Crouching Tiger, Hidden Dragon
Crouching Tiger, Hidden Dragon
This famous movie is named for a Chinese idiom. ‘Tiger’ and ‘Dragon’ both refer to individuals with powerful hidden talents. It reminds us not to underestimate anyone. Being located in Seoul, South Korea Global Asset Management has a ring-side seat to the economic miracle of the Asians Tigers. Chinese economic growth has been regarded as a Dragon, but the government is known to exaggerate statistics. Their reported growth rate is part mirage and part scam. The four Asian Tigers, on the other hand, are transparent democracies. Having gone from struggling third world countries to leading industrial nations in mere decades, they have a lot to teach us.
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The Four Asian Tigers
This auspicious list includes South Korea, Singapore, Taiwan and Hong Kong. These high growth economies maintained high economic growth rates since the 1960s. They accomplished their success through expanding exports and rapid industrialization. Collectively, they are respected as leading nations both from their ability to lift their people up and to establishing responsible governments and rules of law.
All four countries accomplished powerful economic growth, especially during the period of the 1950s to the 1990s. They are established members of the league of industrialized nations. Singapore and Hong Kong are global financial centers. Taiwan and South Korea are essential manufacturing hubs. The world depends on them for IT, electronic and automobile components.
The Secret to their Success
The Four Asian tigers share three common values: high levels of education, high savings rates and a focus on exports. Their collective economies have also proven resilient, withstanding the 1997 Asian financial crisis and the 2008 global credit crunch. Their societies are open and welcoming to foreigners, bringing both expertise and investment which further growth. Global Asset Management, based in Seoul, Korea is a prime beneficiary of the talents and welcoming nature of the region.
Officially named The Republic of Korea, it is the only one of the four Tigers that is a member of the G20. In the 1950s, the country’s per capital GDP was similar to third world countries in Africa and Asia. By 2019, South Korea reported a GDP of US$2 trillion, a growth rate of 3.1% and a per capita GDP in excess of US$39,000. In addition to the aforementioned values, the country achieved this incredible growth through building its export based targeted to meet growing global demand, strategic credit allocations and import restrictions. The thriving democracy encourages companies like GAM to establish themselves locally.
In 2019, Taiwan achieved a GDP of US$1.2 trillion and a per capita GDP of $50,293. The country has a contentious relationship with the People’s Republic of China. Due to Chinese pressure, Taiwan is not a recognized member of the United Nations. Nevertheless, the country is thriving. ‘Made in Taiwan’ has transformed from being a joke to a stamp of reliability. It is a reliable manufacturer and exporter; Taiwan boasts one of the strongest economies in the region. Its population of 24 million have a reputation for being well educated and hard working.
Midnight July 1, 1997 the British transferred sovereignty over Hong Kong to the Government of China. As of now, Hong Kong is a special administrative region of China. In theory Hong Kong remains self-governing in all areas except defense until 2047. Prior to the tensions with the Chinese government and resulting protests, the economy was strong. Statistics for 2019 measured a GDP of U.S.$454.9 billion and 3.8% growth. The tensions have resulted in some capital flight but it is still considered a free economic zone.
The Republic of Singapore is a sovereign city-state. The island, with a population of a mere 5.6 million, has a growth rate of 3.6% and a GDP of US$527 billion. The country is considered a friendly-dictatorship and has one of the lowest rates of corruption in the world. Singapore has a strong legal framework, well-protected property rights and a transparent regulatory environment. Along with its favorable taxation rates, its private and commercial sectors enjoy fiscal security making it a regional leader in finance and other areas.
The Asian Tigers all enjoy prominent status in the Asia-Pacific region. China dominates the neighborhood economically. It remains to be seen what impact the coronavirus and Chinese-American trade tensions will have. Singapore, for example, is benefiting from Hong Kong’s relationship with China. South Korea is engaged in its own trade issues with Japan. Taiwan is emerging as a direct beneficiary of the U.S.-Chinese trade war. The four countries have matured from developing nations to first world countries. Their past meteoric growth will also mature to the steady rates consistent with first world countries.
For more information, please contact https://www.global-asset-mgmt.com/contact-us. GAM investment advisors welcome all investment related inquiries.