Speed Intensity and the Rise of the Chinese Economies

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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.

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