ABSTRACT
The rise of the East Asian countries was one of the greatest economic miracles of the late twentieth century. By shifting from an inward-to an outward-oriented economic development approach, they became integrated into the global economy, expanding their exports, acquiring technology and accessing foreign investment. A wide array of selective industrial policies implemented by their
governments contributed to their successful catching up experiences (Chang 2003b). Soon afterwards, in the past three decades, China has emerged as another economic miracle. Like its newly industrialized East Asian neighbours, China has demonstrated an extraordinary economic take-off after opening up to the outside world. From 1979 to 2004, it sustained an average annual growth rate of real GDP of 9.3 per cent and so far shows no sign of slowing down. China also successfully overtook the United Kingdom in 2002 to become the world’s fifth largest trading economy and Japan in 2004 to become the third (after the United States and Germany). The Organization for Economic Co-operation and Development (OECD) even predicts that exports from China will surpass those from Germany in 2008 and rise to 10 per cent of the global market share by 2010 to overtake the position of the United States (OECD 2005).
