(FORTUNE Magazine) – JAPAN blazed the export trail. But soon a new group of champions came roaring down that path -- Singapore, Hong Kong, Taiwan, and South Korea. Now a second pack of Asian nations is carving out a growing share of global markets for products ranging from toys to auto parts. Thailand, Malaysia, Indonesia, and the Philippines are the members of this rising generation. Though all are gaining ground, only Thailand is certain to achieve the status of newly industrializing country (NIC) in the next decade. But Malaysia has a good shot. And even the Philippines and Indonesia should continue to take impressive strides in the right direction. The chief advantage of Asia's potential NICs is their huge supply of cheap and relatively well-educated workers. Unlike their resource-poor predecessors, though, today's aspiring powers are also rich in oil, natural gas, minerals, and productive farmland. The real difference is that while their forerunners prospered by exporting to the U.S., the newcomers are mostly doing business with their better-off Asian neighbors. To offset rising currencies and wages at home, companies from Japan, South Korea, and Taiwan are transferring capital, factories, and technology to the upstarts. Says Akira Koyama, president of Mitsubishi's subsidiary in Thailand: ''Our companies come here with a ready market and are exporting like hell back to Japan.'' Matsushita now builds window air conditioners in Malaysia. The Koreans and Taiwanese are gearing up to manufacture television sets, garments, and sunglasses in Indonesia. If the current pace continues, trade within the region will soon surpass that with the U.S. and Canada. This increasingly integrated and dynamic market offers big opportunities for savvy U.S. and European companies. American Standard makes labor-intensive ''sanitary fixtures'' -- toilets and sinks to you and me -- in Thailand and exports them to other Asian countries, including Japan. By next year the company's Thai factory will be second in size only to its main plant in Ohio. A few Southeast Asian entrepreneurs are starting to export capital as well as goods. Last summer Unicord of Thailand, a longtime supplier to American tuna-canner Bumble Bee Seafoods, bought its former customer for $269 million. Mantrust, a privately owned Indonesian conglomerate, has acquired Van Camp Seafood and now ships Chicken of the Sea brand tuna from Bali directly to American supermarkets. Only a trickle now, this stream of East-to-West investment should swell in the 1990s. Thailand, in particular, boasts the kind of energy, confidence -- and traffic jams -- you'd expect to find only in more advanced industrial states. Says Supachai Panitchpakdi, executive adviser to the Thai Military Bank and a former deputy finance minister: ''Until recently, everyone thought of us as a sanuk ((pleasure-loving)) country rather than as a hardworking country.'' With most of Thailand's 55 million citizens still living a rural life, factories can attract workers with wages of just $117 a month. This eager young work force underpins Southeast Asia's most diverse economy. Along Bangkok's crowded streets, plants making precision ball bearings or leather seats for BMWs are next to sidewalk tailors pumping old treadle Singer sewing machines or peddlers hawking realistic counterfeits of Gucci bags. An entire industry is devoted to gluing together broken cashew nuts with vegetable paste. (Shippers get paid more for whole nuts than for broken ones.) South of the city, the government has just completed a $1 billion petrochemical complex that will draw on Thailand's plentiful supplies of natural gas to fuel a growing plastics industry. Unified by a popular monarchy and by Buddhism, the Thais have so far avoided the social unrest that rapid industrialization often spawns. The kingdom's unbroken history of independence has also left it with no colonial hang-ups about foreign investment. Prime Minister Chatichai Choonhavan is encouraging Thai companies to seek trade and investment deals in neighboring Cambodia and Vietnam to help these impoverished countries change ''from a battlefield to a marketplace'' (see box). The one thing that could choke off Thailand's growth is its increasingly inadequate infrastructure. A recent study by the Bangkok Bank lists the problems -- shortages in everything from roads and ports to telephones and electricity -- and warns that until they are fixed, ''NIC status will continue to elude us.'' The kingdom's fiscally cautious government appears to be getting the message. Within the next two years, new deepwater ports in the Gulf of Siam will absorb much of the river traffic that now clogs Bangkok. Some foreign investors who might have settled in Thailand are heading for Malaysia because it has better roads and harbors and more abundant electric power. Also, after years of ambivalence toward outside capital, the Malaysians are actively seeking it. Rising investment by Japanese and American semiconductor manufacturers has made Malaysia the world's third-largest producer of semiconductors. The key ingredients that go into these products, such as silicon wafers and other components, are imported, of course. But the business of assembling them is worth some $523 million a year to Malaysia. AS THE WORLD'S largest producer of rubber and palm oil, Malaysia has long been hostage to sharp swings in world commodity prices. To reduce that vulnerability, Prime Minister Mahathir Mohamad first made a money-losing foray into heavy manufacturing led by state-owned industries. Chastened by that failure, Mahathir now says he wants private enterprise and investment to drive Malaysia's economy. Malaysian businessmen are finally confident that their erratic government will stick to this new, pragmatic path. Says Tan Hoe Pin, deputy managing director of Tan Chong & Sons Motor Co., an assembler of Nissan cars: ''Malaysia wants to open up. The government realizes that it got too involved in business, and a lot of money went out of the country.'' Indonesia is also transforming itself from a sluggish state-dominated economy into a lively exporter of manufactured goods. For years this nation of 188 million people scattered across 13,700 islands prospered from rising oil and gas revenues. But after oil prices plunged, Indonesia found itself in hock to foreign lenders for nearly $53 billion. Left with no choice but to try to improve the business climate, President Suharto, 68, who has ruled the country for over 20 years, acted swiftly on his technocrats' advice. The government is reforming its notoriously corrupt tax- collection and customs systems. It has eliminated many import monopolies that enriched a few influential people. Indonesia's financial markets have also been opened more widely to foreigners (see Money & Markets). Says Ali Wardhana, a top government economist and a member of a group known as the ''Berkeley Mafia'' after the California university that educated them: ''Declining oil prices were a blessing in disguise. They forced us to make our economy more efficient.'' Indonesia has become a far less forbidding place for foreign investors. The government approved $4.4 billion of new projects in 1988 and expects to okay even more this year. Dunlop Slazenger International, a British firm, makes tennis balls in central Java. America's Freeport-McMoRan Copper Co. is spending $550 million to expand its copper and gold mining operation in the remote West Irian region. Still, old habits die hard. Sanyoto Sastrowardoyo, the official in charge of approving foreign ventures, keeps an American visitor waiting an hour because 20 Indonesian army generals have dropped by for advice on their postretirement careers. The army remains the most influential force in Indonesia. Says James W. Castle, who runs a business consulting firm in Jakarta: ''This place takes patience, but it is still light-years ahead of China.'' The same could be said of the Philippines, which is showing strong signs of recovery after a decade of mismanagement. Since 1987 the economy has expanded at a 6% annual rate. The threat of a coup, a serious worry for the first 18 months after President Corazon Aquino took office, has receded. Says Washington SyCip, the Manila management sage (see Managing): ''The perception that the Philippines is politically unstable, which bugs the West, hasn't been shared by Asians for some time.'' Taiwan's companies are the biggest foreign investors, committing $132 million so far this year. Drawn by labor costs one-eighth those back home, the Japanese are investing again -- an estimated $100 million in 1989 alone. Headaches, such as erratic telephone service and on-and-off electricity, remain. Says Terumasa Endo, a Japanese executive with Shemberg Marketing, a manufacturing and trading firm on the island of Cebu: ''The Philippines has many corners, and it has not yet turned them all.'' But three decades ago South Korea also looked like an economic basket case. Today Korea (with an average urban family income of $9,200) has the biggest middle class in Asia outside Japan and churns out computer memory chips and personal computers that rival its American or Japanese competition. By sticking with its present policies, Southeast Asia's journey from tuna to high-tech could prove almost as rapid.