changed.

Their transfer of industry was led by the direct foreign investment of the multi-national enterprises of the advanced countries and the catching-up effort of local enterprises in the late-starting countries. For the advanced countries' enterprises, lower labor costs and lower land prices were great incentives to invest in the late-starting countries since they suffered from high wages and the scarcity of land. From the viewpoint of the late-starting countries, capital and technology are scarce production factors, and, in order to take these factors from the advanced countries, governments of the late-starting countries are eager to introduce foreign investment with a variety of foreign investment promotion policies. Capital and technologies introduced from the advanced countries were utilized to the full with the efforts of local enterprises in the late-starting countries to use the capital efficiently and to acquire related techniques.

In the process of the “Flying-Wild-Geese development pattern”, the late-starting countries can realize economic growth with the help of the advanced countries' capital and technology. Through the economic growth, however, changes in comparative advantage is inevitable. Economic growth results in currency realignments and wage hikes, which may affect the competitiveness of products to be exported. The NIEs are not an exception. They are losing attractiveness for the advanced countries to invest and encountering a difficulty to get capital and technology from the advanced countries. At the same time, a massive outflow of Japanese investment to the ASEAN countries has made products of those countries more competitive and forced the NIEs products to wrestle with the ASEAN products.

In order to keep economic growth through the “Flying-Wild-Geese development pattern”, efforts to acquire technology given by the advanced countries are indispensable to make more sophisticated products than those of the countries coming up with.

3. Microeconomic Fact Findings: Development of Electric Industry in Japan, Korea and Thailand

Given the overview of the interdependent development in the East Asian economies above, we would like to make some fact-findings of the interdependence in the region by reviewing trade and investment. In order to give a clear shape to the analysis, we take up Korea to stand for the NIEs and Thailand to stand for ASEAN.

As has already been mentioned, the result of East Asian economic development clearly reflects the enhancement of supply capacity of both the NIEs and the ASEAN countries. Table 1 indicates changes in the export of manufactured products to Japan from Korea and Thailand. It can clearly be understood from the table that the share of manufactured products in the export to Japan from the both countries has been expanding steadily since the latter half of the 1980's. Increases in the exports of machine product, in particular, are remarkable.

On the other hand, it is noticeable that the significance of the ASEAN countries as a market has also been increasing in line with the improvement of the living standards of these countries. Table 2 indicates a market trend of audio visual products (A.V. product) in the ASEAN Four. Demand for A.V. products in these countries has been expanding year by year since 1986.

These economic developments are backed by the development of interdependence