Sat, Sep 15, 2007 - Page 12 News List

Asian tigers near post-industrial status, says ADB

AFP , MANILA

Taiwan, Hong Kong, South Korea and Singapore are maturing toward post-industrial status as manufacturing investments in Asia move to China, an Asian Development Bank (ADB) report said yesterday.

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 percent between the 1980s and 2004, it said.

However, the NIEs, especially Taiwan and Hong Kong, have "undergone severe deindustrialization as manufacturing has lost significant weight in total output between the 1970s and 2000-2004," the report said.

The NIEs, also known as Asian "tigers," are now going through a process similar to those of the Organization for Economic Cooperation and Development (OECD) nations, "the result of transferring production facilities" to China, it said.

Still, other than Taiwan, Singapore and South Korea, none of the developing Asian economies had a share of employment in manufacturing as high as that of the OECD average, the report said.

In terms of labor productivity, "there is still a large differential between most developing Asian economies and the OECD," it said.

Many of these economies apparently "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 said.

Nevertheless, the production structure has become slightly more diversified with electrical and non-electrical machinery and transport equipment now accounting for 34 percent of developing Asia's manufacturing and food and beverages, textiles, apparel, leather and footwear accounting for 22 percent.

In the 1970s, the latter accounted for 39 percent of the total and the former accounted for just 17 percent.

Taiwan, South Korea, Malaysia and Singapore have all 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 to 2003, developing Asia's share of manufacturing involving medium or strong economies of scale and medium or strong technology has risen to 11.3 percent from 2.9 percent in the 1970s, the ADB said.

The OECD countries still accounted for 82.7 percent, down from 90.9 percent.

The region's share of manufacturing output in sectors involving low economies of scale and low technology stood at 12.8 percent early in this decade, up from 4.9 percent in the 1970s.

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