Asia is a hub of world trade, it is home to some of the world’s largest companies, the fastest-growing part of the Internet, and the engine of global consumption growth. Plus it is reaching to become the world’s financial center too, Asia is Now.
In the Y 2000 I wrote a paper on this coming shift and Shayne and I have watched and been party to its happening.
Western observers and media have been talking about the rise of Asia in terms of its massive future potential for decades. But people now have to update their thinking, as the future is here and it came on fast, faster than I expected.
The Big Q is how quickly Asia will rise, it is how Asia will lead?
The common thread across the region is an upward trajectory across Key economic and social indicators.
In Y 2000 when I 1st went there on business, Asia accounted for about 33% of global GDP, and it is now on track to Top 50% by Y 2040 when it is expected to account for 40% of the world’s total consumption. Asia is making not only economic progress but strides in human development, from longer life spans and greater literacy via a dramatic rise in Internet use.
The region’s rise has lifted hundreds of millions out of extreme poverty; it has raised living standards more broadly for people of every income level. Urbanization is fueling economic growth and opening doors to education and public health services. Soon the Asian middle class will be comprised of 3.3-B people.
A recent McKinsey Global Institute study examined 71 developing economies and singled out 18 of them for consistently posting robust economic GDP growth. All 7 long-term out-performers, and 5 out of 11 recent out-performers, are located in Asia.
Several Asian countries have brought themselves into the ranks of middle-income and even advanced economies. This reflects the region’s ongoing industrialization and urbanization, its rising demand and productivity growth, and its dynamic corporate sector.
These trends represent a real shift in the world’s center of gravity.
The “Asian Century” has begun and region’s rise is not cyclical but structural.
Emerging Asia’s evolution has reached a stage that requires deep global acknowledgment about the world’s economic balance.
As consumption rises, more of what gets made in these countries is now sold locally and now being exported to the West. Furthermore, as the region’s emerging economies develop new industrial capabilities, they become less reliant on foreign imports.
Because of its diversity and geography Asia will never be the same kind of tightly integrated trade entity as the EU or NAFTA. It is a looser group of countries, trade ties with deepening cooperation across the region.
Today 52% of Asian trade is intra-regional, compared to 41% in North America. This points toward a new trend of firms building self-contained regional supply chains to serve Asian markets. It also indicates deepening trade ties among Asian countries themselves, with much more room to grow.
Among the Big Q’s:
- What kind of networks are forming across Asia, and how will they shape global trends?
- What is the role of each country?
- Which cities will be Key in the future in different fields?
- How will Asia’s evolution change the centers of influence within various sectors?
I will be addressing those Q’s in the weeks and months to come, tune in.
Have a terrific week.