In the early 1970s, Japan became the first Asian country to undergo rapid economic development that astounded the world. Its success in the commercialization of technology in household goods led to a prolonged period of trade surplus. By the late 1970s, however, world attention had shifted to the four rapidly emerging, newly industrializing East Asian economies (NIEs) of Hong Kong, Singapore, South Korea, and Taiwan. The extent and pace of industrialization in these four economies threatened the industrialized world with a sizeable level of exports, even when protectionist trade policies were imposed (see, for example, Balassa 1980; 1981; McMullen 1982; Turner and McMullen 1982). The developmental experience of the four East Asian economies is diverse, and each displays a different set of basic characteristics, briefly summarized as follows:
• Hong Kong: gradually integrated into the Chinese hinterland economy; traditionally laissez faire and service-based.