Economics

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Economics Politics of Asia
Unit 3 of Asia
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Section 1 History of Japan
Tokugawa Shogunate

• To protect Japan from outside influences, the
  Tokugawa introduced a policy of national
  isolation.
• In 1639, the Tokugawa closed Japan to all
  foreigners except the Dutch and the Chinese who
  were permitted to trade at Nagasaki
• At the same time, laws were issued that
  prohibited any Japanese from going to a foreign
  country for any reason
• The penalty for violating this order was death.
• Japanese who were not in the country were not
  permitted to return to Japan.

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Opening Up to the West
Around the year 1800 European influence in Asia
and the Pacific increased a great deal. By the
mid- 1800s much of Asia had come under control
of European nations. If US ships were wreaked
and sailors were captured in Japan, they were
often jailed and beat up which ticked off the
US 4. So the US wanted to Open Up
Japan
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In 1852, the US government sent a naval
expedition to Japan under the command of
Commodore Matthew Perry Perry believed that a.
the US should expand through the Pacific Ocean
due to Manifest Destiny (God said that the US
should spread its influence over the world) b.
the desire to have shipwrecked sailors and all
Americans treated fairly and well c. the US
wish to expand trade for economic gain and
increased political power d. desire by the
US to set up a coaling station for
its ships
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• The arrival of the US ships in Tokyo in 1853
  frightened the Japanese who had never seen
  steamships before many panicked and moved out
  of Tokyo
• The Emperor and the Tokugawas wished to maintain
  a policy of separation but they realized that
  Japan was helpless against modern military
  strength of the US and that it was not possible
  to maintain Japanese isolation.
• The next year Japan gave in to t he US
  demands
• Soon Japan had to open-up to the rest of
  the world and the Toks looked very weak.

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Japan Enters the Modern World
Meiji Restoration

• Japan suffered from low tax collections so the
  samurai could not be paid so it ended their role
  in Japan
• People became very unhappy with everything in
  Japan and demanded change.
• In 1868 the Emperor abolished the shogunate of
  the Toks
• So started the Meiji restoration
• Meiji means enlightened rule

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War with China
1. Since Japan was very small for its population,
Japan needed more room and China was their main
target. 2. China had all the raw materials that
Japan needed. 3. In 1932 Japan took Manchuria in
northern China 4. Japan left the League of
Nations in 1933 5. League of Nations A
predecessor of the United Nations, aimed at
securing international security. It was created
after World War I in an effort to hold countries
accountable and maintain peace, but the US never
joined.
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In 1937 Japan went to war with China in an
effort to assert its dominance in Asia Its
soldiers committed atrocities on the
Chinese. Atrocities now punished as war crimes,
war atrocities include various kinds
of torture. Japan also wanted SE Asia for
more raw materials like oil and rubber The
military's influence kept growing until General
Hideki Tojo ruled the country in 1941. Japans
military glorified war. Only the US stood in the
way of Japans expansion The US cut exports to
Japan and declared an embargo. Embargo a
decision by one country to eliminate all exports
to and imports with another country
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War with the US

• On Dec. 7th, 1941, the Japanese launched a
  surprise attack on the US bases in the Pacific at
  Pearl Harbor, Hawaii
• The Japanese also struck at the Europeans in SE
  Asia
• The Japanese invaded many areas at first, but
  after the US recovered, they were in for a long
  war, which they could not handle.
• 4. In 1945, Japan armies were defeated in the
  Pacific and its home islands blockaded and under
  attack, Japan prepared for an all out invasion by
  US forces

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Despite great loses in men and equipment,
Japan continued to fight savagely. US
fighter pilots also fought on the side of
the Chinese of which they called
themselves the Fighting Tigers. The
US flew supplies over the Himalayas to help
the Nationalist Chinese fight against
Japan One by one, the US began recapturing
islands from the Japanese The US became convinced
that only a direct invasion of Japan would lead
to an end to the war. The US estimated that it
would lose 1 million men in the invasion
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• In 1942, the US government launched a project to
  produce the first atomic bomb.
• Physicist J. Robert Oppenheimer guided the design
  and building of the bomb.
• Manhattan Project scientists tested the
  first bomb on July 16, 1945, near
  Alamogordo, New Mexico.
• . however, the US had just tested an atomic
  bomb and on Aug. 6 and 9, the first atomic
  bombs were dropped on Hiroshima and
  Nagasaki.
• On Aug 15 Japan surrendered.
• Emperor Hirohito claimed that he was not
  divine.

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Postwar Japan

• The Allies, under the command of US General
  Douglas MacArthur, oversaw Japan and
  the drafting of a new constitution after
  WWII.
• The new constitution established a democratic
  government, reduced the size of Japans military
  to a defensive force, and allowed for a modified
  version of the emperor.
• It also guaranteed certain human rights and
  extended women the right to vote.
• In 1951, Japan became independent again.
• However, it kept a close relationship with the
  US.
• The US poured lots of money into rebuilding Japan
  and helped it grow economically.
• Today, Japan is one of the wealthiest and
  economically strongest nations in the world.

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Section Two Korea, Vietnam Wars

• The Allies liberated Korea from the Japanese
  during WW II.
• Since both the Soviet Union and the US played a
  role in its liberation, the country was divided
  along the 38th parallel (line of latitude running
  through Korea).
• North Korea allied with the Soviet Union as a
  communist state.
• South Korea became a pro-US, capitalist society.
• In 1950, the Korean War began when North
  Korean troops crossed the 38th parallel
  and invaded South Korea.
• The United Nations sent troops to help South
  Korea.
• General Douglas Mac Arthur commanded the UN
  troops

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• MacArthurs forces successfully pushed the North
  Koreans all the way back to the northernmost
  parts of Korea.
• Things changed again, however, when Chinese
  troops crossed the border to help North Korea.
• A stalemate soon developed, in which neither side
  could gain an advantage.
• Both sides signed a cease-fire in 1953 that left
  the country divided at almost the exact same
  point as it had been before the war.

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• Today, tensions remain high between North and
  South Korea.
• Capitalism and democracy have allowed South Korea
  to thrive as a wealthy, modernized society.
• Meanwhile, North Korea is one of the poorest
  nations in the world.
• Its strict communist regime pours most of the
  nations resources into its military rather than
  on efforts to modernize and benefit the
  population.

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The Two Koreas Today

• For 40 years, North Korea relied on its two giant
  neighbors, the Soviet Union and China, for
  political, economic, and military assistance.
• in 1991, the Soviet Union broke up and the new
  country Russia broke off ties with the North
• China ticked off the North as they became more
  friendlier to the South
• North Korea has lived in isolation since its
  independence.
• TVs and radios are built so they only receive
  North Korean stations and not South Korean
  stations.
• The government was afraid that the people might
  learn new ideas

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• Only the government has computers
• North Korea was ruled by a dictator, Kim Il Sung
  until his death now his son, Kim Jong Ill rules
• the North has had several droughts and many
  people have died of starvation
• North Korea is believed to have several nuclear
  missiles able to reach the South and Japan.

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World War II in SE Asia

• Japanese Occupation
• Japanese wanted SE raw materials
• took most of SE in 1942
• Japanese claimed to want to free SE from
  Europeans Asia to the Asians but they really
  wanted to exploit them.
• Japanese treated SE more harshly than Euros
• US and Brits gave arms to guerrillas to fight the
  Japanese
• overall the Japanese occupation helped SE
  independence movements as it got the Europeans
  out, Japanese used propaganda to tarnish Euros.
• Japanese gave independence to many countries,
  Japanese trained many SEs for war which latter
  helped with independence movements.

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French Indo-China

• After Japans defeat, France tried to reassert
  its control over Indo-China (Vietnam,
  Cambodia, Laos).
• In Vietnam, a nationalist movement under the
  leadership of Ho Chi Minh arose to resist
  the French.
• Ho Chi Minhs success concerned the US because
  they viewed him as a communist.
• In 1954, the Vietnamese and Western powers
  reached a compromise.
• They divided Vietnam into two nations.
• North Vietnam fell under the communist rule of Ho
  Chi Minh, while the US-backed government ruled
  South Vietnam.

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The Vietnam War

• Before long, war broke out between North and
  South Vietnam.
• The US sent military advisors and eventually
  troops to help the South Vietnamese
  resist communist forces.
• The US feared that communist would spread
  throughout all of Eastern Asia if South Vietnam
  fell (the Domino Theory).
• in 1964 US ships were supposedly attacked by the
  North in the Gulf of Tonkin in 1964
• US president Johnson got a blank check from
  congress to fight back

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• US did not declare war on Vietnam through it
  sent military advisers in 1965
• Upon arrival, the US found itself fighting
  not only North Vietnams invading army, but
  also South Vietnamese communist known as
  the Viet Cong.
• The Viet Cong consisted largely of poor rural
  farmers who felt they would fair much better
  under communism.
• Although not nearly as modern or well supplied as
  the US forces, the Viet Cong and North Vietnamese
  launched an effective guerilla war.
• In guerilla warfare, a weaker enemy attacks
  quickly and unexpectedly, then slips away before
  its enemy can fully retaliate.

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• It hopes to inflict enough damage that its
  stronger enemy will lose its will to fight.
• As years passed and more and more US soldiers
  died in Vietnam, guerilla warfare eventually
  succeeded.
• In 1973, the US formally ended its military
  involvement in Vietnam.
• It signed an agreement known as the Paris Peace
  Accords.

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• Under this treaty, the US pulled out its
  remaining troops, and South and North Vietnam
  agreed to exist peacefully alongside one another.
• Soon after the US troops left, however, the
  communist began their fight again.
• In April 1975, the South Vietnamese capital of
  Saigon fell.
• After decades of struggle, the Communist finally
  had all of Vietnam in their grasp.

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Cambodia

• since Cambodia is next to Vietnam it got involved
  in the war both north and US used it as target
  practice
• after the war and with Cambodia in chaos, Pol Pot
  took over as a communist
• he started the Killing Fields as everyone was
  force to move to the countryside as all cities
  were emptied.
• all opposition was killed.
• after 4 years, 2 million out of 6 had been killed

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Part Three - Government
Confederation Government

• A confederation government system is one in which
  the local governments hold all of the power and
  the central government depends on the local
  governments for its existence
• The central government has only as much power as
  the local governments are willing to give
• The United Nations is a good example of a
  confederation
• The United Nations can only offer advice and
  assistance when the member nations agree to
  cooperate
• Examples of confederations that can be found
  among the countries of Asia include the
  Association of Southeast Asian Nations (ASEAN)
• This organization is a regional group organized
  to help the member countries cooperate on
  economic matters, encourage cultural exchanges,
  and to help keep peace and stability in the region

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Autocratic Government

• An autocratic government is one in which the
  ruler has absolute power to do whatever he wishes
  and make and enforce whatever laws he chooses
• Individuals who live under autocratic governments
  do not have any rights to choose leaders or vote
  on which laws are made and put into practice
• Some autocratic governments may allow the people
  rights in certain areas like managing local
  affairs, but the central governments keeps
  control of all the most important aspects of the
  countrys life
• People usually have little or no power
  to use against the government if they
  disagree with decisions that government
  or ruler has made

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North Korean Government

• The communist government of North Korea is an
  example of an autocratic government
• Kim Jong-Il holds the office of premier and heads
  the National Defense Commission, the two most
  powerful positions in the government
• He rules North Korea as an autocratic dictator

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Presidential Government

• A presidential form of democratic government has
  a president, or chief executive, that is chosen
  separately from the legislature
• The legislature passes the laws, and it is the
  duty of the president to see that the laws are
  enforced
• The president holed power separately from the
  legislature, but he does not have the power to
  dismiss the legislature or force them to make
  particular laws
• The president is the official head of the
  government
• The legislature does not have the power to
  dismiss the president, except in extreme cases
  when the president has broken a law
• The president is BOTH the lead of state and the
  head of the government

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• One difference between a presidential and
  parliamentary system of government is that a
  prime minister is a member of a parliament while
  a president is in a separate branch of the
  government
• In a presidential system, the president serves
  for a set period of time (in the US, a president
  can serve 2 four year terms)
• On the map below, Presidential countries are in
  blue including Asian countries like South
  Korea, Philippines, and Indonesia

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Government of Japan

• Before World War II, the country of Japan was a
  monarchy
• It was ruled by a hereditary emperor named
  Hirohito
• The people believed him to be descended from the
  Sun
• He was thought to be a god, and few in the
  country had ever seen him
• After Japan was defeated in World War II, the US
  helped the Japanese reorganize their government
  as a constitutional monarchy

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• The government of Japan has a unitary system of
  government
• It is a constitutional monarchy (a monarchy in
  which the powers of the ruler are restricted to
  those grated under the constitution or laws of
  the nation)
• The Emperor of Japan is head of state and is a
  symbol of the country with no political power
• This means that he has ceremonial duties, but he
  does not take part in the day-to-day politics of
  the country
• The power in the Japanese government is in the
  hands of the Japanese Diet, a two-house
  legislature that is elected by the Japanese
  people
• The government is led by a prime minister and a
  cabinet of advisors
• This was created in 1947

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• The prime minister is chosen by an election of
  the members of the Diet
• All Japanese citizens over the age of 20,
  including women, are guaranteed the right to vote
  for the members of the Diet
• The constitution also includes a Bill of Rights,
  spelling out the basic freedoms that all Japanese
  citizen may enjoy

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Part Four - Economics
Literacy

• Literacy, or the ability to read and write, has a
  big effect on the standard of living of a country
• Those who cannot read or write have a very
  difficult time finding decent jobs
• Lack of education also prevents many young people
  from becoming the engineers, doctors, scientist,
  or entrepreneurs that modern economies need in
  order to bring improvements to their countries
• In many parts of the world, education is only
  available to those who can afford to pay for it
  themselves
• In those countries, the literacy rate is often
  quite low
• Countries that have stronger economies usually
  make money available so that anyone who wants an
  education can go to school

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Gross Domestic Product

• One way to measure the standard of living is the
  Gross Domestic Product, or GDP
• The GDP is the value of all goods and services
  produced within a country in a given year and
  converted into US dollars for comparison
• When divided into a value per capita (or per
  person), it can be used as a measure of the
  living conditions in a country
• The higher the GDP value,
  the better the living
  conditions in the country

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Gross Domestic Product (per capita) for Asian
Countries
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Economy of Japan

• Japan has one of the most technologically
  advanced economies in the world
• Only the US and China have economies that are as
  large, and in Chinas case, they are ahead of
  Japan in large part because of the size of the
  countries population (1.3 billion vs. 110 million
  for Japan)
• The Japanese government has a close and
  cooperative relationship with major industries in
  Japan and the Japanese people traditionally have
  a strong work ethic
• In addition, Japan spends very little on
  maintaining a military, a restriction that has
  been in place since the end of World War II
• Japan is able to invest more money in industry
  and technology because they do not need it for
  the military

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• Japan has very little farmland and few natural
  resources
• For that reason, the country must import raw
  materials and food
• The need for industry and for world trade also
  means a well-educated work force is an absolute
  necessity
• Japan must also import all of its oil
• One alternative energy source the Japanese have
  developed is nuclear power
• About one-third of all of Japans energy is
  supplied by nuclear power plants
• One of Japan's largest industries is the fishing
  industry
• Because so much food must be imported, the sea is
  a valuable resource for the Japanese

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• There is some farming in Japan, but because there
  is so little arable land (suitable for farming),
  crops are often planted in terraces carved out
  of hillsides
• The government often buys up farm goods to keep
  the prices high enough for farmers to make a
  profit
• They also do not let foreign countries sell
  certain farm products in Japan if those products
  will compete with Japanese farm goods
• Japan is one of the worlds leaders in the
  production of cars and electronic equipment, two
  types of products that require constant updates
  in production methods and use of new technologies
• An educated workforces is essential to remain
  successful and keep up with world demand
• Industrial production and work in providing
  services account for almost 98 of Japans GDP

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• Japan has one of the most highly educated
  populations in the world
• Competition for places in high school and college
  is hard, and Japanese students must be able to
  pass very difficult exams to earn a chance to go
  on to a higher level
• This same effort goes into the Japanese workplace
  as well
• Companies in Japan have traditionally expected
  their employees to work long hours, but also to
  be proud of the success their hard work will
  bring
• The Japanese government helps companies decide
  what products will sell best on the global market
• The government also protects Japanese industries
  by setting tariffs on imported goods that might
  compete with products made in Japan
• These tariffs are taxes placed on imports
  that make them more expensive than the
  Japanese products

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Economy of North Korea

• The best example of a command economy in Asia
  today is North Korea
• In that country, the government makes all
  economic decisions
• The government owns nearly all the important
  factories and industries
• North Korea has one of the least open
  economies in the world today
• The Communist Party controls the government
  and the economy, through the majority of power
  rests in the hands of Premier Kim Jong-II

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• Agriculture in North Korea does not produce
  enough food to feed the population
• Farms are organized into cooperatives that are
  owned by the government
• The farmers are told what to grow, through some
  do manage to have small gardens
• In the 1990s, North Korea had several years of
  poor harvests and as a result, about 1 -2 million
  people starved
• Kim Jong-Il has tried to build up North Koreas
  industry in recent years
• The country does have some rich mineral resources
  like coal and iron
• The production of steel and machinery are leading
  industries in the country as well as some
  production of textiles

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• The government has also worked in recent years to
  develop nuclear power plants (along with nuclear
  missiles)
• One reason for the difficulty in correcting many
  of the economic problems facing North Korea is
  that the government has spent millions on the
  military rather than investing the money in
  other aspects of the North Korean economy
• Because of the autocratic rule of Kim Jong-Il,
  the economic situation in North Korea is likely
  to remain difficult for the time being

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Specialization

• Not every country can produce all of the goods
  and services it needs
• Because of this, countries specialize in
  producing those goods and services they can
  provide best and most efficiently
• They look for others who may need these goods and
  services so they can sell their products
• The money earned by such sales then allows the
  purchase of goods and services the first county
  is unable to produce
• In international trade, no country can be
  completely self-sufficient (produce all the goods
  and services it needs)
• Specialization creates a way to build a
  profitable economy and to earn money to buy items
  that cannot be made locally

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• The countries of Asia are very different in terms
  of how their economies are organized
• India has a lot of farm land, but the population
  is so large it is often difficult to grow enough
  food for everyone
• India has a booming industrial and technological
  economy
• This specialization makes it possible for an
  economy as enormous as that of India to focus on
  those businesses that are the most profitable
• China is much the same
• Some areas of the country are almost all
  agricultural
• Others have large cities and modern industries
  where they specialize in making cheap consumer
  goods for the world market

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• Japan is a country with very few natural
  resources, so specialized industries have been
  developed to earn money needed to buy food and
  raw materials from other countries
• North Korea has had many problems in their
  attempts to improve the harvests on their farms
• As a result, the North Korean government has had
  to turn to industries that use the countries
  natural resources like iron and coal in order to
  keep the economy going
• Specialization allows countries to produce what
  they do best and generate income to buy what they
  still need

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Trade Barriers

• Trade barriers are anything that slows down or
  prevents one country from exchanging goods with
  another
• Some trade barriers are put in place to protect
  local industries from lower priced goods made in
  other countries
• Other times trade barriers are created due to
  political problems between countries
• Trade is stopped until the political issues are
  settled
• A tariff is a tax placed on goods when they are
  brought into (imported) from one country to
  another country
• The purpose of a tariff is usually to make the
  imported item more expensive than a similar item
  made locally
• This sort of a tariff is called a protective
  tariff because it protect local manufacturers
  from competition coming from cheaper goods made
  in other countries

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• A quota is a different way of limiting the amount
  of foreign goods that can come into a country
• A quota sets s specific amount or number of a
  particular product that can be imported or
  acquired in a given period of time
• A third type of trade barrier is called an
  embargo
• An embargo is when one country announces that it
  will no longer trade with another country in
  order to isolate the country and cause problems
  with that countrys economy
• Embargoes usually come about when two countries
  are having political disputes
• Embargos often cause problems for all countries
  involved
• The US currently has embargos against Cuba, Iran,
  North Korea

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Currency Exchange Rate

• Most of the countries in Asia have their own type
  of currency (money).
• In order for them to pay for goods as they trade
  with each other, they have to establish a system
  of changing from one type of currency to another
• This system is know as an exchange rate
• They also have to be able to exchange their
  currencies with those used by other countries
  around the world

Country Currency Equivalent in US Dollars
US Dollar 1.00
India Rupee 43 per dollar
China Yuan 7.5 per dollar
Japan Yen 110 per dollar
North Korea Won 140 per dollar
Vietnam Dong 16,000 per dollar
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Human Capital

• Human capital means the knowledge and skills that
  make it possible for workers to earn a living
  producing goods or services
• The more skills and education workers have, the
  better they are able to work without mistakes and
  to learn new jobs as technology changes
• Companies that invest in better training and
  education for their workers generally earn more
  profits
• Good companies also try to make sure working
  conditions are safe and efficient, so their
  workers can do their jobs without risk

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• Companies that have invested in human capital
  through training and education are most likely to
  have profitable businesses and more satisfied
  workers than companies that do not make these
  investments
• Countries where training and education are easily
  available often have higher production levels of
  goods and services, therefore higher gross
  domestic product, than countries that do not
  offer these opportunities
• Many of the countries of Asia have great
  differences in their GDP
• Countries such as Japan, China, and India, have
  made the decision to invest in human capital
  (Japan since after WW II, China since Deng
  Xiaoping, and India since 1991)

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Capital Goods

• Capital goods (the factories, machines, and
  technology that people use to make products to
  sell) are important to economic growth.
• Advanced technology and the organization of this
  technology into factories where many workers can
  work together increases production and makes the
  production more efficient
• Producing more goods for sale in a quicker and
  more efficient way leads to economic growth and
  greater profit
• This greater profit leads to a higher GDP

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• Few countries in the world have made the
  investments in capital goods that the country of
  Japan has made
• Japan is a country with few natural resources
  therefore, nearly all of Japans GDP comes from
  industry and services
• Technology and up-to-date training in the uses of
  that technology are essential for the Japanese
  economy to continue to grow
• Japanese industry leads most countries in the
  world in the use of robotics (assembling goods
  using mechanical techniques like robots)
• Many electronics and software products are put
  together with robotics in Japanese factories
• Japanese business men are always looking for more
  efficient technology to keep their production
  levels high
• Japanese workers are encouraged by their
  employers to make suggestions for ways they feel
  products can be made and businesses can be run
  more efficiently

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Natural Resources

• Distribution of natural resources throughout Asia
  plays a major part in determining the type of
  work people do and how comfortable they are able
  to live
• A natural resource is something that is found in
  the environment that people need
• Water, trees, rich soil, minerals, and oil are
  all examples of natural resources
• One of the most valuable resources in this part
  of the world is rich farmland
• All of the countries in Asia, with the exception
  of Japan, depend on agriculture to feed rapidly
  growing populations
• India and China have good supplies of coal
  while this is an important fuel and energy
  source, coal burning is a major contributor of
  air pollution
• Japan has very little in the way of natural
  resources for this reason, the country must
  rely on industry and trade to supply its
  population with what it needs