On September 7th 2013, the International Olympic Committee (IOC) announced to the world that Tokyo would be the host for the 2020 Olympic Games, much to the sorrow of Madrid and Istanbul. It certainly wasn’t the most competitive candidate pool in recent years; Spain was in severe economic recession and boasted a 27% unemployment rate, while Istanbul’s reputation was tarnished somewhat due to a mixture of anti-government protests back in June, the bloody Syrian civil war, as well as a string of doping scandals among Turkish athletes.
Paul Krugman wrote a famous paper in the 1990s outlining the myths surrounding the Asian miracle of the 20th century. Rather than it being a ‘miracle’, he presented a less dazzling critique of Asia’s economic success. He proposed that it was a combination of stringent government policy and the further adoption of free trade that was key to sustaining economic growth in East Asia. Most of this growth occurred in eight economies, collectively referred to as the High Performing Asian Economies (HPAEs) – Japan, Hong Kong, the Republic of Korea, Singapore, Taiwan, and the newly industrializing Indonesia, Malaysia, and Thailand . The relationship between public policy and economic growth is now more important than ever, and in light of the continuing economic crisis in Europe, there are a number of lessons to be learnt from the success of the HPAEs.
Last year on December 26th, Shinzo Abe assumed office as Japan’s current Prime Minister and immediately began fulfilling his electoral campaign promises of bringing sweeping economic reform and output growth to the world’s third largest economy. After suffering decades of lacklustre output and many failed attempts to induce growth, Abe’s policies, both currently implemented and in the pipeline, are the biggest things to hit Japan since Godzilla itself.
Recently China’s president Xi Jinping was quoted in saying that China’s GDP growth will be subdued in the foreseeable future, relative to the rapid growth in the past decade. China’s official newspaper Xinhua has put the internal target at 7.5% p.a. for 2013 from a 7.8% p.a. actual figure achieved in 2012, and many are undoubtedly aware that this is a 13-year record low. Exactly how much has the world’s second largest economy grown by and how has China done it?