Leaders | Don’t look back in Changhua How East Asia should respond to its China shock As they deindustrialise, Taiwan, South Korea and Japan must reform May 28th 2026|4 min read AMERICA’S artificial-intelligence** boom** has put the rich economies of north-east Asia into overdrive. Taiwan’s output is growing at a blistering 14% annual pace, thanks to soaring sales of chips and servers for data centres. In the past year operating profits at South Korea’s makers of memory chips have risen by over 500%. Even sluggish Japan is benefiting—though it long ago lost its title as the world’s pre-eminent chipmaker. In 2025 all three countries enjoyed record exports and current-account surpluses. The region’s export bonanza, though, obscures an important story in the rest of its economy. As we report, outside its highest-tech sectors, rich north-east Asia is deindustrialising. Strong competition from China, paired with increasing specialisation in chips, has disrupted an economic model based on a wider range of manufacturing exports—the model that helped make the region prosperous in the 1980s and 1990s. Even as it booms, north-east Asia increasingly needs reform. The ascendant assembler In the past few years China’s relations with its rich neighbours have been transformed. Once it imported high-value parts from north-east Asia and focused on low-value final assembly. Now it competes across the whole supply chain. Taiwan’s long-running surplus in goods with the mainland flipped into deficit this year, as South Korea’s did years ago (though in the past few months Korean chip exports have returned it to surplus again). In Japan the bilateral deficit with China has plumbed new depths, setting a record earlier this year. Industries from carmaking to chemicals are under intense pressure. As in the West, the perception that domestic manufacturers are competing with goods produced by subsidised Chinese firms is feeding protectionist sentiment. The specialisation in chips is an understandable development that reflects these economies’ maturity. Yet this particular focus also creates fragility. The tech-hardware cycle is notoriously volatile and its vicissitudes increasingly affect the region’s economies. The tech supply chain also relies deeply on America and China for both critical inputs and end-user demand. On an index of export-basket concentration, north-east Asia is 73% higher than the rich-world average, and concentration has risen since 2019. This leaves the region dangerously exposed to protectionism by either superpower. There is nothing wrong with specialisation, as David Ricardo would attest. However, East Asia’s rich economies would be better off if they paired their chip-export juggernauts with dynamic domestic economies. The trouble is that domestic demand is too low—a legacy, in part, of outdated economic structures that hold down consumption in order to promote exports above all else. The time has come to sweep these old systems away. Two-tier labour markets guarantee employment for insiders, often working for big exporters, while inflicting wage penalties and precarity on everyone else. Freeing up labour markets would improve the matching of workers and firms, lifting real wages. Pension systems favour staff at exporters but are stingy for others, leaving the region with some of the rich world’s highest rates of relative poverty among the elderly. Higher minimum incomes would boost aggregate spending. Taiwan has engineered a weak currency, and South Korea and Japan use the state to allocate credit. Less financial engineering would let resources flow to the firms that will use them best. North-east Asia must allow failing manufacturers to die a natural death. Support should be stopped for mighty firms such as TSMC and Samsung Electronics, which do not require lavish subsidies to compete. And although East Asian countries can hardly avoid relying on markets in America and China—the world’s two biggest economies—they can cut other barriers to trade. Some of these barriers are local. Grievances from colonial times mean that South Korea and Japan still do not have a bilateral free-trade agreement. South Korea should join the Japan-led CPTPP, a top-notch trading pact. The danger is that, spooked by the China shock, the region’s governments will instead double down on aggressive industrial policy. South Korea has promised $530bn in chipmaking subsidies and Takaichi Sanae, Japan’s prime minister, is overseeing state-led investment into 61 “strategic” goods. Using the power of the government to promote exports succeeded for these economies when they were poor and trying to catch up with the West. It is not an approach that works in places that are already rich. Doubling down on exports will leave north-east Asia poorer and more exposed. Instead, the region’s best economic bet is to become more dynamic at home and more diversified abroad. ■ 東亞應如何回應其「中國衝擊」 隨著去工業化發生，台灣、南韓與日本必須進行改革 2026年5月28日｜閱讀時間 4 分鐘 美國的人工智慧熱潮已讓東北亞的富裕經濟體全速運轉。由於資料中心所需晶片與伺服器銷售激增，台灣的產出正以驚人的年率 14% 成長。過去一年裡，南韓記憶體晶片製造商的營業利潤增加了超過 500%。即使是長期低迷的日本也從中受益——儘管它早已失去全球首要晶片製造國的地位。2025年，這三個國家都創下了出口與經常帳盈餘的新紀錄。 然而，該地區的出口榮景掩蓋了其餘經濟中的一個重要故事。正如我們所報導的，在最高科技產業之外，富裕的東北亞正經歷去工業化。來自中國的強大競爭，加上日益專注於晶片產業，已經擾亂了一種以更廣泛製造業出口為基礎的經濟模式——正是這種模式在1980與1990年代幫助該地區走向繁榮。即使正處於繁榮之中，東北亞也愈來愈需要改革。 崛起的組裝者 過去幾年間，中國與其富裕鄰國的關係已經發生轉變。過去，中國從東北亞進口高附加價值零組件，自己則專注於低附加價值的最終組裝。如今，中國已在整條供應鏈上展開競爭。 台灣長期對中國大陸維持的貨物貿易順差，今年已轉為逆差；南韓則早在數年前就出現同樣情況（雖然過去幾個月南韓晶片出口回升，又讓其恢復順差）。在日本，對中國的雙邊貿易逆差已跌至前所未有的低點，並於今年稍早創下紀錄。從汽車製造到化學工業，各產業都面臨沉重壓力。如同西方國家一樣，人們認為本國製造商正在與受到中國政府補貼的企業所生產的商品競爭，這種看法正在助長保護主義情緒。 專注於晶片產業是一種可以理解的發展，反映出這些經濟體的成熟。然而，這種特定的聚焦也帶來脆弱性。科技硬體產業週期向來波動劇烈，而其起伏如今愈來愈影響整個地區的經濟。此外，科技供應鏈在關鍵投入與最終需求方面都高度依賴美國與中國。在一項衡量出口商品籃集中度的指數上，東北亞比富裕國家平均高出 73%，而且自2019年以來集中度還在上升。這使該地區危險地暴露於任何一方超級大國所採取的保護主義措施之下。 專業分工本身並沒有錯，正如大衛．李嘉圖所主張的那樣。然而，如果東亞富裕經濟體能夠在其強大的晶片出口機器之外，同時擁有充滿活力的國內經濟，它們的處境將會更好。問題在於國內需求過低——這在某種程度上是過時經濟結構的遺留結果。這些結構壓抑消費，以便把促進出口放在首位。 現在是時候徹底掃除這些舊制度了。雙軌勞動市場保障了體制內人士的就業——這些人往往受僱於大型出口企業——卻讓其他人承受薪資懲罰與不穩定的工作環境。放寬勞動市場限制將改善勞工與企業之間的配對效率，並提高實質工資。 退休金制度偏袒出口企業員工，卻對其他人相當吝嗇，使得該地區老年人口的相對貧窮率居於富裕國家之列的高位。提高最低所得將有助於提升整體支出。 台灣一直維持疲弱的匯率，而南韓與日本則利用國家力量配置信貸。減少這類金融工程，將能讓資源流向最能有效運用它們的企業。 東北亞必須允許失敗的製造商自然退出市場。像台積電與三星電子這樣強大的企業，其實不需要慷慨補貼也能維持競爭力，因此應停止對其提供支持。 此外，雖然東亞國家幾乎無法避免依賴美國與中國——這兩個全球最大的經濟體——但它們可以降低其他貿易障礙。其中一些障礙源自區域內部。殖民時代遺留下來的恩怨意味著南韓與日本至今仍未簽署雙邊自由貿易協定。南韓應加入由日本主導的《跨太平洋夥伴全面進步協定》（CPTPP），這是一項高水準的貿易協定。 危險在於，受到「中國衝擊」驚嚇後，該地區政府反而會加倍推動積極的產業政策。南韓已承諾提供 5,300 億美元的晶片製造補貼，而日本首相高市早苗則正在監督由政府主導、涵蓋 61 項「戰略商品」的投資計畫。 當這些經濟體仍然貧窮、試圖追趕西方時，利用政府力量促進出口確實取得了成功。然而，對於已經富裕的國家而言，這並不是一種有效的方法。進一步押注出口將使東北亞變得更加貧窮，也更加脆弱。 相反地，該地區最佳的經濟策略，是讓國內經濟變得更具活力，同時讓對外經濟關係更加多元化。■ --Hosting provided by SoundOn