South Korea and Taiwan comparison.
...ears, South Korea has become a world leader in particularly the semiconductor and electronic industries. Moving on, let us first look at two graphs detailing the gross domestic product (GDP) performance of both countries. The above graph shows the GDP per capita in current prices of South Korea and Taiwan from 1980 to 1998. The above graph shows the GDP per capita adjusted with respect to terms of trade of South Korea and Taiwan from 1980 to 1998. As the two graphs above shows, both South Korea and Taiwan has a upward-sloping line which indicates the both economies are growing at an increasing rate. But it is evident from the graph that South Korea suffered a dip in 1998 due to the Asian Crisis that hit several Asian countries badly and one of them being South Korea. One of the similarities that both countries share is the high level of industrialization present in both countries. In 2001, industrial production accounted for 31% of Taiwan’s GDP and 42% of South Korea’s GDP. Goods such as textile, wood, leather that once was dominant in Taiwan’s exports were diminishing throughout the years at an increasing rate. The same goes for South Korea who used to have steel, textiles, etc at the top of its exports list has found that its top exports have been swiftly overtaken by semiconductor and electronic products. Both countries are actively promoting emerging industries with good prospects such as, computer hardware and software, telecommunications, etc. Manufacturing has also dominated in both South Korea and especially Taiwan since the 1960s and in 2001, manufacturing has accounted for 25.57% of GDP in Taiwan 30.5% of GDP in South Korea. Therefore, South Korea and Taiwan are categorised as high-performing countries in Asia, both countries with GDP per capita of over US$15,000. The major differences however in South Korea and Taiwan’s economic conditions are how South Korea is a big business economy while Taiwan is a small-medium enterprise economy. There are three indicators that suggest this conclusion. Firstly, the production totals of large-scale firms (over 500 employees) as a percentage of national production was 45.3% for South Korea and only 26.8% in Taiwan in 1993. Secondly, the total sales of corporations in the top 5, 10, and 50 listings as a percentage of GNP was 47.6%, 58.8% and 79.9%(1991) for the South Korean economy, while the numbers were much lower at 17.8%, 23.2% and 36.4% (1990) in Taiwan’s case. Thirdly, exports of small and medium enterprises as a percentage of total exports, was 37.7% for South Korea and 67.1% for Taiwan in 1987. The big business economy in South Korea develops into one of the major effects faced during the economic crisis. Furthermore, in the 1990s, the government, anxious to avoid failures due to large wage rises, instructed banks to crop up large firms. However, the Asian crisis still manages to damage the shield the government had put up. Fortunately, South Korea had drawn up a five year series plan in 1962 which allows the country to adjust its policies to any hiccups the economy faces. Thus, South Korea can quickly take action to recover from economic depression affecting the whole of South Korea. Taiwan, compared to South Korea, is a much small-medium company economy. It even used to be an export-led economy. Since early 1960s, a combination of export-led growth, heavy investments in education and infrastructure, macroeconomic stability, and state management, predominantly in electronics, rewarded in a combination of economic growth, equity and structural transformation that garnered attention all over the world. Till now, Taiwan remains to have a dynamic capitalist economy with substantial government guidance of investment and foreign trade and partial government ownership of some large banks and industrial firms. Real growth in GNP has averaged about 9% a year in the past three decades. Export growth increases and has provided the momentum for industrialisation. Inflation and unemployment are kept low. This is the economic tran...