Richardson wbieg0760.tex V1 - 05/13/2016 6:19 P.M. Page 1 ❦ ❦ ❦ ❦ Newly industrializing economies (NIEs) Shiuh-Shen Chien Liang-Chih Chen Dong-Li Dong National Taiwan University Introduction The term “newly industrializing economies” (NIEs), also known as “newly industrializing countries” (NICs), refers to countries and regions undergoing rapid industrialization and economic growth, particularly following World War II. Generally speaking, NIEs have enjoyed largely continuous growth mainly because of export-oriented industrialization, which is char- acterized by (i) export policies focusing frst on primary commodities, followed by manufac- tured goods, (ii) fnancial controls, including on currencies and interest rates, and (iii) a cheap and stable labor supply. The best-known NIEs in Asia are Hong Kong, Singapore, South Korea, and Taiwan, collectively referred to as the “Asian Tigers,” which averaged annual gross domestic product (GDP) growth rates in excess of 6% between 1970 and 1990. There are at least three diferent but interre- lated approaches to explain the development of NIEs. First, the liberal market approach considers the changing global economy as a main driving force, including the liberalization of interna- tional trade and investment. This approach focuses on the impact of free trade and market The International Encyclopedia of Geography. Edited by Douglas Richardson, Noel Castree, Michael F. Goodchild, Audrey Kobayashi, Weidong Liu, and Richard A. Marston. © 2017 John Wiley & Sons, Ltd. Published 2017 by John Wiley & Sons, Ltd. DOI: 10.1002/9781118786352.wbieg0760 mechanisms on economic development. Second, the developmental state approach focuses mainly on the strong role played by the nation-states and their adoption of policies to promote economic development. Third, the technological upgrad- ing approach is concerned with how NIEs learn and innovate to catch up with their industrialized counterparts. Although this distinction helps us to form a general picture of NIEs, it should be noted that, while these three dimensions are theoretically distinguishable, they are empirically intertwined in practice. Explanations for NIE growth The liberal market approach This approach argues that the industrialization of NIEs is closely related to the relocation of indus- trial and manufacturing sectors from advanced economies under the context of global economic liberalization. In the 1930s, trade protectionism was widely seen as contributing to economic recession, which was a major factor in provoking World War II. In 1948, the General Agreement on Tarifs and Trade (GATT) was established as the frst international governmental organization aimed at eliminating international trade barriers, followed later by the International Monetary Fund (IMF) and the World Bank (WB). Trade liberalization was later followed in the 1960s by the lifting of restrictions on interna- tional investment. Labor-intensive and routine production tasks began to shift out of industri- alized countries, initiating a further large-scale international campaign of deregulation and liber- alization of cross-border investment. Moreover,