How Does Natural Resource Affect East Asian Economy

1. How Does Natural Resource Affect East Asian Economy By: Chun Yang, Duan Jiaxin, Youngjin Yoon

2. Agenda Part 1: Modern Part of Natural Resources Introduction: What is Natural Resources? Curse of Natural Resource? Current situation of three countries. Conclusion Part2: Future of Natural Resources Overcome of limitation Future Projection of Three Countries Technical Innovation Conclusion

3. Part1 • Modern Part of Natural Resource

4. Definition of Natural Resources Materials and Components that can be found within the environment. May Exist as a separate entity such as fresh water, and air Can also be living organism such as a fish An alternate form which must be processed to obtain the resource such as oil, metal, and most forms of energy. Human can be another type of resource

5. Curse of Natural Resources • “Resources have negative impacts on Y because nature corrupts human being therefore decrease in human K as well” • Y = f( R; K, L)

6. Japan

7. Current Situation Japan is the world’s third largest economy after the US and China. Japanese economy slowed down in 2008.

8. Resource Part about Japan • Because Japan is volcanic activity in multiple regions, so a wide variety of mineral resources buried..but in the 30 years of the Meiji Restoration, Japan had basically run out of domestic oil resources; to 100 years, Japan has run out of domestic coal resources.

9. Resource Part about Japan • Oil - production: 131,800 bbl/day (2010 est.) • Oil- consumption: 4.452 million bbl/day (2010 est.) • Oil-import:4.394 million bbl/day (2009 est.) • Natural gas - production: 3.397 billion cu m (2010 est.) • Natural gas-consumption:100.3 billion cu m (2010 est.) • japan is a resource poor country

10. Con’t • 1960-1980, For fortune 500 companies, about 50 is Japanese companies .9 car Companies, 3 oil companies, 6 energy companies.5 mechanical manufacturing companies.(http://www.fortunechina.com/fortune500/c/2011-07/07/content_62335.htm) • Heavy industries have a great contribution to the development of the Japanese economy. • energy resource also has a great contribution on japanese economy because those heavy industries were supported by energy resource

11. Economic Development after World War II • After World War II, Japan has get a lot of help by the United States, in the Korean War, the United States purchased all production made by Japan at that time, Japan's manufacturing industry has been rapid development, particularly in the electronics industry and the automotive industry.

12. Economic Development after World War II • Japan's economy is developed heavy and chemical industries rely on high energy consumption. Its energy demand growing faster than the GDP growth rate in the rapid economic growth period. From 1960 to 1970, the economic growth rate was 10.2%,annual growth rate of energy consumption was 12.5%. • (http://www.baidu.com/)

13. The Problem that Japan Face • Due to the dispute over Iran and the United States, the United States decided to sanction Iran. United states forbids other country impor oil from Iran. otherwise the U.S. will be sanctions against those country who import oil from Iran, but Iran is Japan's third-largest oil exporter,

14. The Problem that Japan Face • while Japan is an island, the security of sea lanes for Japan is related to Japanese economic stability is very important. If the Malacca Strait war is blocked, it has a bad impact on the Japanese economy

15. Con’t • Japan in order to protect the stability of the sea lanes, the Japanese established a powerful navy, • The reserves the amount of of the, Japan the National Petroleum is a rapid increase in have already from the the the the amount of 7 days to 102 days . Under the Petroleum Reserve Act, national, enterprise storage oil must be at least respectively for national consumption of 90 days and 60 days.At the end of last year, Japan's oil reserves of about 600 million barrels.(http://d.wanfangdata.com.cn/Periodical_xdrbjj200401011.aspx)

16. China

17. Current Situation China is the second-largest energy consumer (after the Us) Average annual growth rate of primary energy consumption in China was 5.5% and average GDP growth rate was 9.8% from 1978 to 2008

18. as we can see in table, China has high foreign resources dependence, especially natural resource like fuel, oil, Iron and steel. it is totally not reason to say that China is rich in natural resource.

19. Is China a poor natural resources country? • China has largest population all over the world. • China is the second-largest energy consumer (after the Us) • we can take oil reserve as an example. If China stops imports of raw materials, due to China's foreign oil dependence as much as 80%, about 90 days after the Chinese will be used to light all the oil reserves, about 30 days all the required mineral factory will cease operations, China is facing a food shortfall of 30 million tons,social will be back to the Stone Age. • some of foreign government said that China has more resource reserve than what it seems like. is that ture?

20. Rare earth resource as an example • It is estimated the world has 99 million tonnes of rare earth reserve deposits. China and United States make up 30 million (roughly 30 percent) and 13 million (roughly 13 percent) of the total reserves. • China's rare earth industry contributes 97 percent of rare mineral trade. US have already close its rare earth mine for protection • foreign country imports rare earth resource more than they demand, and put it into national reserve. And some coutries like US announce to public that China has more rare earth resource than the records. China has 30% of total rare earth reseve deposits, but China also take 97% rare mineral trade. It already become a burden for Chinese sustainable development.

21. China is poor in natural resource

22. China do not have much natural resources Since Deng Xiaoping came out "Opening Policy", Chinese economy is booming China

23. Open policy • China doesn't have so much resources and there is great population in China. • Political reason • although Chinese economic growth rate is not too low, but government defict is very high because of " Cultural revolution"

24. 200 million people under poverty line before Chinese government use "Open Policy" • China's rapid growth has pulled hundreds of millions of its people out of poverty since 1978.

25. Open Policy • From national owned enterprises only into different type of enterprises • World factory • introducing new technology from foreign • develop education • -More than 93% of the population is literate, compared to only 20% in 1950.

26. How could open policy succeed? • state owned company become private company make it possible for foreign company get into Chinese market. • Maiban-they help foreign investor to deal things in China, which make it easier for foreigner to do business in China, and it makes Chinese market very attractive • harmony and loyalty- according to the Neo- Confucianism, the worker should be loyal to company. Chinese government also give good policy to foreign company to show government's good will. • low wages in worker market. • large base of population in China.

27. However........ Is world factory a sustainable way for economy?

28. use iphone as an example

29. from iphone we can see China loss more than gainso..... REASON 1. worker's wage =>worker's wage is low in China recently, however, it will increase in the future. Once foreign do not think China is a perfect place as world factory anymore and replace it with another country. how could China survive. world factory is not the way for sustainable development

30. REASON 2: Pollution DOES IT WORTH?

31. solve this problem • develop our own technology, and get state's own brand • increase productivity by increase equilty of workers. • use new energy as the engine of the economic development in order to decrease the damages brought from industry.

32. South Korea

33. Current Situation Asia’s fastest growing and most dynamic economies. Korea has few energy resources. Imports large quantities of energy products. World’s fifth-largest importer of oil and the world’s second-largest importer of both coal and LNG

34. Korea has high level of economic growth rate Korea

35. Korean economy's key:education and technology In 1950s, Education is compulsory in Korea In 1960s, government came out " the priority task is develop economy ---1. Increase the government ability of management 2. Increase workers education level( Intellectual labour) 3. Opening policy and introduce the technology from foreign country. Saemaul undong in 1970s

36. In 1980s, Korean government make firms find way themself to develop instead of investing firms---technology innovation is the way Korean government still focus on education and technology innovation after 1980s, and Korean government use 5% of annual buget to develop new technology

37. Export Export and Industrialization are two major goal in Korean economic development. 7th in world export ranking Reason for successful export strategy ---1. Market economic system (government management) 2.Stable political environment (less conflicts) 3. Human resources ( educatioin) Decreasing dependence on export and increase import in the future?

39. =>according to Curse of Natural Resources by Carlos Leite, it is not an option => China examed this is not a long term option => Korea examed this is a choose options sell natural resource become world factory revolution education technology new energy

40. Conclusion for the Part 1 By taking a look at three countries profile, we could conclude that: Three countries are natural resources poor countries Their economic growth has been very high for the last few decades Curse of Natural resources seems right

41. Future of Natural Resources PART 2

42. Factors that matter in the future • Growing Population • Income growth • Depletion of Natural resources • Environmental problems

43. World Population 1965-2050

44. Ease of Limitation? • Environmental problems and depletion of natural resources will be reduced or slowed down by technical innovation. • We will take a look at what kind of technical innovation can be applied to this situation.

45. Japan

46. GDP & Population • Highest GDP among three countries. • Constantly grow • Population growth will decrease

47. Energy Demand • projected to grow at average annual rate of 0.2% through 2030. • primary energy intensity is expected to decrease by 22.2% over the projected period. • The overall population will decline

48. Investment on Future Technology Third in the world in total solar power Ogishima solar power plant began operations on Dec 19, 2011 in the coastal area of Kawasaki City. It consists of approximately 64,000 solar panel and generates 13,000 KW.

49. Investment on Future Technology • Introduction of electronic plug-in hybrid vehicles to the market in 2009. • The government invested 7.4 billion yen in R&D • Started testing with taxi fleets and rental cars since 2010. • Will overtake fossil-fueled vehicle in the future. • Will cost lots of money for infrastructure (eg,. charging station)

50. Charging Station in Sanfrancisco in 2009