The degree and style of capitalism in Taiwan also deserve special comment. Both Japan and South Korea have enjoyed exemplary economic development and, along with Hong Kong and Singapore, are considered among the world's outstanding examples of economic modernization. Japan and Korea, however, have far more large companies and more heavy industries than does Taiwan. Taiwan has heavy industry, but it plays a much less significant role in the economy; Hong Kong and Singapore, also high-growth countries, have almost none. In short, the role of big business and heavy industry varies considerably among these countries, as does the closeness of ties between government and business (greater in the case of Japan and Korea, less in the case of Hong Kong and Singapore).
Nevertheless, all four of the "little dragons" and Japan are major trading nations and have adopted strategies emphasizing exports and the use of comparative advantage in the world market. A strong work ethic can be found in all five, and a free market has encouraged innovation and initiative. Taxes have been kept low. Social and political stability are important goals.
Taiwan is usually considered a better model for Third World developing economies than Hong Kong and Singapore, which are little more than cities. Some also consider Taiwan a more relevant prototype than Japan, which industrialized before World War II and has the benefit of economies of scale and low defense spending--strategies most developing nations cannot implement. Finally, Taiwan is more highly regarded than South Korea because the latter's economic system is modeled after Japan's. Also, the recent economic crisis has hurt the South Korean economy badly but not Taiwan's.
Like many developing countries, Taiwan is small and is comparable to them in population, climate, and so on. Taiwan's growth has also been more recent than that of the Western industrial nations and Japan and started from a lower base. Finally, most of Taiwan's planning and economic development strategies can be used by developing nations (and they are using them, even China). Although an exact duplication may not be possible and the timing for export-led growth might not be as good as it was for Taiwan, given the present state of the world economy, most developing countries can in part replicate Taiwan's success.