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China is certainly impressed by some of the NIEs' succes- ses. Its process of "pragmatic reforms" since 1978, led by the goal to allow for more flexibility in its system, has probably the imprints of some of the NIEs' successes. There may occur successive extensions of more micro- capitalistic islands (modelled along the lines of the NIES) within a macro-socialist system. The NIEs may be also able to serve increasingly as a connecting link between China and the outside world.
The Soviet Union is showing a growing interest in the Asian region. Not only, because positions which the Council for Mutual Economic Assistance (CMEA) members are losing on Western markets in fact are mainly lost to the Asian NIEs. But also and even more, because economic inputs from the NIES, which are well suited to serve the CMEA countries with sturdy, cheap machinery for their overdue economic reforms, are virtually inexistent. (although Korea seems to have developed some interest in the Soviet market recently).
Technological achievements are also remarkable. In microelectronics the American-Japanese semiconductor agreement has provided the NIES - and not the European producers - with windfall profits that have allowed them to rapidly increase their market share. Thus, Korea alone has captured a world market share for D-RAM chips of between 7-12%, equal to the volume of the European production. Furthermore, the three Korean producers Samsung, Goldstar und Hyundai are preparing the production of leading-edge technology 4 Megabit D-RAM chips, after having started in Summer 1988 with the mass production of 1 Megabit chips.
2. Structural adjustment
External economic pressures to domestic employment is only
related to a minor part to the NIEs. It arises from a broad
array of regional, global and technological sources. Thus, a
new understanding has won ground, underlining the advantage of
greater international interdependence in place of stressing the threats to domestic employment.
Considerations based on international trade and technological
advancements strongly support a quest for a flexible
structure-oriented policy towards the NIE's:
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International trade
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