Book Review: Evolution in Asian business

The current global crisis is a display of Asia's new structural strength, and has accelerated the shift of economic and financial power from the West to the East.

The East Asian miracle - as heralded by the World Bank in 1993 - was a period when East Asian countries steadily enhanced their role in the world economy and opened up enormous trade and investment opportunities. Led by Japan, they created a unique model of capitalism much different from the West, characterized by state-led industrial growth, dominance of family-owned conglomerates - or corporate shareholders in Japan - with weak corporate governance and a family-like pattern of labor relations. The 1997/98 Asian financial crisis put an end to the region's "economic miracle" - exposing the weaknesses in its Japan-inspired model of capitalism and making the need to implement far-reaching change evident.

Asia's Turning Point: An Introduction to Asia's Dynamic Economies at the Dawn of the New Century presents a panorama of the Asian economies from after the 1997/98 crisis right up to the current period. A comprehensive introduction to the economies of Asia at the turn of the millennium, the book examines the critical forces that are shaping the Asian business and economic environment, covering topics such as the role of the state and government-business relations, corporate ownership, governance and management, labor markets, employment, entrepreneurship, innovation and financial problems, as well as regional integration and a number of specific sub-regional issues.

After the Asian crisis, its countries began to reform their economies to adapt their systems to global standards to regain the economic foothold in the region and globally. It was an inflection point that brought Asian capitalism much closer to the capitalist system established in the West: growth no longer became predominantly government-led as the state began to curtail its policies of promoting and protecting strategic industries and domestic companies, while encouraging the latter to be self-reliant and competitive.

Asian companies began to boost their profitability, diversify and disperse corporate ownership through the inclusion of more "outside" non-family investors - largely foreigners - and establish workable corporate governance systems. Labor relations shifted away from a paternalistic pattern toward a market-based, contractual relationship - paving the way for labor flexibility and performance-based evaluation.

The first part of the book looks at the East Asian miracle in retrospect, discusses the region's new pattern of growth after the turn of the century and then focuses on its major structural transformations: of state, businesses and labor relations.

Then it analyzes regional integration and the prospects for the East Asian community. In the second part, every chapter discusses the latest trends and developments in a particular national economy. A wide range of 14 national economies is presented: China, the four tigers, the ASEAN-4 of Malaysia, Thailand, Indonesia, and the Philippines, as well as Vietnam, North Korea, the Russian Far East, India and finally Japan.

Asia's Turning Point is unique in its range of issues and the scope of national economies it covers. At one and the same time, it is a treasure trove of information for business people, policy makers and researchers; a textbook for universities and business schools, an analytical publication with an innovative conceptual framework, and a fascinating non-fiction reading.

(China Daily 06/22/2009 page5)