Asia's Growth Prospects: A Report Card CHINA STRENGTHS: Will continue to dominate light and medium-tech industries because of its enormous domestic market, pool of engineering talent, and ability to keep manufacturing wages low by tapping workers from the impoverished hinterland. WEAKNESSES: Failure to reform and privatize state enterprises will hobble com- petitiveness in heavy industries and high tech. Many entrepre neurs may hit the wall without easier access to capital. Beijing's policies make it hard for non-China companies to make money. HONG KONG STRENGTHS: Will continue to thrive as the trading, financial, and management center of Greater China because of open business climate, skilled workforce, and top-rate infrastructure. WEAKNESSES: Sky-high real estate prices could hamper growth. Negligible R&D makes manufacturing vulnerable. Handover to China could weaken legal system and dull edge as media center. INDONESIA STRENGTHS: Will continue to grow in light industry due to enormous supply of cheap labor. Abundant natural resources give it an edge in oil and timber. WEAKNESSES: Heavily protected local producers of cars and electronics poorly positioned for freer trade. Low labor costs offset by red tape, corruption, and poor infrastructure. MALAYSIA STRENGTHS: Should continue as Southeast Asia's favored manufacturing and design hub for multinationals because of highly skilled workforce and attentive government. WEAKNESSES: Costs are rising twice as fast as productivity. Acute shortages of production workers and engineers are developing. Few globally competitive domestic manufacturers are emerging. PHILIPPINES STRENGTHS: Surplus of literate, English-speaking workers and engineers, and abundance of cheap land is drawing investment in electronics and auto parts. Due to open society, also rich in creative talent required for media and marketing. WEAKNESSES: Terrible infrastructure outside of Manila makes most of the country unviable as a production base. Labor-intensive assem- bly work is threatened by low productivity. Too weak in sciences to be major R&D hub. SINGAPORE STRENGTHS: Will remain a prime multinational hub because of first-rate facilities, training institutes, skilled workforce, and lack of corruption. Big government subsidies in science give it an edge in research and development. WEAKNESSES: High costs and small domestic market could curb expansion. Few indigenous manufacturers successful overseas. Rigid social controls, rote education, and limits on media hamper drive to nurture entertainment and design industries. SOUTH KOREA STRENGTHS: Giant business groups have the capital, critical mass, and engineering to compete globally in semiconductors, petrochemicals, and cars. WEAKNESSES: Fixation of big groups on commodity products hinders competitiveness in fast-changing markets like computers and software. Costs are soaring. TAIWAN STRENGTHS: Superior engineering and managerial talent and nimble manufacturers will preserve its edge in computer, telecom, and multimedia equipment. WEAKNESSES: High costs, traffic congestion, restrictions on expatriates, and lack of direct trade with China make it unlikely Taipei will emerge as a regional hub for multinationals. THAILAND STRENGTHS: Southeast Asia's most advanced production base for cars. Strong ties with leading Japanese multinationals. Sophisticated private telecom companies and a free press could position it well for media industries. WEAKNESSES: Rising wages driving out labor-intensive industries, while shortages are developing in technicians and managers. Corrupt and unstable political system makes it difficult to solve problems in infrastructure and education. VIETNAM STRENGTHS: Big pool of cheap, literate, hardworking labor ideal for light industry. Good potential for high-tech industries. Large, virtually untapped domestic markets. WEAKNESSES: Communist Party's failure to enact reforms makes foreign investment too difficult. Physical infrastructure is woefully inadequate. High taxes and corruption offset low wages. DATA: BUSINESS WEEK Return to main story

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