
 
 News
 Irish
 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 International
 Property
 Innovation
 
 Analysis/Comment
 
 Asia Economy

RSS FEED


How to use our RSS feed

Follow Finfacts on Twitter

 
Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.

Welcome

Finfacts is Ireland's leading business information site and you are in its business news section.

Links

Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News

Newspapers

Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News

 

Feedback

 

Content Management by interactivetools.com.

Asia Economy Last Updated: Aug 22, 2013 - 9:03 AM


Path to prosperity in Asia remains via manufacturing
By Finfacts Team
Aug 21, 2013 - 9:04 AM

Email this article
 Printer friendly page

The path to prosperity in Asia remains via manufacturing despite gross domestic product (GDP) shares, which show a dominant service region. The service sector is however heterogeneous with both traditional, low productivity services and modern, high-productivity services. In many Asian economies, structural transformation appears as a shift from agriculture into low-productivity service subsectors.

In its flagship annual statistics report, 'Key Indicators for Asia and the Pacific 2013,' published Wednesday, the Manila-based Asian Development Bank says history suggests that manufacturing is important and that industrialization has been nearly essential for an economy to achieve high income levels. No country has achieved high-income status without its manufacturing sectors reaching at least an 18% share of total employment. Modern industrial and service economies have manufacturing at their core. "We estimate that an economy where the shares of manufacturing in total employment and output are at least 18% has a 42% probability of achieving high income levels, but the probability of an economy with a small manufacturing sector (in both output and employment) achieving high-income status is less than 5%," the ADB says.

Other factors are also important. Results also indicate that a country that industrializes in output and (i) has 17 kilometers of road per 1,000 persons has a 44.5% chance of being high income, (ii) has liquid liabilities representing 75% of GDP has a 43.5% chance of being high income, (iii) where workers have 9 years of average schooling has a probability of 48.5% of being a high income, (iv) with a share of high-tech manufacturing output representing 52% of total manufacturing GDP has a 75% chance of being high-income, and (v) with a share of high-tech manufacturing employment representing 49% of total manufacturing employment has also a 75% chance of being high-income.

The report notes that one group of economies—Hong Kong, China; Japan; the Republic of Korea; Singapore; and Taiwan—rapidly industrialized to become high income countries, while another group of economies, including China, Malaysia, and Thailand, are transforming more slowly.

Other developing Asian nations, such as Bangladesh, India, Pakistan or the Philippines, are changing even more slowly, have created few manufacturing jobs, and are shifting from agriculture into services.

“Right now, as services boom in the region, it’s tempting to shun industrialization, but it will be a serious mistake if a country wants to be prosperous,” Changyong Rhee, ADB’s chief economist said.

Industry does not lead the way in Asia, the report noted. Services are the largest share of developing Asia’s output and agriculture remains the largest employer, providing an income for 700 million people.

Regional diversity means Asia’s economies require different policy priorities to promote transformation. Modernizing the agricultural sector is a key task in developing Asia, in particular for low income countries.

For middle income economies heavily dependent on labor-intensive sectors or currently bypassing industrialization, the focus should be on upgrading their industrial base. For these nations, good quality education is essential for industrial diversification and reducing the path-dependency nature of structural transformation.

For small island economies, industrialization may not be cost effective, and the future lies in becoming competitive in certain service sector niche markets.

'Key Indicators for Asia and the Pacific 2013' also charts regional progress in achieving the Millennium Development Goals (MDGs). It notes that two years before the MDG deadline in 2015, most of the region has made significant progress in reducing poverty, improving access to universal primary education, and promoting gender equity and women's empowerment.

Check out our subscription service, Finfacts Premium , at a low annual charge of €25

Related Articles
Related Articles


© Copyright 2011 by Finfacts.com

Top of Page

Asia Economy
Latest Headlines
IMF defers renminbi reserve decision; Devaluations losing firepower
Japan's trade deficit widens and GDP falls despite 33% yen devaluation
China's exports slide in July; Fx reserves dip $42.5bn in month
Chinese manufacturing PMI falls for 5th straight month in July; Japan at 5-month high
China's overseas investments to surge; Ireland got €99m of €46bn invested in EU in 2000-2014
China to overtake US economy in 2026; Income per capita will be 50% of US in 2050
Manufacturing activity in China and Japan contracted in June
China's manufacturing contracted for third straight month in May; Japan in slight rise
Asia accounts for 40% of global output, two-thirds of global growth
China's exports unexpectedly fell in April 2015 after March dip
China's growth in 2015 at slowest since early 2009
China's 2015 foreign trade continues to slide
Singapore remains world’s top location for business on 50th anniversary of independence
China's manufacturing activity fell to a 11-month low in March
China in surprise rate cut to boost sagging economy
Chinese Lunar New Year: Year of the Wood Goat begins this week
China’s manufacturing shrunk in January; Regional rise except Indonesia
Profits of Chinese industrial businesses plunged in 2014
China's growth in 2014 fell to a 24-year low
Services activity in China, Japan and India in moderate rises in December
China’s manufacturing industry remains competitive despite rising wages
China revises 2013 GDP up 3.4% to 56.5% of US economy size
China's manufacturing contracts in December; Japan's grows
China's imports slide in November; Emerging markets slow
Manufacturing PMI stalled in China in November; Fell in Korea, Indonesia , grew in India
China's manufacturing output contracted in November; Japan's accelerated
Ireland not among top 67 destinations for Chinese outbound FDI in 2014
Japan fell into recession in third quarter of 2014
Services slowed in China, contracted in Japan and stagnated in India in October
Manufacturing in South Korea/ Indonesia contracted in October; India in slight rise
Two Chinese manufacturing reports show trading near stagnation levels
Bank of Japan raises money printing target; Spending and wages plunge
China's manufacturing stagnates, Japan in moderate growth
China’s economy in third quarter grew at slowest pace in five years
Chinese exports jump in September; "Sadness will return soon"
World Bank cuts growth forecasts for developing East Asia including China
Japanese business confidence slightly improves; Manufacturing sector weak
Developing Asia remains fastest-growing region in world in 2014
Chinese manufacturing PMI rose slightly in September
Japan reports 26th straight monthly trade deficit; Public debt tops ¥1,000tn