City-States in the Global Economy: Industrial Restructuring in Hong Kong and Singapore

City-States in the Global Economy: Industrial Restructuring in Hong Kong and Singapore

City-States in the Global Economy: Industrial Restructuring in Hong Kong and Singapore

City-States in the Global Economy: Industrial Restructuring in Hong Kong and Singapore


This is the first serious comparative study of two dynamic Asian city-states that are emerging as key regional- indeed global- cities. Providing both historical comparisons and analyses of contemporary issues, the authors consider the patterns, strategies, and consequences of industrial restructuring. They build their analysis around the interrelationships of four institutional spheres: the global economy, the state, the financial system, and the labor market. This leads to a unique emphasis on the distinctiveness of individual NICs, as opposed to much of the literature in the field, which tends to group these Asian dragons together as a single, undifferentiated case. The book addresses three basic sets of questions tied to industrial restructuring in Hong Kong and Singapore: First, what are the basic patterns of restructuring in the two economies? What corporate strategies have manufacturers used to restructure their operations? Are Hong Kong and Singapore diverging or utilizing the same restructuring strategies? Second, how should the process of restructuring in the two economies and the concomitant similarities or divergencies be explained? Third, what are the consequences of the restructuring process for the two economies? How are these processes shaped by the shared histories of Hong Kong and Singapore as colonial port cities, their current status as NICs "squeezed" between industrialized western societies and the Third World, and their role as important regional cities in East and Southeast Asia?


Despite being small city-states, Hong Kong and Singapore's positions in the global industrial economy are more important than those of many larger countries. This book presents a systematic comparative analysis of how these two economies, sharing fairly similar histories, have come to develop very different paths to industrialization.

Research on East Asian economies has now settled into clear disciplinary and conceptual boundaries: statist, free market, neo-modernist, and international political economy approaches. Our argument, instead, is to suggest that history and institutions matter, and that more systematic insights can be derived by analysing the development paths countries take. the institutional approach we adopt requires us to part company with a substantial portion of the East Asian development literature which has tended to treat Singapore, Hong Kong, Taiwan and South Korea as a single, undifferentiated case--the "dragons of Asia."

By moving away from the East Asian Development Model and focusing on Hong Kong and Singapore, we build our analysis around the interrelationships of three institutional spheres: the state, the financial system, and the institutions of industrial relations. We look at the institutional configuration of industrial development in the two city-states and analyse how they have followed different "logics" and paths in industrial restructuring. At the level of firms, we focus on the electronics and garment industries and demonstrate how corporate strategy in the two city-states are influenced not only by the nature of markets and characteristics of the particular industries, but also by the different institutional environments in Hong Kong and Singapore. We show in the last chapter how this comparative analysis allows us to address issues central to the development literature as well as specific problems, issues and consequences of economic restructuring for Hong Kong and Singapore.

This book grew out of a research collaboration initiated and funded by the East-West Center (Hawaii, United States). We are grateful to Won-Bae Kim and Gordon Clark for their leadership and encouragement. To the members of the "Industrial Restructuring and Regional Adjustment in the Asian NIEs" project team--Gordon Clark, Won-Bae Kim, Jung-Duk Lim, Sam-Ock Park, Ching-Lung Tsay--thanks for five years of collaboration.

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