How Asia Works

Pithy and compelling, this is perhaps the single best primer on the economic rise of East Asia.

Studwell pinpoints three recipes that allowed Japan, Taiwan, South Korea, and China to escape poverty and become export powerhouses: first, industrial policy; second, government oversight over lending and capital flows (sometimes called “financial repression”); and third—something few before him have grasped—egalitarian land reforms that broke up large estates and gave small plots to the many.

Discussions of economic development are often charged with ideology-free markets or government. As this book nonchalantly reveals, that’s a false opposition. In Studwell’s telling, development happens when governments… show more.

A revelation because it overturned some of the free-market orthodoxy I had imbibed. Industry policy was essential for the rise of Asia’s tigers, but the key insight made by Japan, Korea, and Singapore was that national champions had to be internationally competitive.

Where they were protected from competition–car maker Proton in Malaysia and aircraft manufacturer IPTN in Indonesia–they failed. The question is whether that same logic applies to China, where the domestic market is huge. I suspect we are finding out via its EV industry.