China and the concept of “speed intensity”

The remarkable growth of China and before that Taiwan and Hong Kong was based on exports. This much is clear. The nature of these exports is however worth looking at more closely.

A recent World Economy paper puts Asian growth in context by considering the concept of “speed intensity”. This makes a lot of sense.

The demand for fast and disposable fashion in the West has lead to need for cheap goods that can be made quickly to hit the shops shortly after the catwalk shows.

Speed Intensity and the Rise of the Chinese Economies

Kelly B. Olds 1

National Taiwan University

ABSTRACT

Producers of speed-intensive goods, e.g. clothing or electronics, face markets that are in constant flux due to changing fashion or technology. Throughout the twentieth century, Chinese business networks have had a comparative advantage in producing speed-intensive goods due to their quick reaction time. This comparative advantage was of relatively little value prior to the Second World War, but since the war, international telephone and air services have made international trade in speed-intensive goods practical. This has caused the demand for speed-intensive goods on the international market to grow at an extremely rapid pace. This growth in demand can explain the post-Second World War economic booms experienced by Hong Kong, Taiwan and finally China.


Originally published at China Economics Blog and reproduced here with the author’s permission.

One Response to "China and the concept of “speed intensity”"

  1. John Furse   June 9, 2009 at 3:46 am

    Anyone interested in our future needs to understand the workings of the Chinese economy.