Leading Dragon Phenomenon : New Opportunities for Catch-up in Low-Income Countries

Modern economic development is accompanied by the structural transformation from an agrarian to an industrial economy. Since the 18th century, all countries that industrialized successfully have followed their comparative advantages and leveraged the latecomer advantage, including emerging market ec...

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Main Authors:	Chandra, Vandana, Lin, Justin Yifu, Wang, Yan
Format:	Journal Article
Language:	en_US
Published:	Asian Development Bank and Asian Development Bank Institute 2014
Subjects:	structural transformation flying geese
Online Access:	http://hdl.handle.net/10986/16585

id	okr-10986-16585
recordtype	oai_dc
spelling	okr-10986-165852021-04-23T14:03:31Z Leading Dragon Phenomenon : New Opportunities for Catch-up in Low-Income Countries Chandra, Vandana Lin, Justin Yifu Wang, Yan structural transformation flying geese Modern economic development is accompanied by the structural transformation from an agrarian to an industrial economy. Since the 18th century, all countries that industrialized successfully have followed their comparative advantages and leveraged the latecomer advantage, including emerging market economies such as the People's Republic of China (PRC), India, and Indonesia. The current view is that Chinese dominance in manufacturing hinders poor countries from developing similar industries. We argue that rising labor cost is causing the PRC to graduate from labor-intensive to more capital-intensive and technology-intensive industries. This will result in the relocation of low-skill manufacturing jobs to other low-wage countries. This process, which we call the “leading dragon phenomenon,” offers an unprecedented opportunity to low-income countries. Such economies can seize this opportunity by attracting the rising outward foreign direct investment flowing from Brazil, the PRC, India, and Indonesia into the manufacturing sectors. All low-income countries can compete for the jobs spillover from the PRC and other emerging economies, but the winner must implement credible economic development strategies that are consistent with its comparative advantage. 2014-01-17T20:35:19Z 2014-01-17T20:35:19Z 2013-03 Journal Article Asian Development Review 0116-1105 http://hdl.handle.net/10986/16585 en_US CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Asian Development Bank and Asian Development Bank Institute Publications & Research :: Journal Article Africa Asia China
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	en_US
topic	structural transformation flying geese
spellingShingle	structural transformation flying geese Chandra, Vandana Lin, Justin Yifu Wang, Yan Leading Dragon Phenomenon : New Opportunities for Catch-up in Low-Income Countries
geographic_facet	Africa Asia China
description	Modern economic development is accompanied by the structural transformation from an agrarian to an industrial economy. Since the 18th century, all countries that industrialized successfully have followed their comparative advantages and leveraged the latecomer advantage, including emerging market economies such as the People's Republic of China (PRC), India, and Indonesia. The current view is that Chinese dominance in manufacturing hinders poor countries from developing similar industries. We argue that rising labor cost is causing the PRC to graduate from labor-intensive to more capital-intensive and technology-intensive industries. This will result in the relocation of low-skill manufacturing jobs to other low-wage countries. This process, which we call the “leading dragon phenomenon,” offers an unprecedented opportunity to low-income countries. Such economies can seize this opportunity by attracting the rising outward foreign direct investment flowing from Brazil, the PRC, India, and Indonesia into the manufacturing sectors. All low-income countries can compete for the jobs spillover from the PRC and other emerging economies, but the winner must implement credible economic development strategies that are consistent with its comparative advantage.
format	Journal Article
author	Chandra, Vandana Lin, Justin Yifu Wang, Yan
author_facet	Chandra, Vandana Lin, Justin Yifu Wang, Yan
author_sort	Chandra, Vandana
title	Leading Dragon Phenomenon : New Opportunities for Catch-up in Low-Income Countries
title_short	Leading Dragon Phenomenon : New Opportunities for Catch-up in Low-Income Countries
title_full	Leading Dragon Phenomenon : New Opportunities for Catch-up in Low-Income Countries
title_fullStr	Leading Dragon Phenomenon : New Opportunities for Catch-up in Low-Income Countries
title_full_unstemmed	Leading Dragon Phenomenon : New Opportunities for Catch-up in Low-Income Countries
title_sort	leading dragon phenomenon : new opportunities for catch-up in low-income countries
publisher	Asian Development Bank and Asian Development Bank Institute
publishDate	2014
url	http://hdl.handle.net/10986/16585
_version_	1764434243823337472

Leading Dragon Phenomenon : New Opportunities for Catch-up in Low-Income Countries

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