01
金正日选对了接班人
提到上述，因为三月二十五至二十八日，朝鲜的金正恩夫妇与习先生夫妇在北京的会面，与四月二十七日金正恩与文在寅的会面，场面感人，大家表现出的友情没有导演可以导得出来。中谚说相逢一笑泯恩仇，这不对，因为习、金、文这三位之间从来没有什么仇恨，只是与他们三位无干的历史包袱加在他们的身上，他们一下子就把这包袱弃如粪土，潇洒利落，让我看到要站起来。
可能因为我从来没有见过金正恩与他太太的应酬亮相，这次见到我十分欣赏。他思想敏捷，反应快，决策果断。是好是坏是另一回事，是对是错也是另一回事。我不由得想，金正日是选对了接班人。
说起来，我们的习先生也是那样的一个人。不是今天才这样说。五年前，习上任不久，我在北京讲话，讲后有一位同学问我对习先生怎样看，我说一九八六年十二月在厦门鼓浪屿习先生请我和太太进午膳，谈了两个小时，认为这个人有自己的思想，所以对中国的前景要看好一线。我那次讲话有记录，今天应该还可在网上找到。可惜事后的发展我不容易看好，而作为一个学者，不能说假话，要批评的我多次批评了。批评得有点婉转是礼貌上的需要。我可能说错，但我不能说自己不相信的话。
02
制裁制出一个经济学者
说起来，我自己在学问上的进取与朝鲜是有点关联的。一九五四年，朝鲜战争结束后不久，因为没有学校收容，我转到父亲在香港永乐街二十号的文来行学做生意。是父亲的要求，但他也要求我要找机会继续求学。那时朝鲜战争虽然结束，但严厉的禁运（今天称制裁）依然存在。因为禁运，当时集中于永乐街的西药进口商一律赚大钱。我父亲的商店也是个受益者。从事电镀要用的原料进口与销售，当年的禁运让父亲的商店赚了不少钱。主要是电镀必用的一种名为镍的金属的进口，一条一条的，称镍条。三块多港元一磅进口价，因为禁运而炒高到四十多元。
我父亲的文来行为什么可多赚钱呢？因为是老字号，拿得出当时香港的电镀厂家的最终用者（end user）的证明，可以在限量下获得镍条进口的批文。当时整个香港只有我们一家是正规的——当年我为这些批文跑香港的工商署，所以知道。其他偶尔在市场见到的镍条怎样进口就不清楚了。
一九五七年，镍条进口的管制还在，但放宽了一点。这放宽空出了另一个较为容易的途径。当年举世的镍金属皆产自加拿大，为了要跟加国的产镍商考虑转用较为容易的途径，我在该年的七月三十一日坐船十八天到旧金山，再转坐火车五天到加拿大的多伦多。是简单的洽商，只两天就得到加方同意采用新法，但当时还没有什么长途电话，飞机飞不到那么远。
洽商好镍条运到香港的新方法，我想起父亲谢世前对我说的一番话，决定留在北美求学。在多伦多旁听了一些中学课程，学得几句英语，以超龄的资格进入了洛杉矶加州大学。那时我快二十四岁，比同学年长六岁，急起直追，一九八二年回港任教职时，我在美国作正教授已经十三年了。当年没有谁会想到，朝鲜受到外间的制裁，某程度上是从一九五〇年制裁到今天！
03
也制出一枚原子弹
我不怀疑一个小国受到制裁会受到损害，但制裁这回事，我们可没见过一个事与愿同的例子。朝鲜的经验，是制裁制出一个人造卫星，一大批火箭，与不知若干个核弹。不管我们是否同意金正恩这样做，我们不能不承认他是有着了不起的才能。看看伊朗吧。这个地球上的产油第三大国，钱够多，尝试了多年也不能把核弹造出来。
今年六月十二日，在新加坡，金正恩将会见美国总统特朗普。特总统说会协助朝鲜的经济发展。我认为朝鲜不要选走昔日日本的路，何况金正恩是个不食嗟来之食的人。他应该提出两项合理的要求。其一是不要干预朝鲜的经济发展，其二是要让朝鲜的产品免税进口美国。这些是合情合理的要求。只要美国免了朝鲜货的进口税，世界的贸易秩序就会改变了。
04
香港的经验可教
我肯定地这样说，因为想到上世纪七十年代的香港。当年香港的人口五百万（今天朝鲜二千五百万），人才不怎样了不起（六十年代的动乱，不少精英离港，换来不少来自大陆的偷渡客），但成衣、玩具、手表、假发、塑料花等五六项产品，其产量在国际上皆占了鳌头。算不上是顶级货，但在重要的成衣那项，因为香港供应量大，西方引进配额制度，香港的成衣就变为顶级了。这是经济学中的需求定律使然，我为文解释过。
论人口的劳动力，今天的朝鲜是昔日的五个香港。论工人的质量，今天的朝鲜胜当年的香港。我们要知道朝鲜是地球上唯一的没有文盲的国家。他们造得出火箭、卫星、核弹之类的产品，不是孩子们的玩意，而这些年到过朝鲜旅行的几位朋友，一律说该国的地方清洁、民众守纪律。不要误会，我不是赞同这样的生活，不认为那样的制度可以培养出像我这种喜欢独自魂游因而创意来去纵横的人。但说到在工厂操作产出，这样的民族与文化有其可取处。若干年前我跟一位在美国研究朝鲜文化的学者谈及朝鲜这个民族，他说朝鲜人是善于不知死活地拼搏。我希望金正恩在大事开放后会尽量宽容，让人民享受市场经济的多彩多姿。
05
把地球一体化推入正轨
我也希望金正恩不会在朝鲜开放后就转向从事高科技产品。造得出火箭与核弹，他们当然有资格问津高科技。然而，民以食为天，朝鲜应该先向国际庞大市场的日用制造品进军。五个昔日香港加起来的势头会是一个现象，国际现有的贸易秩序会改变，而地球一体化的历程会因为这生力军的参与而增加了速度。今天收入微不足道的朝鲜民众，在起步的头几年其人均收入增长每年将超越百分之五十！这类推断我从来不错，只是局限的转变要依我在上文指出的。
越南、印度等今天人均收入高出朝鲜的会遇到一点麻烦。我认为不到五年朝鲜的人均收入会超越这些国家。外资的涌进当然首推韩国，继而是中国与日本。中国的制造行业当然也会受到影响，但有坏的与好的两方面。坏的一方面是好些传统的制造行业会受到冲击。好的一面是今天大骂中国廉价产品导致美国贸易逆差过大的美国，会因为朝鲜产品杀进美国市场而再骂不出口。大抽中国洗衣机的进口税有什么用呢？质量相若的朝鲜洗衣机可能只有中国产出的六折之价。美国要朝鲜放弃核武吗？胆子再大，没有谁会在美国设小型洗衣机厂。
可幸这些年在高科技的产品上中国发展得有看头，但劳动工资只有中国一半或以下的地区，会很不好过。这是地球一体化的必经之路，而朝鲜参与竞争是把这一体化加速了。不久前美国逾千经济学者联手出信，反对特朗普的进口税观。他们是说经济学有一个比较优势定律，美国不要背此定律而行。朝鲜大事参与国际产出竞争，会明确地证实违反这定律的保护政策是愚蠢的。
是的，朝鲜的开放将会改变国际贸易的秩序。从正确的经济学衡量，小小的朝鲜是要把这秩序推入正轨。若如是，给金正恩一个诺贝尔和平奖吧！
如何从贸易理论的专业角度透视贸易战，是这门课程的核心。
过去几十年，我们一直认为，中国的比较优势是廉价的劳动力，而美国的优势则是高科技及资本。
我们中国出口廉价的商品给美国，既是现实的选择，也有理论支撑，那就是李嘉图的比较优势理论。
我们认为，当我们出口廉价商品累计到一定财富后，我们的产业会自动升级到具有新技术、高科技的高级产业，这是一个水到渠成的事情。
事实上，我们在某些产业已经获得了这样的成功。
例如家电、手机产业，中国过去依靠代工掌握了产品生产工艺及技术，如今中国的家电、手机产品已经做到全球领先并销往世界各地。
然而，华为事件似乎给了我们闷头一棒，让我们突然明白了我们中国在芯片、发动机等众多核心技术领域依然被美国人、日本人卡着脖子。
于是，我们又开始大力搞科技创新，希望打破国外的技术封锁。值得深思的是，这里面还有一些深层次的经济规律，并没有被我们所察觉。
过去四十年，中国不少企业已经完成了原始资本的积累，但却极少有公司将赚来的钱投入到高科技的研发。
造成这个现象有很多原因，一是中国房地产、互联网等行业具有很强的赚钱效应，这些行业吸引了大量的社会资本进入。
另外还有一个更重要的原因，进入信息社会、知识经济时代之后，大多数高科技行业已经形成垄断之势，多数中国企业只能望而却步，甚至不愿意在这方面做任何的技术积累。
在搜索引擎、操作系统、浏览器、通用芯片、互联网协议、编程语言等方面，美国公司已经占据了绝对的统治地位。
中国互联网公司放弃这些领域，而更愿意投资诸如滴滴打车、拼多多这些大众消费市场，以流量、大数据之名上市圈钱获利。
这并不只是中国公司的选择，强如日本、德国、英国也都已经默认了美国在信息产业的统治地位。
随着信息技术的外溢，日本原有的电子产业也遭遇了毁灭性的打击，曾经风靡一时的日本电子手表、电子游戏机以及家电产品，基本上退出了全球竞争的行列。
如果你去了谷歌公司，或者参观了特斯拉美国工厂，你会对德国、日本以及美国通用、福特的汽车产业感到担忧。未来，在智能驾驶、无人驾驶领域，美国很可能又会形成绝对的垄断之势。
我们将视野往外扩大，智能流水线以飞快的速度革新，日本、德国、美国在工业机器人领域的领先优势，很可能会转化为整个工业制造的绝对优势。
到那时，美国、德国、日本所生产的任何工业产品，都可能比中国便宜，当我们丧失了劳动力优势后，又该如何是好呢？
事实上，美国公司已经统治了全球农业领域。我们很多人可能从来没有想过，全球的粮食居然会被美国几家公司所控制。
目前，中国是全球最大的粮食进口商，而美国则是最大的粮食出口商。我们中国的大豆和玉米大量依赖从美国进口，这可是影响着我们每一个人饭碗的大事。而决定这一切的，正是美国先进的农业生物技术。
未来的知识经济时代，或许将不存在我们今天所说的劳动密集型产业、资本密集型产业，所有产业都将是技术密集型产业，一旦某个国家无法在某个领域建立技术上的绝对领先优势，可能其国内本领域的市场很快就会被其他国家所占领并垄断。
如果一个国家没有任何的绝对技术优势，那么等待它的将是被赶下全球化这趟高速列车。这就是为什么有些国家在全球化中途下车，为什么有些国家会反对全球化。
知识经济时代，技术的统治力比过去的资本、稀有资源都更强，这是技术的外部性所决定的，经济学历史上，里昂惕夫最早发现这种规律。
经济学家阿罗、克鲁格曼使用技术的外溢效应，对我们提出了严重的警告，掌握技术的绝对优势，比所谓的相对优势更可靠，这就是亚当·斯密曾提出过的绝对优势理论。
李嘉图的相对比较优势理论统治了整个工业时代的国际贸易市场，如今随着技术的发展，亚当·斯密的理论开始回归，技术的绝对优势更加适应于知识经济时代的国际竞争。
在很多领域，当美国人确立了技术标准并建立技术垄断优势之后，或许其他国家唯一能做的就是等待，等待技术迭代时候的到来，在技术升级的过程中抢占先机，彻底颠覆过去的技术并取而代之。
然而，从1970年代算起，信息技术发展已经接近半个世纪，美国的信息技术统治地位依然无可撼动。
因为底层技术的迭代，远远比我们想象的更缓慢。更为重要的是，正如经济学家阿罗所言，技术革新来自技术的积累，没有任何积累，又如何迭代呢？
如今，我们国内大多数私人企业，都不愿意在高科技领域做更多的积累，毕竟这在当前来说是不赚钱的买卖啊，这该怎么办呢？
技术进步另一股力量来自国家推动，但现实中以国家力量来推动技术进步因其低效而被广为诟病。
另一方面，这一行为甚至遭到国际挑战。美国就一再指责中国利用国家行为搞中国制造2025，制造芯片和大飞机，认为这种行为违反了市场规律，不利于市场的公平竞争。
市场不愿意投资做技术研发，依靠政府则既低效又给美国人留下口实，这又该如何是好呢？
回顾最近半个世纪的全球历史，我们发现，只有日本、韩国这两个国家，真正从丑小鸭变成了白天鹅，国内产业从劳动力密集型，成功转型升级为技术密集型，从而加入了发达国家的朋友圈。
I have never been involved in any political activity in my life, and I don't know politicians any better than the people on the street. However, every four years in the us presidential election, I like to browse on TV. Certainly not as appreciative as Lin shanmu, Yang huaikang and others -- I'm not even a modern movie person today -- but the American media is well versed in turning the excitement of a presidential campaign into entertaining coverage. Sometimes I think that the enormous expense of a presidential campaign in the United States may be more than offset by the entertainment benefits of media coverage.
01
Kim jong il has chosen his successor
As mentioned above, the meeting between the Kim jong UN couple and Mr. Xi and his wife in Beijing on March 25-28 and the meeting between Kim jong UN and moon jae-in on April 27 was so moving that no director could have directed the friendship between them. This is not right, because xi, Kim and wen have never had any animosity with each other, but the historical baggage they had with them was put on them, and they threw it away like dirt all at once.
Perhaps because I have never seen Kim jong UN and his wife in public, this meeting I really enjoyed. He is quick-thinking, quick-thinking, and decisive in his decisions. Whether it is good or bad is another thing, and whether it is right or wrong is another thing. I cannot help thinking that Kim jong il has chosen the right successor.
Speaking of which, our Mr. Xi is also such a person. Not today. Five years ago, shortly after xi took office, I made a speech in Beijing. One of my classmates asked me what I thought of Mr. Xi. I said that in December 1986, Mr. Xi invited my wife and I to lunch in gulangyu island, xiamen. I have a transcript of that speech, which I think is still available online today. Unfortunately, I am not easy to look at the development after the event, and as a scholar, can not lie, to criticize me many times. It is polite to be polite in criticism. I may be wrong, but I can't say what I don't believe.
02
Sanctions produce an economist
My own intellectual drive, by the way, has something to do with north Korea. In 1954, shortly after the end of the Korean war, I transferred to my father's liberal arts school at 20 wing lok street, Hong Kong, because there were no school shelters. It was my father's request, but he also asked me to find an opportunity to continue my education. That was when the Korean war ended, but a strict embargo (today called sanctions) remained in place. Because of the embargo, all the importers of western medicine in yongle street were making a lot of money. My father's shop was also a beneficiary. Engaged in the import and sale of materials for electroplating, the embargo that year made my father's shop a lot of money. Mainly electroplating will use a metal called nickel imports, a, called nickel strip. More than three Hong Kong dollars a pound import price, because of the embargo and inflated to more than 40.
What can my father do to make more money? Because it is an old brand, we can get the certificate of the end user of the electroplating factory in Hong Kong at that time, and we can get the approval of the import of nickel bar in limited quantity. We were the only family in Hong Kong that was accredited -- I knew that because I had run for these approvals to the commerce and industry department in Hong Kong. It is not clear how other nickel bars, which are occasionally seen on the market, are imported.
In 1957, controls on the import of nickel bars were still in place, but they were relaxed a bit. This liberates an easier alternative. All the nickel in the world was produced in Canada, and in order to consider an easier way to switch with the Canadian nickel producers, I took a 18-day ferry to San Francisco on July 31, and a 5-day train to Toronto, Canada. It was a simple negotiation and only two days later Canada agreed to adopt the new law, but there were no long-distance phone calls and planes could not fly that far.
After negotiating a new way to ship the nickel bars to Hong Kong, I remembered what my father had said to me before he died and decided to stay in North America to study. Audited some high school classes in Toronto, learned a few words of English, and qualified for the university of California, Los Angeles. At that time, I was nearly 24 years old, six years older than my classmates. I had been working as a full professor in the United States for 13 years when I returned to Hong Kong in 1982. No one would have thought that north Korea would be subject to external sanctions, to some extent from 1950 to today!
03
An atomic bomb was also made
I do not doubt that a small country can be harmed by sanctions, but we have not seen a single case of sanctions going the same way. North Korea's experience has been to sanction the production of a satellite, a large number of rockets, and an unknown number of nuclear bombs. Whether we agree with Kim jong UN or not, we have to admit that he has great talent. Look at Iran. The third largest oil producer on the planet has enough money to try for years to build a bomb.
On June 12, Kim will meet with U.S. President Donald trump in Singapore. President trump said he would help north Korea's economy. I don't think north Korea should choose to follow Japan's path, and Kim jong UN is a man who refuses to accept alms. He should make two reasonable demands. One is not to interfere in north Korea's economic development, and the other is to allow north Korean products to be imported into the United States duty-free. These are reasonable demands. As long as the United States waives import duties on north Korean goods, the world trade order will change.
04
The experience of Hong Kong can be taught
I say this with certainty because I think of Hong Kong in the 1970s. The population of Hong Kong was 5 million (today's north Korea is 25 million), and the talent was not so great (during the turmoil of the 1960s, many elites left Hong Kong in exchange for many stowaways from the mainland), but the production of clothing, toys, watches, wigs, plastic flowers and five or six other products, all ranked the first in the world. Not exactly top-of-the-line, but in the case of the important garments, because of the large supply in Hong Kong and the introduction of quotas in the west, Hong Kong garments became top-of-the-line. This is the law of demand in economics, which I explained to you.
In terms of population and labor, today's Korea is the five Hong Kong of the past. In terms of the quality of its workers, today's Korea is superior to Hong Kong. We should know that north Korea is the only country on earth without illiteracy. They make rockets, satellites, nuclear bombs and the like, not children's stuff, and a few friends who have traveled to north Korea over the years all say the country's places are clean and its people disciplined. Don't get me wrong, I'm not in favor of this kind of life, and I don't think that kind of system can produce people like me who like to wander alone and get creative. But when it comes to operating output in a factory, such peoples and cultures have their merits. A few years ago, I talked to a scholar of Korean culture in the United States who said that north koreans are good at fighting hard. I hope Kim jong UN will be as tolerant as possible after the opening up of the event, so that the people can enjoy the colorful market economy.
05
Put earth integration back on track
I also hope that Kim jong UN will not turn to high-tech products after north Korea opens up. If they can build rockets and nuclear bombs, they are certainly qualified for high technology. However, food is the order of the day, and north Korea should first move into the world's vast market for everyday manufactured goods. The five former Hong Kong's combined momentum will be a phenomenon, the existing international trade order will change, and the process of global integration will be accelerated by the participation of this new force. Today's paltry north koreans will see their per capita income grow by more than 50 percent a year in the first few years. I've always been right about this kind of reasoning, but the shift is limited by what I've pointed out above.
Vietnam, India and others with incomes per head higher than north Korea today will have a bit of a problem. I think within five years the per capita income of north Korea will surpass those countries. The influx of foreign capital began, of course, in South Korea, then in China and Japan. China's manufacturing sector will certainly be affected, but in both bad and good ways. The bad news is that many traditional manufacturing industries will suffer. The good news is that the United States, which today raves about China's cheap products and its huge trade deficit, will stop exporting north Korean products as they flood the American market. What's the point of slapping import duties on Chinese washing machines? Similarly good north Korean washing machines can be as much as 40% off the price of Chinese ones. Does America want north Korea to give up its nuclear weapons? No one is going to set up a small washing machine factory in America.
But thanks to China's impressive development in high-tech products in recent years, areas where wages are half or less than China's can be tough. This is the only way to integrate the earth, and north Korea's competition has accelerated this integration. More than a thousand economists in the us have written a letter opposing Donald trump's view on import taxes. They are saying that there is a law of comparative advantage in economics, and that the United States should not break it. North Korea's participation in a major international competition for output would clearly confirm the folly of protection policies that violate this law.
Yes, the opening up of north Korea will change the order of international trade. By the right economic measure, little north Korea is trying to get the order back on track. If so, give Kim jong UN a Nobel peace prize!
How to view a trade war from the professional perspective of trade theory is the core of this course.
For decades, we've argued that China's comparative advantage is cheap labor, while America's advantage is high technology and capital.
Our Chinese exports of cheap goods to the United States are both a practical choice and supported by the theory of ricardo's theory of comparative advantage.
We believe that when we export cheap goods to a certain amount of wealth, our industry will automatically upgrade to advanced industries with new technology, high-tech, this is a natural thing.
In fact, we've had that success in some industries.
For example, in the home appliance and mobile phone industry, China used to master the production process and technology of products by OEM. Now, China's home appliance and mobile phone products have reached the global leading position and are sold all over the world.
However, the huawei incident seems to have given us a head start and made us suddenly understand that China is still stuck with the americans and Japanese in many core technologies such as chips and engines.
Therefore, we began to vigorously engage in scientific and technological innovation, hoping to break the technological blockade of foreign countries. It is worth pondering that there are some deep-seated economic laws, which have not been detected by us.
Over the past four decades, many Chinese companies have accumulated raw capital, but few have invested the money they have earned in high-tech research and development.
There are many reasons for this phenomenon. First, China's real estate, Internet and other industries have a strong money-making effect, which attract a lot of social capital.
In addition, there is a more important reason. After entering the era of information society and knowledge economy, most high-tech industries have formed a monopoly, and most Chinese enterprises can only stay away from, or even are not willing to do any technological accumulation in this respect.
American companies already dominate search engines, operating systems, browsers, general-purpose chips, Internet protocols, programming languages and more.
Chinese Internet companies have given up on these areas, preferring to invest in mass consumer markets such as didi dache and pinduoduo to make money by going public in the name of traffic and big data.
This is not just a choice for Chinese firms. Japan, Germany and Britain have all acquiesced in America's dominance of the information industry.
With the spilt of information technology, Japan's old electronics industry has suffered a devastating blow, with once-popular Japanese electronic watches, game consoles and home appliances largely out of the global race.
If you go to Google or visit a tesla factory in the us, you will be worried about the auto industry in Germany, Japan and gm and ford in the us. In the future, in the field of intelligent driving and unmanned driving, the United States is likely to form an absolute monopoly.
As we expand our horizon, the intelligent assembly line is being innovated at a rapid pace, and the leading advantages of Japan, Germany and the United States in the field of industrial robots are likely to translate into the absolute superiority of the whole industrial manufacturing.
By then, any industrial product produced in the United States, Germany, or Japan will probably be cheaper than China's, and what will we do when we lose our labor advantage?
In fact, American companies already dominate global agriculture. Many of us probably never thought that the world's food would be controlled by a few American companies.
China is now the world's largest importer of grain, while the us is the largest exporter. We in China are heavily dependent on imports of soybeans and corn from the United States, which is a major issue affecting the livelihood of every single one of us. It is America's advanced agricultural biotechnology that determines all this.
The future of the knowledge economy era, perhaps we would not exist today labor-intensive industries, capital-intensive industries, all industries will be technology-intensive industry, once a country is unable to establish technology in certain areas on the absolute leading edge, may be its domestic market in the field of this will soon be taken over by other countries and monopoly.
If a country does not have any absolute technological advantage, it will be kicked off the high-speed train of globalization. That's why some countries are getting off the road in globalization, and why some countries are going against it.
In the era of knowledge economy, the dominant power of technology is stronger than the capital and scarce resources in the past, which is determined by the externality of technology. In the history of economics, leontief first discovered this rule.
Economists arrow and krugman use the spillover effect of technology to give us a serious warning that the absolute advantage of technology is more reliable than the so-called comparative advantage, which is the theory of absolute advantage put forward by Adam Smith.
Ricardo's theory of comparative advantage dominated the international trade market in the whole industrial era. Now with the development of technology, Adam Smith's theory began to return, and the absolute advantage of technology is more suitable for the international competition in the era of knowledge economy.
In many areas, after the United States has established technological standards and established a technological monopoly, perhaps the only thing other countries can do is wait, wait for the iteration of technology, get a head start in the process of technological upgrading, upend and replace the technologies of the past.
However, since the 1970s, the development of information technology has been nearly half a century, the dominance of information technology in the United States is still unassailable.
Because the iteration of the underlying technology is much slower than we thought. More importantly, as the economist arrow said, technological innovation comes from the accumulation of technology. How to iterate if there is no accumulation?
Nowadays, most of our private enterprises are unwilling to do more accumulation in the high-tech field, which is not a profitable business at present. What should we do?
Another force for technological progress is the state, which in practice has been blamed for its inefficiency.
On the other hand, the practice has even been challenged internationally. The United States has repeatedly accused China of using state action to make made in China 2025, chips and large aircraft, saying such action violates market rules and is not conducive to fair competition.
What if the market is unwilling to invest in technology and relying on the government is both inefficient and gives americans an excuse?
Looking back at the past half century of global history, we find that only two countries, Japan and South Korea, have truly changed from ugly duckling to white swan. Their domestic industries have successfully transformed from labor-intensive to technology-intensive, thus joining the circle of friends of developed countries.