A major question today on the minds of business leaders, politicians and the general public with regard to the Chinese and Asian Tiger boom, is how long can it last? To answer this question we need to first go back and look at why the Asian
economies have grown so fastover the last few years.There was mean many debates about the causes of the Asian Tigers rise to pre-eminence in the world economies and there conclusions about the fundamental cause of this phenomenal
growth is very mixed. There have been arguments that the discipline of Confucius in business economies gave Asian countries a more enduring strength or that "Asian values" were the reason.In this article in the BRW a more economic argument was put forward and it is this agrument that will be explored in this short piece. The fundamental drivers of an economy are workers and money, they are combined to create output, which when sold for a profit creates wealth. By side stepping the debate about labor eficiency we can then look more concretely at the money or
capital part of the equation.
High domestic savings rate, some as high as 30% of GDP provide the Asian economies with levels of domestic capital Western nations can only dream of. The application of this capital from savings has created the bulk of the growth
rate increases of around 8%. If there is then a leson for the West from this growth it must be to increase its savings rate. For the argument woudllead us to the conclusion that China with its large labor force and high savings rate is simply following in the well trodden path of earlier Asian Tigers, abate with must bigger foot prints due to its size. Indeed India is starting to develop its productivity due to the same savings led growth. The obvious conclusion from this article must be that with China and India adding to the general Asian growth the rate, there seems to be a very strong case that - the Asian
wave is far from over
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