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China's Economy

  • World leader in gross value of industrial input
  • GDP composition 45.3%
  • Relies heavily on export sector and manufacturing
  • Worlds 2nd largest economy
  • Accounts for 70% of North Koreas trade
  • Imports growing as domestic demand grows
  • China taken over US bank for the first time ever
  • Income doubled from $9,100 to $5,500 by 2020
  • Dependent on FDI, growth would be 1% slower without it 
  • Economic reforms 'open door policy' encouraged FDI from TNC's
  • Special economic zones set up (Free Trad)
  • Local market size increased
  • Huge pool of low wage, highly skilled workers
  • Literacy rates = 92%
  • Grown in area of globalisation
  • 70% of FDI in manufacturing section
  • Sometimes profits leak out of China to TNC's
  • To become a global player China needs to focus on developing its own industries - Car, Dangfeng, made 9 million last year
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Japans Economy

  • Worlds 3rd largest economy
  • Major aid donor and source of global capital and credit
  • 1960's economy rapidly industrialised 
  • 1980's Japan talked of as new superpower - undergone economic miracle
  • 1991 GDP hit a wall and remained stagnant for over a decade as the Bank of Japan increased its intrest rates and their was a subsequent collapse in property value
  • 1990's economy only grew by 0.1%
  • It has never really recovered as consumers continued their frugal lifestyle, an ageing population are naturally conservative and it seems that the youthful high tech thrust has gone from Japan
  • Huge social security costs endangered by the ageing population
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South Korea's Economy

  • Began by imitating technology 
  • Moved onto make their own technology such as Samsung
  • Economy is 3rd largest in Asia
  • Is the 13th largest in the world
  • However high levels of foreign debt has left them exposed
  • They have cut intrest rates to boost growth
  • Growth forecast for 2013 was 2.3% due to weak exports and slow consumption
  • Export sector hit by weak global demand
  • Exports account for nearly half of South Korea's economy
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North Korea's Economy

  • Specialises in Military products
  • Private entrepreneurship is not supposed to exisit but the Government turns a blind eye
  • Markets account for 75% of average North Korean's family income
  • Accounts for 1% of China's trade
  • China accounted for 70% of exports and 60% of NK imports
  • South Korea account for 20% of imports
  • If China decided to empose an economic embargo it would be crippling to North Korea but would not even scratch the Chinese economy
  • 2011 GDP per capita was $509 and growth was set at 0.1% 
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Conflicts

The Korean War 1950-1953

  • USA agreed to divide Korea, USA taking the South and USSR taking the North
  • Both occupying forces withdrew in 1949 and both left each with well equipped with forces
  • Both halves wanted to reunite and so in 1950 North Korea invaded South Korea
  • Cease fire was singed in 1953 but no peace treaty

Senkaku Islands

  • Key Players: Japan, China and Taiwan
  • Uninhabitated islands since Japan found oil in 1968 but China and Taiwan have always disputed over control
  • Could contain 17.5 trillion cubic feet of natural gas and 20 million barrels of oil
  • Sovereignty for China over islands pushes Exclusive Economic Zone outwards

Socotra Rock

  • Key players: South Korea and China
  • 150km from SK, 250km from China
  • Both have EEZ and rock overlaps, could also contain oil and mineral deposits
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Tension

Physical Proximity

  • North and South Korea - the Korean War - 1950 -1953
  • Want to invade 
  • Always threat of invasion will increase tension
  • Korean Demilitarized Zone - most heavily armed border in the world

Territorial Tension

  • Senkaku islands - China and Japan
  • Controlled by Japan but China want some seeing as there is potential oil supplies
  • Socotra Rock - China and South Korea
  • Each countries EEZ overlaps at rock
  • Potential oil and mineral supplies, in past has become violent

US Military

  • High number of troops in Japan; 3 navy bases, 2 army, 3 air force and 2 marines and in South Korea 1 navy base, 5 army and 2 air force bases
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Tension cont.

Political Systems

  • Both China and North Korea are Communist countries
  • Both South Korea and Japan are Capitalist countries 
  • China follows capitalist method of development

North Korea

  • In 2013 North Korea threatend Japan, South Korea and America with Nuclear weapons
  • Its army will also increase threat as it is the 2nd largest in the region 

Military Tension

  • Size of armies in the region will indefinietly increase tension
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Shift In Power from West to East

Economic Power

  • China now 2nd largest economy in the world with South Korea 3rd largest in Asia
  • China's economy has grown by 9.5% in recent years, higher than America with 2.4%
  • Economic influence means that trade is controlled by China and could potentially leave the West out
  • Energy supply pathways such as ESPO has left Europe out

Military Power

  • China and North Korea have huge amounts of active troops
  • China 2nd chain poilcy doesnt seem threatened by US presence
  • North Koreas nuclear weapons are a potential threat to the West

Political Influence

  • ASEAN
  • Amount of internation groups that China belongs to allows them to have strong influence

West has peaked, industrial revolution over, Britian lost its colonies, America being left out

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Threats

Economic Decline

  • Japan prime example 1991 GDP hit a wall and remained stagnant for over a decade
  • Only grew by 0.1%
  • China's growth is also slowing as it hits its peak, predicted at 7.5%
  • South Korea's exports are weak and so growth is only cited at 2.3% down from 3%

Population Growth leading to insecurity

  • Japan's ageing population has led to a low economic growth as youthful thrust has gone and the elderly are naturally conservative
  • China's huge population has led to a east-west divide or urban-rural divide or rich-poor divide
  • HDI is low at 0.66
  • Food security is low and use view 2
  • Water insecurity in China
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Threats cont.

Resource Exhaustion

  • Reliance on non-renewable fuels has led to widespread pollution
  • 1990's china builing 1-2 coal powered station 
  • 2009 imported 200million barrels of oil
  • Effects the environment, water pollution as all of China's rivers are grade 3 or below
  • Air quality index was 775 and 300 is considered dangerous
  • Energy insecurity in Japan
  • Relies on imports from Russia through the ESPO pipeline
  • Provides much of its oil
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Costs of being a Superpower

Economic Decline

  • Japan prime example 1991 GDP hit a wall and remained stagnant for over a decade
  • Only grew by 0.1%
  • China's growth is also slowing as it hits its peak, predicted at 7.5%
  • South Korea's exports are weak and so growth is only cited at 2.3% down from 3%

Population Growth leading to insecurity

  • Japan's ageing population has led to a low economic growth as youthful thrust has gone and the elderly are naturally conservative
  • China's huge population has led to a east-west divide or urban-rural divide or rich-poor divide
  • HDI is low at 0.66
  • Food security is low and use view 2
  • Water insecurity in China
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Benefits of being a Superpower

Economic Growth

  • Being an economic giant will mean trade is easy
  • Able to afford military and nuclear weapons in North Korea and China's case
  • Build large scale projects such as Three Gorges Dam and South-North division project

Closing the Dev. Gap

  • Japan is 10th on HDI and South Korea 13th
  • Quality of living is slowing inproving in China
  • Money to improve supplies as well

Stronger Military

  • Money to fund a stronger military
  • Having a large military is good for superpower status
  • Allows them to have influence such as China over smaller Island
  • North Koreas nulcear threat
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Globalisation

TNC's

  • Open door policy in China brought in TNC's and FDI which is responsible for 70% of economic growth and would have grown 1% slower without it
  • Figure 7 TNC's located in each country
  • Samsung in South Korea has brought economic growth

Internet and Transportation

  • Container shipping costs are low which has benefitted the export orientated economy
  • Internet communications have shrunk the gap between TNC’s factories to allow easy communication
  • Figure 10 you can see the patent applications made by each country. Japan would not have been able to make the most applications with 29,807 without the growth of technology from globalisation
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Globalisation cont.

International Organisations

  • Figure 11 displays the organisations that each country belongs to, China, Japan and South Korea belonging to almost all of them
  • Belonging to these organisations means that these countries are geopolitically involved with others outside of East Asia
  • Easier trade between the east and west, and therefore higher economic growth. North Korea has not become part of these and is very selective with who they trade with and has therefore only seen a 0.1% growth in their economy

Other factors

  • Local markets which have grown within countries such as North Korea without the help of globalisation
  • North Korea markets account for 75% of family income
  • Markets have been able to grow within the country without major influence from globalisation and provide a large proportion of the economic growth within North Korea
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Sustainable?

Economic Growth

  • Japans growth is not sustainable as it relies too heaily on its electronic sector and it needs to expand to other sectors
  • China's growth has become fairly sustainable over the pas few years

Food Supplies

  • Relatively sustainable in China but a growing population means that it needs to import more and so produce food miles
  • This is not sustainable

USE VIEW 5

Use of resources

  • Not sustainable enough, harmful gases being released into the atmosphere, river pollution
  • Needs to improve e.g. Three Gorges Dam is HEP power = clean energy
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Environmental and Social Costs

Pollution

  • All of China's rivers are grade 3 or below contaminated by industrial waste
  • Air quality index is at 775 and harmful is considered 300
  • Japan has high ecological footprint
  • Deforestation from amount of paper China may use
  • Use up 2/3rds of worlds grain harvest

Social

  • Japans ageing population leading to slow economic growth
  • 122 million people live in poverty in China
  • Social protests over environment
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