Clusters and Innovation: Beijing's Hi-technology Industry Cluster and Guangzhou's Automobile Industry Cluster

This paper proposes a flowchart approach to the automobile industry cluster policy and the hi-technology industry cluster policy to prioritize policy measures. First, in the automobile industry cluster, suppliers of parts and components to anchor firms such as Honda, Nissan and Toyota of Japanese assembly makers in Guangzhou, China, can innovate partly because the suppliers have become independent of their anchor firms in the Japanese Keiretsu system. Second, concerning the hi-technology industry clustering in Beijing, we show that the existence of universities is a precondition for the industrial cluster policy and that the leadership of the Zhongguancun Science Park Management Committee of Beijing Municipality is crucial to the success of the industrial cluster policy. The flowchart for the hi-technology industry is different from the one for the automobile industry cluster.

Trade, Foreign Investment and Myanmar's Economic Development during the Transition to an Open Economy

Throughout the 1990s and up to 2005, the adoption of an open-door policy substantially increased the volume of Myanmar's external trade. Imports grew more rapidly than exports in the 1990s owing to the release of pent-up consumer demand during the transition to a market economy. Accordingly, trade deficits expanded. Confronted by a shortage of foreign currency, the government after the late 1990s resorted to rigid controls over the private sector's trade activities. Despite this tightening of policy, Myanmar's external sector has improved since 2000 largely because of the emergence of new export commodities, namely garments and natural gas. Foreign direct investments in Myanmar significantly contributed to the exploration and development of new gas fields. As trade volume grew, Myanmar strengthened its trade relations with neighboring countries such as China, Thailand and India. Although the development of external trade and foreign investment inflows exerted a considerable impact on the Myanmar economy, the external sector has not yet begun to function as a vigorous engine for broad-based and sustainable development.

East Asia's Economic Development cum Trade "Divergence"

This paper addresses some salient features of how some of "successful" East Asian economies have been faring in terms of enhancing their export competitiveness. That export becomes more divergent in terms of its unit price as more technology-enhancing economic activity is undertaken within an economy, is the primary message that this study conveys. This is indeed what Schumpeter had addressed in conjunction with his "creative destruction" thesis. From this perspective, East Asia's export-led industrialization has been attained through a particular policy focus upon high "trade divergence" sectors underpinned by a generally high level of manufacturing flexibility. The experience of Malaysia's development serves as the strong case in point. As an East Asia-wide FTA is expected to facilitate "divergent" export-led industrialization through enhanced knowledge interaction, this dynamic or "divergent" impact that knowledge creation could exert should come to the fore of relevant policy arguments, together with static consideration of trade creation and diversion. A formal statistical test of the "divergence hypothesis" above is called for with a view to building upon this preliminary study.

The Flowchart Model of Cluster Policy: The Automobile Industry Cluster in China

This paper proposes a general model of the flowchart approach to industrial cluster policy and applies this model to Guangzhou's automobile industry cluster. The flowchart approach to industrial cluster policy is an action plan for prioritizing policy measures in a time-ordered series. We reached the following two conclusions. First,we clarified the effects of Honda, Nissan, and Toyota on agglomeration in Guangzhou's automobile industry cluster. Second, we established that local governments play a crucial role in successful industrial cluster policy, and that the mayor of the local government should be offered incentives in order to target industrial clustering and implement cluster policy.

A Flowchart Approach to Malaysia's Automobile Industry Cluster Policy

In this paper, we apply a flowchart approach to investigate Malaysia's automobile cluster policy. We investigate whether the industrial cluster policy has been successful or not, suggest policy prescriptions, and propose a way to prioritize policy measures. Our flowchart approach leads to the following three policy prescriptions: (1) Malaysian firms should establish sites for exporting compact cars with automatic transmissions; (2) actors in the public, semi-public and private sector should work to upgrade skilled labor; and (3) the central government should promote liberalization and deregulation to attract foreign firms into the supporting industries.

Economic development capitalizing on brand agriculture : turning development strategy on its head

This paper explores the possibilities of two unique Japanese concepts - the One Village One Product Movement (OVOP) and Michino Eki (or Roadside Stations) - as potential tools for bridging the gap between cities and rural areas through community-driven development. From the viewpoint of spatial economics and endogenous growth theory, this paper considers both OVOP and Michino Eki as rural development strategies of a broader nature based on "brand agriculture." Here, brand agriculture represents a general strategy for community-based rural development that identifies, cultivates and fully utilizes local resources for the development of products or services unique to a certain "village." Selected examples of OVOP and Michino Eki from Japan and developing countries are introduced.

Thailand's Economic Cooperation with Neighboring Countries and Its Effects on Economic Development within Thailand

Thailand's economic cooperation with neighboring countries, including not only trade and investment but also economic assistance, is tied inseparably to regional development within Thailand. Assistance to develop infrastructure along economic corridors, for example, promotes Thai regional development. This study examines the trade and investment relationships between Thailand and its neighboring countries, as well as related economic policies of Thailand. The study also examines the type of economic assistance being extended, and the resulting regional development taking place. And lastly, the study considers policies for further cooperation by Thailand and the implications this has for Japanese economic cooperation.

Diverging Development Paths of the Electronics Industry in Korea and Taiwan

This paper examines the process and mechanism of economic development in the Republic of Korea and Taiwan through a comparative analysis of the electronics industry in each country. The paper will show that in its initial stage of development, the electronics industry in both economies had the same type of dual structure: a domestic demand sector based on the protected domestic market, and an export sector intended to capitalize on low-wage labor for the international market. However, this dual structure in the two economies faded away after the mid-1970s as their respective indigenous export-oriented enterprises began to develop. But the primary industrial players in each economy were very different. In Korea they were comprehensive electronics manufacturers affiliated with chaebols, and in Taiwan they were small and medium-size enterprises. Differences in the two economies' development mechanisms have brought about this divergence in development paths. In Korea this mechanism has been characterized by the government's positive role and the chaebol's readiness to react to the government's leadership. In Taiwan the development mechanism has been based on the private sector independent from the government. As an extension of such diverged development paths, ICs and personal computers showed spectacular growth in Korea and Taiwan after the 1980s. The development of ICs in Korea was primarily the result of a decisive role played by the chaebol's sizable financial resources, while the competitiveness in personal computers largely reflected the agility and flexibility of Taiwanese small and medium-size enterprises.

Myanmar's Economic Relations with China: Can China Support the Myanmar Economy?

Against the background of closer diplomatic, political and security ties between Myanmar and China since 1988, their economic relations have also grown stronger throughout the 1990s and up to 2005. China is now a major supplier of consumer and capital goods to Myanmar, in particular through border trade. China also provides a large amount of economic cooperation in the areas of infrastructure, energy and state-owned economic enterprises. Nevertheless, Myanmar’s trade with China has failed to have a substantial impact on its broad-based economic and industrial development. China’s economic cooperation apparently supports the present regime, but its effects on the whole economy will be limited with an unfavorable macroeconomic environment and distorted incentives structure. As a conclusion, strengthened economic ties with China will be instrumental in regime survival, but will not be a powerful force affecting the process of economic development in Myanmar.

Infrastructure development and economic growth in China

China is the fastest growing country in the world for last few decades and one of the defining features of China's growth has been investment-led growth. China's sustained high economic growth and increased competitiveness in manufacturing has been underpinned by a massive development of physical infrastructure. In this context, we investigate the role of infrastructure in promoting economic growth in China for the period 1975 to 2007. Overall, the results reveal that infrastructure stock, labour force, public and private investments have played an important role in economic growth in China. More importantly, we find that Infrastructure development in China has significant positive contribution to growth than both private and public investment. Further, there is unidirectional causality from infrastructure development to output growth justifying China's high spending on infrastructure development since the early nineties. The experience from China suggests that it is necessary to design an economic policy that improves the physical infrastructure as well as human capital formation for sustainable economic growth in developing countries.

Political economy of low sulfurization and air pollution control policy in Japan : SOx emission reduction by fuel conversion

In the early stages of the development of Japan’s environmental policy, sulfur oxide (SOx) emissions, which seriously damage health, was the most important air pollution problem. In the second half of the 1960s and the first half of the 1970s, the measures against SOx emissions progressed quickly, and these emissions were reduced drastically. The most important factor of the reduction was the conversion to a low-sulfur fuel for large-scale fuel users, such as the electric power industry. However, industries started conversion to low-sulfur fuel not due to environmental concerns, but simply to reduce costs. Furthermore, the interaction among the various interests of the electric power industry, oil refineries, the central government, local governments, and citizens over the energy and environmental policies led to the measures against SOx emissions by fuel conversion.