International Organization

Political Consequences of Industrial Change

The origins and development of the Northeast Asian political economy: industrial sectors, product cycles, and political consequences

Bruce Cumingsa1

a1 Bruce Cumings is Associate Professor of International Studies at the University of Washington, Seattle.

Theories of the product cycle, hegemony, and the world system are used to analyze the creation and development of the Northeast Asian political economy in this century. Japan, South Korea, and Taiwan have each developed in a particular relationship with the others; the three taken together form a hierarchical, constantly interacting political-economic unit. During the period of colonial rule Japan was unique in building an imperial economic unit marked by a strong role for the state (whether in Tokyo or Taipei), by a tight, integral Unking of all three nations into a communications and transport network running toward the metropole, and by a strategy of both using the colonies for agricultural surpluses and then locating industries there. After 1945 a diffuse American hegemony replaced Japan's unilateral system, but elements of the prewar model have survived: strong states direct economic development in South Korea and Taiwan (here termed “bureaucratic-authoritarian industrializing regimes”); both countries are receptacles for Japan's declining industries; and both countries develop in tandem, if in competition, with each other. The most recent export-led competition has seen Taiwan succeed where South Korea has (temporarily?) failed, leaving Seoul in an export-led “trap,” burdened with rapidly increasing external debt. Taiwan, furthermore, has industrialized relatively free of social disruption, whereas Korean society resisted its transformation at Japanese hands and remains more rebellious today. There can be one Japan and one Taiwan, but not two or many of either, in the world economy.