Asian Market

By: EconomyWatch   Date: 23 November 2010

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The Asian Market can be characterized by different markets of China, India, Japan, Hong Kong, Singapore and markets of different countries in Southeast Asia, the Gulf region and those in the erstwhile Soviet countries such as Uzbekistan and Tajikistan . The term of the Asian market is hardly homogenous as it encompasses the varying market structures of different Asian countries. While we have the newly emerging economies of China and India opening up its market structure to a largely free market economy, the erstwhile Soviet blocs of Uzbekistan, Tajikistan, Kazakhstan and Azerbaijan are still trying to grapple with the forces of globalization and liberalization and still reeling under the influence of heavy market control by the national governments, have one of the lowest per capita incomes in Asia. The markets of Japan, Singapore and Hong Kong are however defined as laissez-faire economies .

The Asian market structure has heavily influenced the development of the Asian nations according to the Washington Consensus of 1989 . From the mid-1980's to the late 1980's and onward , the Asian countries such as India, China and Vietnam practiced a significant amount of privatization of its economy, deregulation and liberalization of the market. It was particularly evident in India, which abolished the licensing regime in the 1990's after being in place since the inception of the planning period. The openness to trade, financial liberalization in many of these countries was even more prominent in the later decade of the 1990's when almost all of these economies took off to a stage of development.

According to the comparative growth experience of the East Asia and Pacific region and the South Asian region , we will see that while the growth rates for the South Asian region rose from 1.2% in 1960-80 period to 3.3% in the 1980-90, the growth rates for the East Asia and pacific region increased from 3.3% to 5.6% for the same period . The economies of India, China, South Korea and Vietnam have experienced rapid growth in the recent years maintaining growth rates consistently around 8% with opening up its economies. As a corollary, it can be said that opening up of the economies have resulted in growth rates and increased per capita incomes rather than following a policy of protectionism and barriers to trade . The Asian consumer growth index also appears to be bullish in these economies.

The key Asian Markets would be :

•  Japan - free market economy but on the downslide in the recent years as a developed nation. The growth rate has been as low as 2.6% in the recent years. the time required to start a business is however as low as 23 days at present.

•  China - a communistic economy with rapid steps towards privatization and liberalization and adoption of the free market system for many products and services with certain key infrastructural facilities under the government rule. The time required to start a business was 35 days according to the latest estimates of 2006.

•  India - a mixed economic model with government's five year plans still in place to achieve certain development targets for the economy. However, the private sector is growing in importance and the virtues of the free market are finding its way to the public sector as well resulting in its increased efficiency. The annual growth rate touched 9.2% at the end of 2005 with the time required to start a business around 35 days at present.

•  Korea - a largely market economy with gradually making its presence felt on the international scene. High growth rates, moderate inflation rates make this economy one of the strongest in the Asian scene. The time required to start a business was as low as 22 days in 2006 and the market capitalization of companies is gradually increasing.

•  Vietnam - gradually opening up from its communistic image by allowing more and more private participation. Although the time required to start a business is still around 50 days, it has achieved phenomenal growth rates of consistently above 8% in the last two years.

It should be noted in this context that openness to the market economic structure carries with it the added burden of higher inflation rates, which is concomitant to high growth rates for the economy . Countries such as China and Korea have scored over the others in this regard with inflation rates as low as 3%-4%. Another important issue regarding Asian markets is the rising concern of the Afghan economy which is getting derailed from the process of nation building due to rising drug trafficking and the sheer size of the opium industry which accounts for almost one-third of the economic activity of the country and shows no signs of moderation. The result is it still remains one of the poorest economies of the world.





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