The East Asian model (sometimes known as state-sponsored capitalism), pioneered by Japan, is an economic system where the government invests in certain sectors of the economy in order to stimulate the growth of new (or specific) industries in the private sector. It generally refers to the model of development pursued in East Asian economies such as Hong Kong, Macau, Japan, South Korea and Taiwan. It has also been used to classify the contemporary economic system in Mainland China since the Deng Xiaoping's economic reforms during the late 1970s and the current economic system of Vietnam after its Doi Moi policy was implemented in 1986.
The main shared approach of East Asian economies is the role of the government. For East Asian governments have recognized the limitations of markets in allocation of scarce resources in the economy, thus the governments have used interventions to promote economic development. Where key aspects of the East Asian model include state control of finance, direct support for state-owned enterprises in strategic sectors of the economy or the creation of privately owned national champions, high dependence on the export market for growth and a high rate of savings. It is similar to dirigisme.
Although there is the one single term which is used to describe capitalism of east Asian countries. There is not one single approach to economy of Asian countries and it widely varies in economic structure as well as development experiences among the East Asian economies. Especially then between Northeast and Southeast Asian countries. (e.g. Malaysia, Indonesia and Thailand relied much more on FDI (Foreign direct investment) than Taiwan or Singapore)
This economic system differs from a centrally planned economy, where the national government would mobilize its own resources to create the needed industries which would themselves end up being state-owned and operated. East Asian model of capitalism refers to the high rate of savings and investments, high educational standards, assiduity and export-oriented policy.
East Asian countries saw rapid economic growth from the end of the Second World War to the East Asian financial crisis in 1997. For instance, percentage annual average growth between 1970-96 was 3-5% in China, Hongkong, Taiwan, South Korea and Singapore. Within this period developing of The East Asian countries were growing three times more than was the rate of growth of the world economy. Hence those countries attract most of foreign and private capital inflows into those countries. During this period east Asian countries also achieved dramatic reductions in poverty; the greatest example is Indonesia, where the percentage of people living below the official poverty line fell from 60% to 12% between 1970 and 1996. Further, Indonesia's population increased from 117 to 200 million. Equally impressive is the growth of real wages between 1980 and 1992, with average wages in newly industrialised Asian countries increasing at a rate of 5 percent a year, whereas at the same employment in manufacturing increased by 6 per cent a year. In conclusion the growth period in the East Asian countries saw a large improvement in the overall standards of living.
Behind this success stands as was mentioned above export oriented economy which has brought high foreign direct investment and greater technological developments which caused significant growth of GDP. Big companies like LG, Hyundai, Samsung etc. were successful due to huge government support and its intervention into bank sector in order to direct banks to give credit to big companies. The governments in those countries were crucial in controlling trade union, provision, justice and also in providing the whole infrastructure (road, electricity, good education etc.). All this just made these countries more attractive for foreign investors. Along investors Asian countries got foreign aids from the West (especially from the United states of America in order to discourage communism as a Cold War Containment policy) and get better access to the Western markets.
"Eight countries in East Asia-Japan, South Korea, Taiwan, Hong Kong, Singapore, Thailand, Malaysia, and Indonesia-have become known as the East Asian miracle." Beside successes of the East Asian economy mentioned above in the Success of the model, there are 2 another example why they are called Asian miracle.
Besides many secondary actors in bringing out a crisis (such as a property price bubble, macroeconomic mistakes or a fall in a rate of growth of experts) the core of the crisis was in The East Asian model itself. The over-investment, misallocation of foreign capital inflows (Big corporations getting money from each other, whether investment was sufficient or not) and other problems in the financial sector. Another side of the government-controlled market were massive corruption, which was due to close relationship between government and business. This so called "crony capitalism" (which means influence of government and businessmen) led to crisis of confidence in the economies, firstly in Thailand and then other Asian countries drive into financial crisis in 1997. Because of the crisis GDP and export collapsed, unemployment went up, also inflation and as result all of this the governments accumulated huge foreign debt. 
South Korea: Due to government interventions such as directed credits, regulations, explicit and implicit subsidies, the market had lack of discipline which has contributed to the problem of unproductive or excessive investment which has contributed in causing crisis.
Thailand: Political connectivity with the market have led to giving a priority to political affair at the expense of the economic decisions. For instance, delaying the implementation of necessary policy measures due general election in November 1996. In this and other cases, special interest has often influence on the allocation of budgetary resources and other public policy actions.
Overall in a number of countries, there were inadequate disclosure of information and data deficiencies, direct lending. In general, there has also often been a lack of transparency in policy implementation, for example decisions with regards to public infrastructure projects and ad hoc tax exemptions.
In order to manage crisis and repay debt East Asian countries asked International Monetary Fund and World Bank for economic aid.