Economies of East Asia

Economies of East Asia
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  • 0:00 The Economy of Japan
  • 1:38 The Economy of China
  • 3:12 The Economy of North Korea
  • 4:30 The Economy of South Korea
  • 5:39 Lesson Summary
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Lesson Transcript
Instructor: David Wood

David has taught Honors Physics, AP Physics, IB Physics and general science courses. He has a Masters in Education, and a Bachelors in Physics.

After watching this video, you will be able to describe the economies of East Asia and a few ways they are different from each other. A short quiz will follow.

The Economy of Japan

Today we're going to look at the various economies of East Asia. East Asia is an area usually considered to include China, Japan, North Korea and South Korea. Let's start with Japan.

The economy of Japan is a free-market, capitalist economy, similar to most Western countries. It's the third-largest economy in the world, with particularly strong car and electronics manufacturing industries. Like many developed economies, most of its gross domestic product (GDP) comes from the service sector (73%), with most of the rest being a combination of industry (26%) and agriculture (1%). Japan has little in the way of mining or other primary industry.

The Japanese favor free trade and are part of many trade organizations, including the Asia-Pacific Economic Cooperation (APEC), the World Trade Organization (WTO), the Organization for Economic Co-operation and Development (OECD), the G-20 and the G-8.

Japan's main exports are cars and machinery, semiconductors (for example, microchips), iron and steel products, auto parts and plastics. They mostly export to China and the U.S. but also have significant exports to South Korea and many other countries. Japan's main imports are oil, gas, clothes, semiconductors and coal. They mostly import from China, the United States, Australia and Saudi Arabia.

The Economy of China

The economy of China is known as a socialist market economy, which involves a dominant state-owned sector, operating in an open-market economy. Despite criticisms of socialist economies in the West, China currently has the world's largest or second largest economy, depending on what measure you use. It's also the fastest-growing economy in the world.

Unlike many Western economies, less than half their GDP is based in the service sector. Services account for 48% of GDP, followed by industry at 43% and agriculture at 9% as of 2014. Much of the 43% for industry is manufacturing - China is the biggest manufacturing economy in the world. China is also part of the WTO, APEC and the G-20.

China has the greatest value of exports of any nation on Earth. China's main exports are machinery, including electrical equipment, apparel, textiles, iron, steel, optical and medical equipment. This is mostly exported to the U.S., Hong Kong, Japan and South Korea. But Chinese exports travel across the globe. China is also the second largest importer and so isn't as export-biased as people imagine. China's main imports are machinery, including electrical, oil, optical and medical equipment, ores, plastics and chemicals. They import from a mix of countries but especially South Korea, Japan, Taiwan, the United States, Australia and Germany.

The Economy of North Korea

The economy of North Korea is a command economy, or an economy where production, investment, prices and incomes are all determined by a central government. Another way of wording this is to say that the economy is centrally planned and doesn't rely on the market to spread money and goods around. With less support from other communist countries, it has been difficult for North Korea to maintain a successful economy, and it's therefore one of the poorest countries in the world. Though it's hard to make estimates because so little information about the economy is known, and the currency of North Korea is not exchangeable.

By sector, the North Korea economy is far more mixed than most. Based on 2013 estimates, mining and industry account for 37% of GDP, 34% is services, 22% is agriculture and fishing, and 8% is from construction. North Korea is not a member of any formal trade organizations.

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