Washington, April 26 (CNA) Taiwan and South Korea are the only two countries that have managed to grow their economies at an annual pace of more than 5 percent uninterruptedly over the past half-century, making them gold medalists in terms of global competition, according to an investment maven at Morgan Stanley, the renowned New York-based global financial services firm.
"South Korea and Taiwan are the gold medalists of global competition, because their economies continued to grow at a rapid pace even after they grew rich, when the scale and difficulty of the challenge becomes much more daunting," Ruchir Sharma, head of the Emerging Markets at Morgan Stanley, wrote on the CNN website.
With per capita incomes higher than US$20,000, the five-decade booms in Taiwan and South Korea are "arguably more impressive than the now much more famous 30-year boom in China, where per capita incomes have just recently surpassed US$5,000," Sharma said in the article posted on CNN's Global Public Square website.
The emerging markets investment strategist pointed out that both Taiwan and South Korea have achieved continued growth mainly due to their expertise as manufacturing exporters.
However, Sharma went on, there appears to be a gap developing between the two, with South Korea pushing ahead phenomenally.
In 2006, he wrote, the total value of the South Korean stock market outpaced that of Taiwan for the first time, and it is now considerably larger, at US$1 trillion versus US$700 billion.
"The main reason is that, to a surprising degree, Taiwan makes its money from small and globally unknown companies that manufacture parts for PCs that run on Windows and Intel chips -- a niche so narrow that the Taipei stock market has been out of favor for years now," Sharma wrote.
In contrast, he noted, South Korea's corporate giants have been much more visionary and ambitious.
Major South Korean companies have become global leaders in industries as diverse as shipbuilding, petrochemicals and construction, and have created the first major global brands to rise from an emerging market, such as Hyundai, Samsung and LG, Sharma wrote.
Normally, he continued, manufacturing stops growing as a share of the economy when a nation hits a per capita income of US$10,000, but South Korea is 15 years past that barrier and manufacturing continues to expand as a share of GDP.
"This unique manufacturing juggernaut cannot continue forever, but it can continue for the foreseeable future -- five to 10 years," Sharma predicted.
(By Jay Chou and Sofia Wu)