The rise of Asia Since WWII, growth in Asia has been explosive Asian tigers (Japan, S Korea, Singapore, Taiwan) provided one wave of development (1945-1990) Next wave of “little tigers” has stalled somewhat (Indonesia, Thailand, Malaysia) Next 20 years, though, will see Asia’s influence grow because of China and India
Current economic trends China’s liberalization: opening of economy immediately shifted FDI flows out of the rest of Asia has enjoyed annual economic growth of 8-12% since about 1980. Gross GDP could conceivably pass that of the US by 2030, most certainly by 2050. India’s Growth Stagnant for many years, primarily due to inability to break through economic reforms started growing in recent years, and could also surpass US by 2050.
Are they compatible? China China accounted for 7 percent of global merchandize exports and 6.1 percent of imports China’s manufacturing industry is 41 percent of GDP, Domestic market for goods: $1 trillion Authoritarian capitalism India India accounted for less than 1 percent of exports and imports India’s manufacturing industry is only 16 percent of GDP Domestic market for goods: $250-330 billion Democracy, but heavily state influenced economy
Post-war growth spurts Percent of world GDP (PPP) 00 44 88 12 16 11 33 55 77 99 11 13 15 17 19 21 23 25 Years since turnaround Germany China Japan South Korea Taiwan, China
Critical issues: Struggle for resources Energy: International Energy Agency warned that demand for oil imports by China and India will almost quadruple by 2030 (2007)
Environmental Degradation Worlds most polluted cities:
Other critical issues Governance Different models lead to different results Losing sight of key priorities because of national pride issues could undermine their potential Infrastructure (roads, highways, water systems, housing, etc) India’s annual investments in infrastructure between 1998 and 2005 averaged 4% of GDP compared to 8.2% for China
Asia and global power China is the only Asian country represented on the Security Council Economic growth translates into various forms of geopolitical power. Regional groupings have not been as significant as many had hoped (ASEAN, APEC, etc) Military power is as yet insufficient for anything but border issues. Asia has been largely unsuccessful in generating significant “soft power” except in limited areas.
Shares of world military spending by country 2006
Key challenges China Potential for conflict: Taiwan Demographics Floating population Aging migration India Potential for conflict: Pakistan Demographics Quickly emerging middle class Population is not slowing as rapidly, creating greater demands on resources
How does the West respond? Retreat, Resist, or Rejoice? US and Europe have shared fears, but varying policy responses. US: China policy usually debated in election years. Businesses and governments often have different reactions, as well. Overall context of globalization has a bearing on what ultimately happens.