How Asia Works

May 20, 2013
Americans often imagine that an “economic miracle” is taking place across all of Asia, a region of vast internal differences and contradictions. The truth is more complex and tentative. In his latest book, journalist Studwell (The China Dream), founder of the China Economic Quarterly, surveys nine nations: China, Indonesia, Japan, Malaysia, the Philippines, South Korea, Taiwan, Thailand, and Vietnam. At a time when ideas of “geographic pre-destination” and “‘nothing-can-be-done’” developmental thinking abound, Studwell reports on the striking differences between these nations. Taiwan, for one, “gives us a powerful reminder that geography is not destiny in development.” The book first reviews land policies, then considers basic manufacturing, including autos, cement, fertilizer, steel, and textiles. Studwell writes gripping country-by-country profiles of companies that together provide ample evidence of the brutality with which economic development is conducted. Dwelling on Hyundai, Studwell admires the “extraordinary success of Korea’s manufacturing development policy” and the prospects for trade there. He concludes with a lucid review of China’s confusing economic policies, arguing that the country remains mired in government inefficiencies and slow institutional development. Readers will find Studwell’s informative and balanced report eye-opening. Agent: Claire Alexander, Aiken Alexander Associates Ltd.

June 1, 2013
Why have some East Asian countries been more successful in their economic development than others? Studwell (Asian Godfathers, 2008) argues that the answer comes down to three key sets of policy choices: land-tenure policies that support smallholder farmers, manufacturing policies that subsidize domestic industries yet demand internationally competitive results, and financial policies that support the above by resisting deregulation until it can be done safely. Countries that have done these things (Japan, South Korea, and Taiwan), he notes, have developed more robustly and consistently than those that have not (Malaysia, Thailand, Indonesia). And then there's China, the big work in progress at the center of it all. Drawing upon broad yet consistently engaging historical analysis, as well as some deep dives into World Bank and International Monetary Fund reports, Studwell ultimately wants to dispel some pervasive illusions about the regionthat geography is destiny, for exampleand to suggest that developing countries would do well to ignore much of the economic-development advice they currently receive from the West.(Reprinted with permission of Booklist, copyright 2013, American Library Association.)

July 1, 2013
China Economic Quarterly founder Studwell (Asian Godfathers: Money and Power in Hong Kong and Southeast Asia, 2007, etc.) delivers a sometimes-contrarian, sometimes-counterintuitive look at the fortunes of Asia's economies, for better or worse. One of those success stories is Taiwan, which benefits from a tropical climate and the abundant rain and heat that come with it, making the island nation a vast garden as compared to much of neighboring mainland China. It benefits more, Studwell writes, from having undergone a program of land reform that preserves the "labor-intensive gardening approach" while rewarding individual ownership through an incentivized market structure. By contrast, tropical Philippines is hampered by a land tenure system that concentrates ownership in a few hands, notably an "estranged first cousin" of Corazon Aquino, who had been a former crony of dictator Ferdinand Marcos. For all the success of places such as Taiwan, Kerala and West Bengal, Studwell writes that "a country cannot sustain growth on agriculture alone" and then moves on to discuss the development of profitable (and sometimes not-so-profitable) industries and innovative financial sectors. The author also examines all of the lessons learned from throughout Asia in the light of how China has fared, with extremely mixed results: The country, he observes, has failed to truly serve its private sector and maintains a financial system "that has almost certainly been unnecessarily inefficient." Removing such hindrances and encouraging freely moving institutional systems can only further China's growth, he adds. A solid blend of the descriptive and the prescriptive, with plenty of lessons that will be of interest to Asia hands, investors and policymakers.

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