The Little Dragons

This critique of the notion of the “Little Dragons” – Taiwan, Singapore, South Korea and Hong Kong – started as a seminar paper and became part of my thesis, and has finished its journey as part of my book on Taiwanese identity coming out in 2006. When I was growing up in the 1980s, the idea of the Asian Tigers, or Little Dragons or Tiger Economies etc etc was so much a part of my imagining of Asia and of Australia’s place in it. We were encouraged to look to North East Asia and their export-driven, free market miracle economies as models to avoid becoming a “Banana Republic”, as the Treasurer famously put it in 1986. But the discourse of the Little Dragons is totally historically specific, created out of the 1979 Latin American debt crisis, and yet has informed socio-economic policy for successive governments in Australia (and elsewhere) until the present day.

The development narrative has become part of one of the most powerful narrative structures for understanding Taiwan. Like other forms of meaning, it is a way of “knowing” about Taiwan which produces its identity, with its status as a “hyper-growth” or “miracle” economy operating as an alternative discourse of identity to that of Chinese or Taiwanese nationalism. It can be summarized by the term “the Little Dragon”, although there were a range of related terms: the Tiger economy, the Asian Tigers or the NIC’s, the Newly Industrialized Countries.

The discourse of the Little Dragon and its variants redrew the boundaries of identity in East Asia. It grouped Taiwan, South Korea, Hong Kong and Singapore together as “hypergrowth” economies, sharing a common experience of modernization, rather being distinguished by their different cultures, languages, politics or histories. In this way, The Little Dragon was not a national concept, or indeed necessarily specific to a single nation’s history. In terms of Taiwan’s identity formations, the Little Dragon narrative set Taiwan apart from China very clearly. Economics, and liberal free-market economic regimes, became the primary categories and concepts for defining the Little Dragons, and they grouped Taiwan with the other dragons on the basis of economic growth, thus establishing a different basis from China’s for imagining its identity.

Thomas Gold’s book, State and Society in the Taiwan Miracle, placed the development narrative, the “miracle”, at the heart of his version of Taiwan’s social, political and economic identity. Even earlier, the Canadian economist Roy Matthews wrote a study of the importance of East Asia development for Canada in 1983 which used the term “Little Dragon” to refer to Taiwan.1 In perhaps one of the best known elaborations of the term, also discussed earlier2 , Ezra Vogel’s The Four Little Dragons presented a clear example of Taiwanese identity as one of the “little dragons”.

In Taiwan itself, it was the period leading up to and after the lifting of martial law in which the Little Dragon theme was fully embraced as a narrative of Taiwanese identity, as a part of the flood of new writing on post-war Taiwanese history. Liu’s piece appeared in 1987, and in 1989, the Taiwanese economist Wang Zuorong published Women ruhe chuangzao le jingji qiji (How We Created the Economic Miracle)3, which detailed the successful application of strategic industry assistance and a neo-liberal economic regime of low taxes and low government spending. Gao Xijun’s 1990 book Taiwan Jingyyan Sishinian (Forty Years of the Taiwan Experience) referred explicitly to Taiwan as one of the Four Little Dragons or Si Xiao Long.4

Although the Little Dragon discourse can be connected to the “Build Taiwan” slogan of the KMT, it has a specific genealogy. It is an umbrella term for a complex group of ideas about East Asian development that arose in the 1980s in the discourses of business, economics and government policy, both in the West and in parallel in some of the Asian nations involved, and was deployed across the boundaries of scholarship, government policy, analysis and journalism.

The significance of the term in the context of Taiwan is the way it structures Taiwanese historiography. The historical condition it expresses is one of emergence or ascendancy. It puts in place a group of related oppositional concepts at either end of an historical process of transformation: traditional/modern, agricultural/industrial, village/urban, family or group/individual and as the term is applied, becomes a relatively uncritical valorization of progress from the pre-modern to the modern. It also implicitly separates the smaller East Asian nations, including Taiwan, from the two “Big Dragons”, China and Japan, establishing a hierarchy of development with Japan at the top and China at the bottom. China, the “sleeping dragon”, would, when woken, be the biggest dragon of all. Therefore, the Little Dragon idea provides a conceptual basis for defining Taiwanese identity as something distinct from China, with a fundamentally different kind of history. It does so outside of nationalism using an objective basis for knowledge about the Taiwanese historical experience.

The idea of Taiwan as a “miracle” can be located within a general theme of the transformation to modernity in non-Western countries. In the context of Asia, Japan presented the prototype in its modernization after the Meiji Restoration, and in particular after Japan’s victory in the Russo-Japanese War in 1905. The American essayist Randolph S. Bourne, writing in the Atlantic Monthly in 1916 about the challenge to American nationhood of World War One made reference to “The spectacle of Japan’s sudden jump from medievalism to post-modernism.”5 The contemporary version of the idea of miraculous transformation for Japan reemerged at the end of the 1960s after a sustained period of very rapid economic growth. The British newspaper the Financial Times readmitted Japan to the club of western nations in 1970 in a patronizing paragraph, showing a “flexible, positional superiority”6 which seemed to forget the scale and technological sophistication of Japan’s military machine only three decades earlier: “her latest massive stride has brought her abreast of the least affluent of the advanced countries of western Europe – Italy and Ireland, for example … and it will not be long before she catches up with countries like … Britain and Belgium.”7

When the Financial Times wrote this about Japan in 1970, the four countries that became the Little Dragons were still included in the category of “developing countries”. In scholarship, policy analysis and international relations, Taiwan, South Korea, Hong Kong and Singapore were just part of a group which included countries in Latin America, South East Asia, southern Europe and sometimes Africa. They were not exemplars of an Asian Way8 of development but were part of the Third World, separated from the West and the Communist bloc. The category of developing countries was a function of the Cold War, with the West and Communism offering alternative and competing paths to development.

A key site for the elaboration of the discourse of the developing country was the academic discipline of development economics. In the late sixties, a so-called “new orthodoxy” emerged in the field to explain the industrialization of countries like Taiwan, the Philippines, Brazil and Mexico9 in terms of the application of a liberal economic regime. This work is especially associated with the work of Bela Balassa and Simon Kutzets, and the group known as the “Chicago Boys”, the University of Chicago trained economists who directed the neo-liberal economic reforms in Chile from 1973 to 1989.10 Neo-liberal development economics focussed on the growth of export-driven trade that followed on from policies of import substitution, strategic industry assistance and large-scale public infrastructure programmes, as well as increasing human capital through education and a flexible labour market, high domestic savings rates, and so forth.11

In a way fairly typical of development economics, Samuel Ho summarized Taiwan’s development policies in the following ways:

Starting in 1958, it began to search for a new approach to industrialization, and in the early 1960s the new strategy took shape. It is probably best described by the government’s new slogan ‘Developing agriculture by virtue of industry, and fostering industry by virtue of foreign trade.’ Basically the aim was to liberalize controls and to turn the economy increasingly towards external trade. To implement this, the government initiated reforms to eliminate some of the wastes and discriminatory aspects of its import-substitution program, and at the same time introduced new programs which actively encouraged exports.12

As Clark argued in the late 1980s, Taiwan was not a classical example of a neo-liberal model, but showed a combination of free market and central planning in its economic and policy characteristics.13 But although development economists may have argued about the specific characteristics of Taiwan’s economy14, in the terms being argued here, it was the spectacular rates of economic growth which became the “truth statement” of Taiwan’s development in the post-war era. Taiwan has become an exemplar of a non-Communist state achieving economic development while maintaining social stability. Indeed, in the terms of development economics, Taiwan really was the model state which the KMT had envisioned in 1950.

The notion of a specifically and uniquely East Asian model of socio-economic development, distinct from other developing economies in Latin America and elsewhere, was crystallized in the early 1980s when the collapse of world commodity prices and rising interest rates in the western lender nations sent many of the Latin American economies into crises of spiralling debt and hyper-inflation.15 The failure of those economies served to separate out Taiwan and the other Dragons from the developing economies of Latin America as exemplars of the success of neo-liberal development economics. In the literature from 1980 onwards, development economics ceases to include the East Asian developing economies with the Latin American or southern European, and instead imagines them together as a coherent group with common characteristics.

The economic success of Taiwan and the other Asian tigers, also coincided with the various crises for left-wing governments in the West. Since the early 1970s, populist conservative writers like Peter Drucker had been promoting East Asian economic growth as not merely a model for other developing countries but also for western nations.16 At the beginning of the 1980s, the shifting of the political mood in the West away from the social democracy and welfarism toward policy regimes promoting free-market economic policies, exemplified by the 1979 Conservative government in Great Britain and the Reagan administration in the US, gave the region and its model for economic success an audience outside of its original economic sub-discipline.

As the “hypergrowth” economies entered their fourth decade, East Asian development acquired the quality of a powerful global historical trend that took hold in popular imaginations beyond academia and governments. The Western writing on East Asia in the 1980s is redolent with the tensions of threat and triumph that Japan and the Little Dragons were seen to represent, especially in the context of painful economic restructuring in the West and then the dissolution of the Soviet Union. Vogel states this idea very baldly with respect to Taiwan:

The industrial transformation that had taken western nations and Japan a century, or even longer, was completed in Taiwan in essentially four decades … The society had been largely rural in 1949, but at the end of the next four decades nearly half the population was living in the metropolitan areas of Taipei, Kaohsiung and Taichung, and most of the rural population had been linked to nearby urban areas and transformed by urban culture.17

The pop futurologist, John Naisbitt, in his Megatrends Asia: Eight Asian Megatrends That Are Reshaping Our World makes a similar point with even greater hyperbole: “South Korea, Taiwan, Singapore and Hong Kong have revolutionized the theory of economic development by showing the world how to skip over much of the industrialization phase and plunge into the information economy.”18

Apart from popular and academic writing, the ideas that circulated around the Little Dragons exerted an influence on government policy-making at the highest levels. In Australia perhaps more sharply than any other Western country, the Little Dragons discourse was a component of a reimagining of Australian identity as part of Asia. The peak of that movement came with the publication of the report to the Prime Minister in 1989 by Ross Garnaut, Australia and the North East Asian Ascendancy. Garnaut’s report treated East Asian development as both offering a neo-liberal policy model which could reasonably be applied to Australia, as well as creating economies which were the target markets for Australia’s own export-oriented trade in manufactured products and services. Like East Asia, sustained economic growth could be achieved by liberal economic regimes focussed on exports, and the export market was East Asia itself.19

Garnaut’s analysis also recalled the earlier Financial Times commentary about Japan, with a similar reference to relative levels of socio-economic advancement: “Australia cannot and need not aspire to emulate the rapid growth of Northeast Asia in recent decades [because] much of the superlative growth performance has reflected ‘catching up’ technologically, in a way that Australia is too far advanced to emulate.”20

This opinion was countered vigorously by the Singaporean government with a conservative moralistic variation on the miracle economy idea in which development could be achieved without the social problems of the West. In 1997, the Permanent Secretary of the Singaporean Ministry of Foreign Affairs, Kishore Mahbubani, gave a speech provocatively titled “Can Asians Think?” He argued yes because of the spectacular post-war economic achievements of the Little Dragons, and looked “beyond” the Western model of modernity:

Today Asians can still see the plateau of contentment that most western societies rest on but they can also see, beyond the plateau, alternative peaks that they can take their societies to. Instead of seeing the plateau as the natural end destination, there is now a desire to bypass the plateau (for they do not wish to be afflicted by some of the social and cultural ills that afflict Western societies) and to search for alternative peaks beyond.21

Garnaut’s comment is a useful summary of the teleology of modernity within the Little Dragon discourse. In their claims to a sweeping historical trend, academics like Garnaut and Vogel and writers like Naisbitt took a fairly narrowly defined and argued body of work in development economics and used it to make a much larger point about modernity and global history. The term Little Dragon came to cover a very wide range of ideas about the trajectory of Asian societies in the post-war period starting with economics and spreading to the social and even civilizational realm. The discourse of the Little Dragon remained underpinned, and limited, by the notion of the “hypergrowth economy” but in the examples cited above, referring to “‘catching up’”, “industrial transformation”, “skip[ing] over … the industrialization phase”, and “see[ing], beyond the plateau” it conflated the notion of economic growth with that of a social transformation from a pre-modern society to a modern, or even post-modern, one.

When development economics formed the basis of a broader socio-economic discourse of Taiwan’s experience of modernity as a Little Dragon, its limitations became problematic. The complexity and richness of modernity, as covered in the work of Berman22 or Calinescu23, for example, is expressed in the language of economic statistics and policies. The loss of tradition, the growth of the city as a social experience, with its fluid social relations and dynamism, is described as the growth of manufacturing, labour market flexibility and spending on “human capital”, and this is a limited basis for imagining a Taiwanese identity.

As well as losing the richness of social life in Taiwan, by subsuming a broad understanding of modernity under “hypergrowth”, the Little Dragon discourse distorts Taiwanese historiography. In the first instance, it compresses the experience of modernity for the Taiwanese into the post-war period. Vogel’s description quoted above is an example of this. In the logic of the Little Dragon, the period before hypergrowth, a “largely rural society”, which really means before modernity, becomes a period without history, and imagines a people without a sense of a national or modern identity, in the way theorized by Anderson. Similarly, in Fei, Ranis and Kuo’s Growth With Equity: The Taiwan case, they acknowledge a colonial legacy, but begin Taiwan’s modern history in 1953, as “the initial year of its transition”24 when it entered the “first subphase of transition growth, common to virtually all developing countries, [of] primary, or first stage, import substitution.”25 Yet this attenuates the possibility of understanding the late imperial, Japanese colonial and Republican periods as a continuous narrative of social and economic change. In Vogel’s assertion, for example, that the “industrial transformation that had taken western nations and Japan a century, or even longer, was completed in Taiwan in essentially four decades”26, there is little room for an understanding of Taiwan’s social development occurring as a continuous process over the whole 20th century and earlier.

Therefore, the Little Dragon discourse overdraws the transformation in Taiwanese society. The post-war era becomes the beginning of history, the point from which the changes in Taiwanese society narrate their experience of modernity. The post-war period becomes characterized by modern forms of social relationships and a modern subjectivity. The Taiwanese have become modern, like “us”, and as Vogel tries to argue, this transformation is compressed into an extremely short history, becoming like “us” in only forty years.

The forgetting of the past in the discourse of the Little Dragon exposes the way knowledge of Taiwan has been politically structured by the institutions of scholarship. Development economics relies on statistics of economic development, which in the context of Taiwan have been dominated by those from the KMT government and the process of economic reform sponsored by the US government through the JCRR.27 Therefore, the political break of Retrocession and the Nationalist’s loss in the civil war is replicated by scholarship on its economy. New policies, a new field of development economics, the West and the Communist bloc struggling for dominance over the developing world in the Cold War, all come together to start the Taiwan miracle in 1949 rather than the modernization programs at the end of Qing or the 1920s under Japan. When this narrow basis of knowledge is expanded into the historical trend of the Little Dragon, it becomes hegemonic, constructing a narrative which attenuates Japanese colonialism and Taiwanese imperial history. It produces a trajectory of social development which both validates Western liberal beliefs of historical progress and also, in the case of Taiwan, the KMT’s version of a Taiwanese history which began in 1949.

Nevertheless, even despite its methodological limitations, the Little Dragon discourse remains a durable one. In Kishore Mahbubani’s attempt to critique the idea, quoted above, he did not attack its epistemological foundations, but stayed within its conservative and Western-centric orbit: Mahbubani could only conceive of “overtaking” the West along the same trajectory, not dealing with the problematic assumptions of the whole Asian miracle discourse.

Through the 1990s, the Little Dragon narrative added other nations in South East Asia, notably Malaysia, which embarked on a development program that explicitly sought to emulate the achievements of the tigers in North East Asia. The notion of hypergrowth, with all of its attendant assumptions about modernity, came to an abrupt end in 1998 with the Asian economic crisis. The seeds of decline had been recognized earlier: Emmott’s The Sun Also Sets: the limits to Japan’s economic power28 appeared in 1989, followed up by his Japanophobia: The Myth of the Invincible Japanese29 in 1993, and both anticipated structural economic problems limiting “hypergrowth” in the Japanese context. In 1992, Bello and Rosenfeld’s Dragons in Distress: Asia’s Miracle Economies in Crisis made similar arguments about poor financial regulation, rising wages, and US protectionism undermining the East Asian economies, some of which was proven valid at the end of the decade. By then, the Dragon narrative was less relevant to Taiwan. Other, Taiwan-specific themes, such as democratization, had overtaken the notion of the Little Dragon to offer new narratives for Taiwanese history.

1. Roy Matthews, Canada and the “little dragons” : an analysis of economic developments in Hong Kong, Taiwan, and South Korea and the challenge/opportunity they present for Canadian interests, (Montreal: Institute for Research on Public Policy, 1983).

2. see p. 55.

3 Wang Zuorong, Women ruhe chuangzao le jingji qiji (How We Created An Economic Miracle) (Taipei: Shibao wenhua chubanshe, 1989).

4. Gai Xijun and Li Cheng, Taiwan Jingyan Sishinian (Taipei: Tianxia Wenhua Chuban Gufen yu Xiangongsi, 1991), 7.

5. Randolph S. Bourne, “Trans-national America,” The Atlantic Monthly Vol.118, No.1 (July 1916): 88.

6. Edward Said, Orientalism, 7.

7. Japan Miracle ‘70: business guide to the world’s third economic power, prepared by the Financial Times, ( Harlow: Longman, 1970), viii.

8. Alan Dupont, “Is there as ‘Asian Way’?,” Survival Vol.38, No.2 (Summer 1996): 13-33.

9. Ian Malcolm David Little, Tibor Scitovsky and Maurice FitzGerald Scott, Industry and trade in some developing countries: a comparative study (London: Oxford University Press, 1970).

10. Eduardo Silva, “Capitalist Coalitions, the State, and Neoliberal Economic Restructuring: Chile, 1973-88,” World Politics Vol. 45, No. 4 (July, 1993): 541-2.

11. The East Asian Miracle: economic growth and public policy, A World Bank policy research report. (New York: Oxford University Press, 1993), 17-19.

12. Samuel P.S. Ho, “Industrialization in Taiwan: recent trends and problems,” Pacific Affairs Vol. 48, No.1 (Spring, 1975): 228.

13. Cal Clark, “The Taiwan Exception: Implications for contending political economy paradigms,” International Studies Quartery Vol.31, No.3 (Sept. 1987): 328.

14. see for example, John Brohman, “Postwar Development in the Asian NICs: Does the Neoliberal Model Fit Reality?,” Economic Geography Vol. 72, No. 2. (Apr., 1996): 107-130.

15. Carlos F. Diaz-Alejandro; Paul R. Krugman; Jeffrey D. Sachs, “Latin American Debt: I Don’t Think We are in Kansas Anymore,” Brookings Papers on Economic Activity Vol. 1984, No. 2 (1984): 335.

16. Peter Drucker, “What we can learn from Japanese management,” Harvard Business Review vol. 49, no .2 (March-April 1971): 110-122.

17. Vogel, 38-9.

18. John Naisbitt, Megatrends Asia: Eight Asian Megatrends That Are Reshaping Our World (New York: Simon & Schuster, 1996), 12.

19. Ross Garnaut, Australia and the Northeast Asian ascendancy : report to the Prime Minister and Minister for Foreign Affairs and Trade (Canberra: Australian Government Public Service, 1989), 21-2.

20. ibid., 47.

21. Kishore Mahbubani, Can Asians Think?:Understanding the Divide Between East and West (Singapore: Times Books International, 1998), 24-25.

22. Marshall Berman, All That Is Solid Melts into Air: The Experience of Modernity (London: Verso, 1983).

23. Matei Calinescu, Five faces of modernity: modernism, avant-garde, decadence, kitsch, postmodernism (Durham: Duke University Press, 1987).

24. John C. H. Fei, Gustav Ranis and Shirley W. Y. Kuo, Growth With Equity: The Taiwan case (Oxford: World Bank, Oxford University Press, 1979), 26.

25. ibid., 26.

26. Vogel, 38.

27. see, for example, Ezra Vogel, The Four Little Dragons, 116 n.1 and 2.

28. Bill Emmott, The Sun Also Sets: The Limits to Japan’s Economic Power (New York: Times Books, 1989).

29. Bill Emmott, Japanophobia: The Myth of the Invincible Japanese (New York: Times Books, 1993).