Manila: Hong Kong, South Korea, Singapore and Taiwan are maturing toward post-industrial status as manufacturing investments in Asia move to China, said an Asian Development Bank report that was released on 14September.
The combined share of the quartet of “newly industrialized economies” (NIEs) along with China, Indonesia, Malaysia, the Philippines and Thailand in global manufacturing output has more than doubled to almost 14% between the 1980s and 2004.
However NIEs, also known as Asian “tigers” and especially Hong Kong and Taiwan, have undergone severe deindustrialization as manufacturing has lost significant weight in total output between the 1970s and 2000-2004.
The NIEs are now going through a process similar to those of the Organization for Economic Cooperation and Development (OECD), the result of transferring production facilities to China, it said.
Nevertheless, other than Singapore, South Korea and Taiwan, none of the other developing Asian economies had a share of employment in manufacturing as high as that of the OECD average, said the report.
In terms of labour productivity, “there is still a large differential between most developing Asian economies and the OECD.”
Also, it appears many of these economies “have industrialized at low levels of productivity due to the bias toward low-productivity industries which in turn accounted for most of the increase in employment, it added.
Nevertheless, the production structure has become slightly more diversified with electrical and non-electrical machinery and transport equipment now accounting for 34% of developing Asia’s manufacturing and food and beverages, textiles, apparel, leather and footwear accounting for 22%.
In the 1970s, the latter accounted for 39% of the total and the former accounted for just 17%. South Korea, Malaysia, Singapore and Taiwan shifted their manufacturing output to more technology and scale-intensive sub-sectors, leading to faster growth.
In China and India, the shift “is taking place more slowly, while in most other Asian countries the evidence is lacking.” By 2000-03, developing Asia’s share of manufacturing involving medium or strong economies of scale and medium or strong technology has risen to 11.33% from 2.9% in the 1970s, the ADB said.
The OECD countries still accounted for 82.68% down from 90.90%. The region’s share of manufacturing output in sectors involving low economies of scale and low technology stood at 12.75% early in this decade, up from 4.86% in the 1970s.