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Asia and the World in the Asian Century

A progressive renaissance began in Asia, with the recovery of Japan after World War 2, following by the rise of the Newly Industrialized Economies of Hong Kong, Korea, Singapore and Taiwan. A “flying geese” pattern of development has continued with the success of some other ASEAN economies, and China and India. However, Asia’s share of the global economy remains still around 30%, despite the region being home to 60% of the world’s population. Asia has the potential of continuing its convergence towards the levels of development of the advanced OECD economies, and perhaps during the 21st century regaining a share of the world economy equal to that of its share of the world population. This has led many observers to argue that this century will be the "Asian Century", following on from the preceding American and British Centuries. This course will explore issues related to the promise of an Asian Century, challenges for realising an Asian Century and how Asia's renaissance is changing relationships between Asian countries, as well as the region's relationship with the rest of the world.

1. Introduction to course


Overview of course.

Course Format:

This course is structured around a blend of lectures, Youtube videos, student presentations, and class discussions.

Grading:

Two four-page (1000-2000 words) papers -- 33% each.

-- First paper -- how much progress has Asia made in its “development”? Due Monday 16 July.

-- Second paper -- China and India look like becoming Asia's great powers. Please assess both their progress and prospects for the Asian Century. Due Sunday 29 July.

Class presentation (6 minutes), and participation in class discussions -- 34% of grade.

Student presentations will take place on Thursday 12 July. Students can choose either of the following topics:

-- social media and/or the sharing economy in Asia's development; and

-- role of youth in the realisation of an Asian Century.

There will be no final exam.

Topics covered will include:

1. Introduction to course and Overview of Asian Century hypothesis.

2. Assessing Asia's developmental progress

3. Some aspects of human well-being in Asia

4. Economic catchup in Asia.

5. Asia's global value chains.

6. Student seminar on social media and development

7. Focus on Japan.

8. Socially inclusive development

9. Asia's demographic dilemmas and migration

10. Urbanisation in Asia

11. Student seminar on role of youth

12. Focus on China

13. Democracy in Asia.

14. Focus on India

15. Focus on Korea

16. Focus on Southeast Asia and ASEAN

17. Well-being and happiness in Asia

18. Future of peace in Asia


Today's class.

What do we mean by the "Asian Century hypothesis"?

Asia has always had the world's largest population, and for much of history it has also had the world's largest economy. But in the 19th century, Asia slipped back and the West became the world's economic and political leader. Then, following the end of World War 2 and the Korean War, Asia began an economic renaissance. This took the form of a "flying geese" pattern, starting with Japan, then Hong Kong, Korea, Singapore and Taiwan (the "Newly Industrialising Economies), followed by Indonesia, Malaysia and Thailand, and then China, India, and Vietnam.

The 21st century could become an Asian Century if Asia continues being the fastest growing region in the world economy. The region has enormous catchup potential.

The 21st century could also belong to Asia if, in some decades time, Asia manages to have the world's biggest economy. This is very possible, if Asia continues its rapid catchup economic growth.

However, there are many challenges that Asia faces in realizing an Asian Century:

-- can the region maintain its rapid economic catch-up?

-- can Asia translate economic weight into political power?

-- can Asians cooperate together as a team? Or will they remain divided, and continue to look to the US and other Western countries for global leadership?

REFERENCES:
- Asian Development Bank, “Asia 2050”, Executive Summary
- ACI, Asian Century on Film
- Hans Rosling: Asia's rise -- how and when? TED Talks.
- ACI, How likely is an Asian Century
- ACI, Fast facts on Asia's people and economy
- The Asian Century, Episode 5: Tokyo (Hosted by Brendon Fernandez)
- Asia rising -- Part 1, Youtube
- Asia rising -- Part 3, Youtube
- Kishore Mahbubani on The Asian Century: Changing Asia
- 15 MAPS THAT WILL CHANGE THE WAY YOU SEE THE WORLD

2. Assessing Asia's developmental progress


Asia has been on top of the world for much of history, with about two-thirds of the world's population and GDP. But during the 19th and first half of the 20th centuries, the West advanced and Asia fell back.

Since the end of World War 2 (1945) and the Korean War (1953), Asia has been making a comeback, a renaissance. Domestic factors have driven Asia's renaissance, like education, export-orientation, investments in infrastructure, and strong leadership.

The US also played an important role -- postwar assistance, military alliances, open markets, a liberal international system. But will the US continue to play a supportive role during the Trump era?

The rapid renaissance of Asia has led to "Asian Century hype" among some Asian commentators, especially following the US and European financial crises. But this hype seems excessive. The renaissance, especially of China, has also given rise to pessimism in the West, as many predict a decline of the West. This also seems excessive.

Against this background, in our second class, we will begin a thorough examination of Asia's of renaissance. In particular, we will study the many economic, social and political transformations that Asia is experiencing.

Economic transformations from:

-- low-income to high-income economies;
-- small to major economies in the global economy;
-- agricultural- to manufacturing- and then service-based economies.
-- weak to highly competitive economies;
-- copycat to innovative economies.

Political transformations from:

-- authoritarian to democratic societies;
-- weak to strong rule of law;
-- corrupt to clean economies;
-- unfree to free press and Internet.

Social/human development from:

-- low to high life expectancy;
-- gender discrimination to equality;
-- rural to urban societies;
-- poverty to prosperity;

Non-income poverty?
Where is Asia's middle class?
Asia's inequality

Amartya Sen's perspective on development -- capabilities, freedom. SarahJoy's perspective.

REFERENCES:
- Asia's development renaissance. ACI
- Asian Development Bank. Key Indicators for Asia and the Pacific 2016
- Gross domestic product 2016, PPP. World Development Indicators database, World Bank, 17 April 2017.
- United Nations. World Population Prospects: The 2017 Revision.
- World Economic Forum. The Global Competitiveness Report 2016–2017.
- Democracy Index 2016. Economist Intelligence Unit.
- Freedom House. Freedom of the Press 2016.
- World Economic Forum. The Global Gender Gap Report 2016.
- World Bank. Ending Extreme Poverty and Sharing Prosperity: Progress and Policies.

3. Some aspects of human well-being in Asia


Developing Asia, remarkable poverty reduction, especially East Asia (China), followed by SE Asia, then South Asia.

But many people still live in "near-poverty". Vulnerable to falling back into poverty, in case of sickness, food price hikes, financial crisis, natural disasters.

Asia continent most hit by natural disasters, likely to increase due to global warming. Countries most hit by natural disasters -- US, China, India, Philippines, Indonesia. Active tectonic plate movements in Pacific and Indian Oceans source of major earthquakes and tsunamis. Indian and Pacific Oceans also regularly generate tropical cyclones and typhoons.

When vulnerability to natural disasters taken into account, over 400 million extra people live in poverty in 2010, more than half in China (flooding) (Youtube.)

Another example of vulnerability global financial crisis started by US in 2008.

Daily income can be irregular. Two-thirds of Asians work in informal sector. Enterprises neither registered nor regulated, workers no contract or rights. No minimum wage laws or health and safety standards.

So financial management a challenge, people must provide food for family on daily basis, cope with emergencies, and save up for major expenditures like houses or marriages. (Youtube.)

Some 1.7 billion (or 40%) Asians lack facilities like clean toilets. Major health hasard -- polluting water. Close to half of Asia’s “toilet-poor” population lives in India. Many more Indians have access to a cell phone than to a toilet! (Youtube.)

Access to Internet. Only 43.9% of Asians use Internet. But 72.3% of youth do. But better in East Asia. Gender gap. International Internet bandwidth still weak.

Inequality, especially in China. Causes. Rapid technological change which requires high-skilled workers and displaces lower-skilled workers. Rapid economic development favored urban areas over rural areas, “spatial inequality”. Unequal access to education as richer towns offer better education than poorer towns. Richer families afford a better education than poorer ones. Also corruption.

Much governments can do for income inequality through government spending and redistribution. Must improve “equality of opportunity” to education, health and financial services which weigh on future inequality. Not enough being done. Important for fight against poverty. Inequality can lower investments in education and health. Can also foster populism and weaken support for pro-growth policies, as well social and political instability.

Poverty also high in Japan, 16% live in relative poverty.

REFERENCES:
- Inside Story - Asia and the economics of natural disasters
- Out Of Order - The State of the World's Toilets 2017 | WaterAid
- India - No toilet, no bride
- India's toilet issue remains despite promise
- Out of Order: The State of the World's Toilets 2017 (see page 9)
- Schauer, V., Kalpana Kochhar, Shi Piao, Sonali Jain-Chandra, Tidiane Kinda. Sharing the Growth Dividend: Analysis of Inequality in Asia. IMF Working Paper No. 16/48. Figures 5, 6 and 8
- ICT Facts & Figures
- OECD. Economic Survey of Japan 2017 -- page 25 on relative poverty
- Living on $2 a day
- ACI. Amartya Sen on development on Youtube

4. Economic catchup in Asia


Since World War 2, Asia's economies have been undertaking catchup or convergence to world leaders -- in terms of GDP per capita, transformation from agricultural to manufacturing to services economies, from low-tech to high-tech, from copycat to innovation economy. Climbing “development ladder”.

Risk of middle income trap.

Japan, Hong Kong, Korea, Singapore and Taiwan have managed to graduate to high-income status. But Malaysia and Thailand fallen into "middle income trap", serious risk China will do same.

How do economies grow? How to climb development ladder? Investment, workers, productivity and innovation.

Early stages of development, economies can make great progress by absorbing knowledge and technology from the rest of the world. As economies converge toward world leaders, it is necessary to become an "innovation nation".

-- Public investment in infrastructure (World Economic Forum data). HK and Singapore lead way. Issue of wasteful infrastructure spending in Japan and China.
-- Ease of doing business -- Starting a business, Dealing with construction permits, Getting electricity, Registering property, Getting credit, Protecting investors, Paying taxes, Trading across borders, Enforcing contracts, Resolving insolvency (World Bank). Singapore & HK lead way. Japan backward.
-- Education -- OECD PISA study. Debate about rote learning in Asian education, and insufficient emphasis on critical thinking and creativity.
-- Demography -- Japan, China, Korea, Taiwan, Singapore and HK -- demographic dividend. Now demography is an negative, as working age population declining. But Singapore & HK lots of migrants. India, Indonesia, Philippines still have growing working age population.
-- Productivity. Innovation.

Overall, East Asia strong infrastructure, ease of doing business and education. Demography now a negative. Most countries in Southeast and South Asia, much less successful, much weaker for education, infrastructure and ease of doing business. Now have large, youthful workforces who are not well educated, and who have trouble finding jobs.

Big issues. Can China innovate? Can it avoid middle income trap? Can India exploit demographic dividend?

When it comes to innovation, most Asian economies have proved more adept at "incremental innovation", rather than "disruptive Innovation". For example, while China assembles smart phones and iPads, these were invented America's Apple. Is rule of Chinese Communist Party compatible with innovation?

REFERENCES:
- World Economic Forum. The Global Competitiveness Report 2017–2018. Pages 328-329 on infrastructure.
- World Bank. Doing Business. Japan page
- OECD. PISA education report.
- UN. World Population Prospects. Volume II. Demographic Profiles.
- Global Innovation Index 2018.
- MSNBC - How Shanghai (China) Schools Outperform The Entire World On Tests
- CNN: Are asian students smarter?
- Designed in China: Can China innovate?
- China's challenge: Moving from copier to innovator
- Alibaba Counters the Myth That China Can’t Innovate

5. Asia’s innovation imperative


Asia's economies now have many challenges.

China benefited from a demographic dividend for many years. But following the effects of one-child policy, China's working age population has already been decreasing for a few years.

Thus, demographics have become a negative factor for China's growth, even though its GDP per capita is only 26% of US. In contrast to Japan, China is becoming old before it becomes rich.

This means that China must do several things to keep climbing the development ladder:

-- improve ease of doing business;
-- invest more in infrastructure;
-- further improve education;
-- increase retirement age, and mobilise women (womenomics).

Above all, China must work towards becoming an "innovation nation", and actively promote entrepreneurship.

India is in a different situation from China. Its working age population is still growing. And there is much that India could to improve infrastructure, make it easier to do business, and improve education.

But it is never too early to become an innovation nation, and India is making great progress, especially in the IT area. And India has its own brand of innovation, known as "frugal innovation".

To succeed at innovation, requires an "innovation ecosystem" including public R&D expenditure, incentives for corporate R&D, open competitive economy, finance for innovation, risk-taking environment, education etc.

REFERENCES:
- Can Innovation Save China?
- Accenture Opens Groundbreaking Innovation Hub in Bengaluru
- India : Universe of frugal innovation - #DownToEarth (up to 6 minutes)

6. Asia's global value chains


Today, virtually all manufactured goods are produced through "global value chains" (GVCs). They are no longer produced in one country.

The production of Apple's iPhone is perhaps the classic example. The iPhone is designed in California, its high-tech components come from Japan, Korea, Taiwan, Germany and elsewhere, it is assembled in China by a Taiwanese company (Foxconn), and its branding and marketing is directed from California.

A similar GVC story can be told for clothing, much of which today is manufactured in China, Bangladesh, Vietnam, and Cambodia. For example, a jacket which is designed and sold in the US for $425, but manufactured in China, might have manufacturing costs representing only 9% of the total sales value. US companies would account for much of the other 91%, through their intellectual property, services like retail, logistics, and banking, and profits.

In other words, products like jackets, which seem to be manufactured goods, are substantially packages of intangible, knowledge-based services. In fact, all manufactured goods embody large shares of services.

There are many other surprising examples of GVCs, some of which highlight the role of Japan in the engine room of today’s GVCs. Japanese high-tech parts and components account for some 35% of the value of Boeing’s 787 Dreamliner, and 21% of the 777 widebody jets. And as China is now celebrating the production of its first big passenger plane, the C919, which is in the testing stage, the reality is that many technologies, systems and parts are supplied by foreign companies, like the engines which come from a joint venture between America’s General Electric and France’s Safran.

GVCs were born in the 1980s. Before that, when Japan and Korea were developing, most manufacturing took place within one country and often under one factory roof. Asia's GVCs offer a fast track for development. You only need to be able to do one element of the GVC to benefit from GVCs.

For example, the Chinese town of Qiaotou, once a mere farming village, has made its mark on Asia’s GVCs by becoming the "button capital of the world". According to one estimate, Qiaotou’s 700 family-run factories would produce over 60% of the world's clothing buttons, and 80% of the world's zippers, as it manufactures 15 billion buttons and 200 million meters of zippers a year.

How did GVCs develop?

Role of Japan. Deng's visit to Japan. Japan's outsourcing to neighbouring Asian countries following 1985 yen hike. Other countries followed suit as their wages/costs rose.

Proximity of countries of different levels of development.

Role of information technology in coordination.

Declining transport costs.

Trade liberalisation.

More recently, GVCs have developed in the service sector. Companies in high-cost countries are now outsourcing call centres, accounting, legal, software development and animation to countries like India and the Philippines.

REFERENCES:
- Getting Better Value Out of Global Value Chains. Asian Century ... on a Knife-edge. John West
- Deng Xiaoping visits Japan Shinkansen
- Deng Xiaoping visits Panasonic in Osaka

7. Benefits and Challenges of Asia's global value chains


Participation in GVCs by lower-skilled countries (like China, Thailand, Vietnam, Bangladesh and Cambodia) usually starts with investment by a multinational enterprise (MNE) from an advanced country. This investment creates jobs, business for local companies, exports. It also results in knowledge and technology transfers. It thus generates prosperity and reduces poverty.

This provides these low income economies with a fast track development. You only need to do one thing to hook onto the global economy (eg, the Chinese button capital). The countries have succeeded thanks to their low-labor costs.

But these economies are in a subordinate position. They are "factory economies", while the advanced economies are "headquarter economies", which gain the most value. In the case of the iPhone, the US is the headquarter and China the factory economy. Cambodia, Bangladesh and Vietnam are factory economies for clothing and footwear, while Thailand is one for motor vehicles.

How does an economy like China graduate from being a factory to headquarter economy (Malaysia and Thailand are stuck as factory economies)? China is very actively trying to transform itself into a headquarter economy.

Invest in R&D, education, buy technology. Also buy high-tech foreign companies. Push MNEs to share technology, into joint ventures, to establish R&D centers. IP theft. China also has a programme called "Made in China 2025" which seeks to upgrade China's technological capacity by protectionist policies, like subsidies and import restrictions. China is targeting “40 per cent self-sufficiency in semiconductors by 2020, rising to 70 per cent by 2025”. This would reduce Chinese imports of US semiconductors by half in 10 years and ultimately eliminate them entirely within 20 years.

These policies have provoked much concern in US and elsewhere. Donald Trump does not like GVCs and is pushing companies to bring GVCs back to US. Foxconn, assembler of iPhone made big investment in Wisconsin. Trump is fighting against China’s protectionism, but also against China’s progress.

China has had some success in becoming a headquarter economy, in climbing GVCs. Huawei, Xiaomi, ZTE and others are very active in electronics, especially in poorer countries where they can easily sell their lower price products. But they are also part of GVCs, and are dependent on advanced economies for high-tech components. Recently a dispute between US and ZTE. US initially stopped ZTE from buying components from US companies, like Qualcomm, Broadcom, and Google. Dispute now resolved. Example of how GVCs can present a security risk.

This is just one of many risks of GVCs.

Other risks include: economic downturn, like 2009/10 financial crisis; natural disasters like Japan's 2011 tsunami which affected supplies of components.

REFERENCES:
- Trump's win pushed this manufacturer to escalate return to the U.S.
- Reshoring: Clarks moves shoe manufacturing back to the UK

8. Benefits and Challenges of Asia's global value chains (cont)


Over time countries like China lose their low-cost advantage, because as they develop and become richer, their wage costs rise, and they lose their low-cost attractiveness. This means that productivity needs to increase, and economies must become more innovation driven.

Some believe "Fourth Industrial Revolution" (Industry 4.0), with digitalisation of manufacturing, Asia's low-wage cost advantage is becoming less relevant, as labor input in manufacturing is greatly diminished.

Where is India in manufacturing GVCs?

India (and the Philippines) missed out on big wave of foreign investment in GVCs. Poor infrastructure, education, not open to foreign investment, distant from East Asia.

But things changing. China’s labor costs increasing, Japan and others looking to diversify GVCs, India making efforts to attract GVCs.

Socially responsible GVCs?

Poor GVC-workers are often subject to labor-rights and human-rights abuses. MNEs take advantage of not only low labor costs, but also poor conditions. Horror stories like collapse of the Rana Plaza factory building in Bangladesh.

In Bangladesh, clothing accounts for over 80% of exports, and more than 10% of GDP. Employs some 4.2 million people, of whom about 80% are women. Indirectly supports as many as 40 million Bangladeshis, about 25% of population. Bangladesh’s clothing industry is second to China’s in size.

But dark side brought to attention of world in April 2013, when Rana Plaza, a building housing factories, collapsed killing 1138 workers, mainly young women, and left more than 2000 injured.

Who was responsible? Bangladeshi authorities who made no effort to enforce own health and safety laws. Factory owners who knowingly put their workers at risk in order to keep costs low. International brands that turned a blind eye to glaring problems.

Some positive response. Building owner prosecuted and in jail. A fund was created to compensate victims. Factories now being inspected.

Asia’s GVC successes mainly in manufacturing sector. What about services sector?

But India and Philippines had much success in business process outsourcing of routine tasks -- thanks to English language, low cost, tech-savvy youth. Began with call centers, and then extended to telemarketing, accounting, paralegal, human resources, software development, medical transcription and so on.

One-quarter of India’s exports! Direct employment of 3 million and additional 10 million through indirect employment. Need to increase value-added. This means stronger investments in human capital and infrastructure, and further opening of economy to foster higher value-added activities.

BPO no development panacea, it only offers employment to well educated, and not to masses of lower-skilled people who need jobs. Both India and the Philippines need a manufacturing renaissance to offer employment to the lower-skilled.

Greater openness to trade and investment would help GVCs -- the TPP and Japan/EU trade agreement.

REFERENCES:
- What is the Fourth Industrial Revolution?
- The Fourth Industrial Revolution | At a glance
- Rana Plaza Collapse Documentary: The Deadly Cost of Fashion | Op-Docs | The New York Times -- Youtube
- Philip Jennings. Rana Plaza -- 12 months on. Youtube.
- Foxconn: An Exclusive Inside Look. Youtube.
- What is the TPP 11? | CNBC Explains
- EU-Japan Free Trade: leaders seal the deal in Tokyo

9. Urbanisation in Asia


GVCs and urbanization closely linked. People move from country to city to work in GVC factories, as well urban services sector.

Why migrate from country to city? Job opportunities, availability of services, bright lights and excitement, or an escape from village life. Some flee hunger and poverty, conflicts, natural disasters and environmental crises like desertification.

Asia, especially China, is in midst of biggest wave of urbanization in history. Show data.

Movement of people from rural to urban areas can provide big boost to development, because people usually move from low value added agricultural work to higher value added manufacturing and services work. Also city governments better able to provide public services, sanitation, water, education, health.

In other words, urbanisation is good for development.

Lewis model, surplus labor. China reached "Lewis turning point", where surplus rural labor is exhausted and wages increase substantially. Time to shift from cheap labour to smart labour development. Youtube.

More recently, labour unrest, slowing economy and factory closures. Youtube.

Urbanisation very beneficial, but some restrictions, notably in China. Household registration system -- "hukou" -- prevents rural migrants benefiting from social services in big cities like Shanghai. Youtube

Urbanisation has its problems, like urban poverty and slums. One-third of Asia's urban population lives in slums with poor infrastructure and high poverty. Show data. Slums often exposed to natural disasters, because badly planned. Can be site of civil unrest, and a driver of democratization.

Asia’s urban environmental crisis, air and water pollution. India worse than China. Data

Many Asian cities are vulnerable to flooding and effects of global warming. Data

One consequence of Asia's rapid urbanization and demographic decline is the growing number of "ghost towns", occupied by dwindling numbers of senior citizens.

REFERENCES:
- China at the Lewis Turning Point | FT World
- In China, a surge in strikes
- LABOR DISCONTENT IN CHINA
- Kevin McCloud: Slumming It (2010) - Ep1 -- 6 minutes.
- On China: Hukou system
- India Tops List of Most Dangerous Country for Women in Reuters Survey
- World’s most polluted cities
- Ghost town JAPAN

10. Urbanisation in Asia (cont)


Asia needs “smart cities”, which use data and technology to create efficiencies, improve sustainability, create economic development, and enhance quality of life factors for people living and working in the city. India which has some of the world’s worst slums, now has plans to build 100 smart cities.

Asia needs to move towards innovation-driven development. And cities are usually where innovation takes place.

Cities need to be a melting pot of artists, academics and investors, men and women, young and old, and of different ethnic and cultural backgrounds, provides a potent force for generating and realizing new ideas. It also helps if there is an environment which tolerates or even encourages differences, rather than conformity, promotes risk taking, and does not instantly punish making mistakes.

World's most innovative cities. London, New York, Tokyo, San Francisco, Boston, Los Angeles, Singapore, Toronto, Paris, Vienna, Seoul, Amsterdam, Barcelona, Sydney, Munich, Dallas, Berlin, Atlanta, Montreal, Chicago. Other Asian cities further down the list.

Asia’s best innovation cities are Tokyo and Singapore. But many Chinese and Indian cities in list.

Two interesting cases are Shenzhen and Bengaluru, each of which claim to be Silicon Valleys of their respective countries.

REFERENCES:
- What is a smart city ?
- Are India's smart cities too ambitious?
- Hangzhou: A Chinese smart city
- Smart cities China
- Shenzhen: The Silicon Valley of Hardware - Trailer | Future Cities | WIRED
- Inside China's Silicon Valley
- BBC Future Bengaluru Inside India's Silicon Valley
- Singapore Is Asia's Best at Attracting Talent for Fifth Year Running
- Innovation Cities™ Index 2016-2017: Top 100 Cities

11. LGBT rights in Asia


Economic growth is determined by investment, labor (workers) and productivity. When certain social groups suffer from discrimination, their contribution to the economy is weaker, and of course, society is also fractured.

In this class, we conduct a brief overview of LGBT rights in Asia, equality of opportunity for women, and ethnic and other minority groups.

One important event in LGBT rights in recent years was when Tim Cook, CEO of Apple, “came out” in an essay published by Bloomberg Businessweek. "I’m proud to be gay, and I consider being gay among the greatest gifts God has given me”, said Tim Cook, CEO of Apple. “Part of social progress is understanding that a person is not defined only by one's sexuality, race, or gender …The company that I am so fortunate to lead has long advocated for human rights and equality for all”.

Ironical that on same day Cook’s essay was published, Singapore's Court of Appeal upheld the country's ban on gay sex. LGBT communities may suffer from some of the most egregious discrimination in Asia. According to 2014 Gallup poll, most Asian countries are not LGBT-friendly, and things may have since gotten worse. The best performing Asian countries are Philippines and Taiwan, where 58% and 39% of respondents respectively consider their home city or area to be LGBT-friendly (indeed, in May 2017, Taiwan’s top court ruled that gay couples will be allowed to marry).

Scores were less than 30% for Japan, India, Myanmar, Thailand and Vietnam, below 20% for Bangladesh, Korea and China, and 10% or below for Malaysia, Mongolia, Sri Lanka, Indonesia and Pakistan. Indonesia is an interesting case. A 2013 report by the Pew Research Center showed that over 93% of Indonesians believe that homosexuality should not be accepted (other Asian countries with high non-acceptance rates were Pakistan, Malaysia, China and South Korea).

In addition to being fundamental human rights, LGBT rights also make good economic sense. As Cook said, Apple is a "company that loves creativity and innovation and knows it can only flourish when you embrace people's differences.” It is not surprising that Apple should be ranked the most innovative company.

Indonesia, Singapore, China, and other Asian countries dream of having homegrown companies like Apple. But until they embrace diversity, and fight against discrimination, prejudice,and persecution of LGBT and other social groups, the dream of building successful innovative companies will remain a pious hope.

REFERENCES:
- Apple CEO Tim Cook: I'm Proud to Be Gay
- Taiwan is paving the way to equal LGBT rights in Asia
- Gay Rights in Asia: One Milestone, Many Hurdles
- Gay rights in China get fillip from Taiwan same-sex marriage ruling
- Tokyo's Shibuya ward is first in Japan to recognise same-sex marriage

12. Womenomics in Asia


Now that both Japan and China have declining working age populations, increasing participation in the world of work by women would be beneficial for both countries. But the two countries appear to be taking different approaches, with Japan promoting womenomics, while China seems to be promoting a return to more traditional family values.

Both countries score poorly on the World Economic Forum's global gender gap index (GGGI), with China ranked 100th and Japan 114th out of the 144 countries surveyed. For China, the gap is largest for Health and Survival, and Educational Attainment, whereas for Japan the gap is largest for Political Empowerment, and Economic Participation and Opportunity.

In Japan, the current Abe government has included womenics in its Abenomics program to revitalise the economy.

Japanese women have traditionally been responsible for the home, while men have been the breadwinner. So comprehensive, systemic change is necessary. Work environments must become "family-friendly". Government policies need to support womenomics through better provision of daycare facilities and tax policies. Family life must also change, with men providing more support. If successful Japanese women would be able combine both work and family life, just like the Prime Minister of New Zealand.

The key elements in Abe's womenomics program are:

-- Establishing new targets for the participation and advancement of women in the workforce.
-- Increasing the availability of daycare and after-school care.
-- Encouraging the private sector to promote more women and provide data on the advancement of women.
-- Recruiting and promoting women in government.
-- Expanding child care leave benefits.
-- Reviewing the tax and social security system.
-- Allow foreign housekeepers in special economic zones.

Show Youtube.

But while Japan is promoting womenomics as a solution to its demographic problems, Chinese President Xi Jinping seems to be promoting a return to traditional family values. Family life should take the priority over work life for women. The All-China Women's Federation is now giving courses to train women in traditional family values -- the woman's place is in the home. Chinese feminist activists have been arrested. Women are barely present in Chinese politics. Since the start of Xi’s tenure, China’s ranking in the World Economic Forum’s global gender gap index has dropped significantly – from 69 out of 144 countries in 2013 to a 100th-place finish in 2017.

The plight of South Asia’s women much worse. Now like Sub-Saharan Africa for nutrition, health, education, and economic and political participation for gender equality. Half of South Asian women cannot read. In South Asia women much more vulnerable to poverty, sexual and other violence, and HIV/AIDS. The problem is conservative traditional values in male-dominated societies.

REFERENCES:
- The Global Gender Gap Report 2017. World Economic Forum.
- WOMENOMICS 4.0: TIME TO WALK THE TALK. Goldman Sachs
- Chinese college teaching women to be ‘perfect’ in the Xi Jinping era
- Achieving gender equality in India: what works, and what doesn’t
- Malnutrition and Gender Equality in India | UNICEF

13. Indigenous peoples in Asia


Asia’s indigenous peoples. 260 million indigenous peoples in Asia, three-quarters of the world's total. This makes Asia the most culturally diverse region in the world. Indigenous peoples have a historical continuity with pre-invasion and pre-colonial societies, and consider themselves distinct from other sectors of the societies now prevailing.

Asia’s indigenous peoples deprived of opportunity of contributing fully to the economy and society. Poverty rate of Asia's indigenous peoples is three times higher than the Asian average. And education, health and other social conditions are also much worse. Most indigenous peoples have benefited little from this economic growth. Also face problems of self-determination, loss of control over land and natural resources, discrimination and marginalization, heavy assimilation pressure and violent repression by state security forces. Experiences of the US, Canada, Australia and New Zealand highlight how very difficult it can be to address challenges of indigenous peoples.

Who are Asia's indigenous peoples? Where do they live?

-- Myanmar has over 100 different ethnic groups, with Burmans making up an estimated 68 percent of the country’s 53 million people.

-- Besides Han majority, Chinese government recognises 55 ethnic minority peoples, who number 114 million persons, or 8.5 % of total population. Great efforts to improve education and health. But Tibetans and Uighurs still suffer terrible human rights.

-- In India, 461 ethnic groups, estimated population of 84.3 million, 8.2% of total population.

-- Indonesia's population of 250 million includes some 50-70 million indigenous peoples.

-- Japan has two main indigenous peoples, the Ainu and the Okinawans.

-- Philippine national population of over 100 million includes an indigenous population of between 10% and 20%.

-- Vietnam's 53 recognized ethnic groups, beyond the Kinh majority, account for around 14% of the country’s total population of 90 million. While Vietnam has achieved a spectacular decline in its poverty, among its ethnic minorities poverty remains very high.

As the experience of US, Canada, Australia and New Zealand shows, addressing the concerns of indigenous populations is a great challenge.

India's caste system

REFERENCES:
- Advancing the rights of indigenous peoples
- Indigenous peoples in Asia. International Work Group for Indigenous Affairs.
- Is India's Caste System Still Alive?
- Discrimination prevents Muslims in India from seeking higher education
- Singapore Budget 2016: Jurong Innovation District

14. Asia's demographic dilemmas


World population, long term trends -- relatively flat for most of human history -- then a dramatic increase in recent centuries due to demographic transitions.

In history, high birth and mortality rates, little change in population.

First demographic transition -- decline in mortality rates thanks to nutrition and hygiene -- results in increase in youth population. As youthful population advance to working age creates potential for a demographic dividend, if they are educated and jobs are available.

Second demographic transition occurs when women's fertility rates decline in tandem with urbanization, better education, improvement in women's rights and prosperity. This enhances demographic dividend by reducing the burden of children.

Third transition occurs when demographic bulge advances into retirement age. This reduces share of the working age population, and represents a "demographic tax". Share of retired population is increased by higher life expectancy, thanks to improved health care and healthy lifestyles.

Asia's advanced economies like Japan, Korea, China, Hong Kong, Taiwan and Singapore have benefited from a demographic dividend. Now experiencing "demographic taxes", especially since life expectancies are now high. Much more can be done to alleviate effects of aging populations -- such as by more opportunity to women and youth, raising retirement age and cutting back on retirement benefits, implementing open immigration policies, and improving productivity.

Countries like India, Indonesia and the Philippines now have youth bulges entering labour market. But are less successful in educating their youth and providing jobs for them. Risks of social explosion.

To surprise of many, most Asian countries are now experiencing a fourth demographic transition as fertility rates have fallen below the "replacement rate" of 2.1 children per woman. This is accelerating population aging, and resulting in declining populations (Japan already). Much can be done to address factors discouraging childbirth, and implement more family-friendly policies in workplace. China's one-child policy.

Connecting Asia's "old" and "young" countries is potential for mutually beneficial migration. Hong Kong and Singapore have accepted large numbers of immigrants. But while skilled workers can become citizens, lower skilled workers usually treated as guest workers.

Japan is experiencing labour shortages, and needs immigrants. But it has very restrictive policies towards immigration for cultural reasons. It does however have an "internship" programme, really a guest worker programme. It is becoming easier for skilled workers to migrate to Japan and to gain permanent residence. Japan also accepts "marriage migrants".

Korea in a similar situation to Japan, but is becoming more open to migration, especially for Chinese citizens of Korean ethnic origin.

Human trafficking is widespread in Asia, including in Japan.

REFERENCES:
- Solving Asia's demographic dilemmas. Asian Century ... on a Knife-edge. John West
- China’s leftover women
- World population

15. Focus on China -- Part 1


In 1978, Deng Xiaoping was leader of a China that was very poor, following almost 30 years of Chairman Mao. Deng believed China needed to develop for its survival.

He looked for models and saw Japan (and also Korea,Taiwan, HK and Singapore), which developed through exports.

What did Deng do? Policy of reform & opening up. Until then, China had a centrally-planned economy.

Deng visited Japan in 1978, invited Panasonic to invest in China. Beginning of GVCs in China. Deng pragmatic. Opened pragmatically to trade and investment through special economic zones.

Allowed internal migration from countryside to cities and towns, while retaining hukou system. Migrants worked in GVC factories, construction and urban services sector.

Investment in infrastructure and education.

Allowed students to go overseas.

One child policy to control population growth.

China benefited from demographic dividend.

Privatisation of many state-owned enterprises.

Private enterprise permitted. Today, China has many successful private enterprises, like Alibaba.

Membership of WTO in 2001 saw new wave of foreign investment and trade. Many in US thought this would lead to democracy.

BUT,

Government also retained many SOEs, in strategic sectors like banking, telecommunications, energy ("state capitalism").

China retained many restrictions on international trade and investment. Exchange rate manipulation for long time.

BENEFITS,

GDP per capita rose from $987 in 1990 to $16,807. Economy averaged 10% annual growth from 1978 to 2008. Now slowed down to 6 ½%

Poverty reduction, based on $1.90 a day, from 67% in 1990 to 1.4% in 2014.


BUT,

Dramatic increase in income inequality. Hukou system fosters inequality.

High level of corruption.

Incredible environmental damage.

Working age population now declining, and population aging. China needs womenomics.

China past Lewis turning point. Can no longer rely on cheap labor for development. Must become an innovation nation, with smart and innovation cities. Otherwise, risk of middle-income trap.

In 2007, Premier Wen Jiabao warned Chinese economy was “unbalanced, unstable, uncoordinated, and unsustainable”.

President Xi Jinping in power for 5 ½ years. Tightening political controls. No prospect for democracy. More difficult for foreign business. Fighting corruption. Trying to clean up environment.

China now actively trying to climb GVC -- investing in R&D, buying foreign companies, forced technology transfer, forced joint venture, intellectual property theft.

In light of China’s demographics, it must climb GVCs, and become a headquarter economy.

But as Lee Kuan Yew once said:

China can draw on a talent pool of 1.3 billion people, but the United States can draw on a talent pool of 7 billion and recombine them in a diverse culture that enhances creativity in a way that ethnic Han nationalism cannot.

And China also has a massive debt problem, which we will consider in next lesson.

REFERENCES:
- China’s conundrums. Asian Century … on a Knife-edge. John West
- Deng Xiaoping visits Japan Shinkansen
- On October 28, 1978, Konosuke Matsushita welcoming Vice Premier Deng Xiaoping at the TV Division
- China's special economic zones
- China's internal migration.
- Foxconn factories in China
- Beijing airport
- Gaokao students in China
- Chinese students in US.
- China's one-child policy

16. Japan and China parallels


Japan was destroyed by World War. Like China in 1978, Japan in 1945 was desperate. But Japan’s leaders were very motivated to rebuild their economy.

Like China, Japan invested heavily in infrastructure and education. Its manufacturing companies targeted US and other world markets. This was before GVCs. But by exporting to world markets, Japanese companies learnt how to meet international standards. Over time, they produced increasingly complex products.

But like China, Japan was never an open market. The Japanese government protected its companies, to give them time to improve their capacity.

Japanese companies became world leaders in motor vehicles and electronics. In 1964, Tokyo hosted Olympic Games. In 1970, Osaka hosted World Exposition. By 1968, Japan became world’s second biggest economy.

In 1980s, Japan had a bubble economy. Bubble burst in early 1990s. Government slow to react. Japan then hit by declining working age population, and competition from Korea and other companies. Government spent lots of money to keep economy afloat. Public national debt now 250% of GDP. Since early 1990s, Japan’s annual economic growth only about 1%. “Lost decades”.

Now back to China. China’s GVC-driven development hit a problem in 2008, with US financial crisis. Chinese government launched a massive economic stimulus program -- infrastructure and housing, encouraging companies to increase production, and easy money. Financed by money from state-owned banks. Effective in maintaining growth. Helpful to world economy.

But adverse side effects. Not all infrastructure was efficient -- some white elephants, and ghost cities. Excess capacity in industries like steel, cement and aluminium. Asset bubbles in some real estate markets.

China's total debt has risen dramatically, from 150% of GDP to over 250%, and could rise over 300% in coming years. Much is corporate debt debt, not government debt. But still in public sphere because much is state-owned enterprise debt owed to state-owned banks. Debt in shadow-banking sector also very high. Much debt is held by inefficient zombie companies.

Some are worried that China is headed towards a debt crisis. IMF says China’s “credit growth is on a dangerous trajectory, with increasing risks of a disruptive adjustment and/or a marked growth slowdown”.

Others argue that China is safe. It has high foreign exchange reserves, low government debt, and the Communist government has a great capacity to control the economy. Against that, the government seems more concerned about preventing unemployment than its debt, and more concerned about achieving its economic growth targets.

One thing is certain now that China needs to improve its productivity, much of its debt and investment are increasingly inefficient, raising is spectre of stagnation like Japan.

REFERENCES:
- Is China’s economy turning Japanese? Financial Times.
- The Vapors - Turning Japanese - 1.10
- Credit Booms—Is China Different? Sally Chen ; Joong Shik Kang. IMF Working Paper
- Resolving China's Zombies: Tackling Debt and Raising Productivity. W. Raphael Lam ; Alfred Schipke ; Yuyan Tan ; Zhibo Tan. IMF Working Paper.
- China's eerie ghost cities a 'symptom' of the country's economic troubles and housing bubble
- A look at China's debt issues
- China's Central Bank Chief Warns Corporate Debt Is Too High
- Xi Jinping, Barack Obama, Winnie the Pooh
- Xi Jinping, Shinzo Abe, Winnie the Pooh
- China’s Great Wall of Debt

17. China versus India


CHINA IS AHEAD OF INDIA ON MOST SCORES, BUT COULD INDIA CATCH UP?


Population -- 2017 China 1.4b India 1.3b
2100 China 1.0b India 1.5b

Fertility rate China 1.6 India 2.4

Life expectancy China 76.0 India 68.3

Urban population China 57.4% India 31%

Agriculture pop China 27.7% India 53.2%

Total GDP(PPP) -- 2016 China $21.4t India $8.7t

GDP (PPP) per capita China $15,489 India $6,700

GDP growth 2018 China 6.6% India 7.3%

Innovation rank China 17 India 57

Infrastructure rank China 46 India 66

Poverty $1.90 China 1.4% India 21.2%

Inequality index China 53 India 51

Literacy China 95% India 69%

Health care access China 77.9 India 41.2
and quality index

No toilets China 25% India 56%

Gender rank China 100 India 108

Internet penetration China 53% India 30%

Environmental index rank China 120 India 177

Democracy rank China 139 India 42

Rule of law rank China 75 India 62

Corruption rank China 77 India 81

Freedom of press rank China 186 India 83

Freedom of Internet China 87 India 41

18. Focus on India


India has great potential.

Indian Americans earn on average $88,000 a year, compared with $66,000 for all Asian Americans, Chinese $65,000 for Chinese Americans and $50,000 for Americans overall.
Indian success stories in US include CEOs of Microsoft (Satya Nadella), Google (Sundar Pichai), Pepsi (Indra Nooyi).

Indian companies Infosys, Mahindra, Mittal, Reliance and Tata succeed on world markets.

Indian movie industry (Bollywood) produces more films than any other country.

Indian Premier League is world’s most lucrative and popular cricket tournament.

But Indian economy was chronic underperformer. From 1950s to 80s, weak economic growth, averaging 3.5%, or 1.3% per capita. Although democratic governance, socialist economy.

Many recommended Chinese-style, authoritarian government. But unrealistic, given India’s diversity and strong society. In history, never had centralized, authoritarian regime like China.

Show Youtubes.

India was pushed to reform and openness by financial crisis in early 1990s, over a decade after China’s reform.

India since averaged 6½% annual growth, currently world’s fastest growing large economy, 7½%. India’s GDP per capita more than tripled. Not as good as China, but still pretty good.

Poverty reduced. Not as good as China, but OK. India’s GDP per capita less than half China. But world’s third biggest economy.

GVCs for business process outsourcing a key driver of growth. India missed GVC wave for manufacturing. Urbanisation, not advanced. High inequality.

In 2014 national elections, deeply corrupt and incompetent National Congress Party, beaten by Bharatiya Janata Party (BJP). Elections and transfer of power very successful.

Prime Minister Narendra Modi now leading country. Pro-business, pro-growth and anti-corruption.

India’s challenges. Poor education. Social discrimination -- lower castes, indigenous and tribal groups, women, and religious minorities. Large youth bulge entering labor market. Potential for demographic dividend.

India needs to develop manufacturing sector, like China, to employ large pools of lower-skilled labor.

India also needs to develop smart and innovation cities in light of urbanisation underway.

Modi is making efforts to develop manufacturing sector, infrastructure, special economic zones, opening markets to trade and investment. Good timing. China passed Lewis turning point. Japan seeking to diversify investments. Foreign investment increasing.

Companies like Samsung, Softbank, Xiaomi, Foxconn, Alibaba, and now doing business in India. Indian diaspora of over 30 million, one source of investment.

Here's more on excitement around IKEA’s first store in India
https://www.cnbctv18.com/videos/retail/heres-more-on-excitement-around-ikeas-first-store-in-india-227431.htm

Uniqlo is entering India's booming retail market
https://www.youtube.com/watch?v=SSc3VsJ0NjY

REFERENCES:
- India, a slow burner. Asian Century ... on a Knife-edge
- How will Lee Kuan Yew govern India?
- Francis Fukuyama: India vs. China
- In Business - India's Demographic: Dividend or Disaster?
- Samsung opens world's largest phone factory in India
- Japan's SoftBank to invest up to $100 billion in Indian solar: NHK
- Xiaomi's new manufacturing plant opened in India
- Samsung or Xiaomi? It's a two-horse race for India's smartphone market
- Inside Alibaba’s India strategy
- Good news for India's pharma industry: China removes import duties on 28 medicines

19. Southeast Asia and ASEAN


Southeast Asia very important. Population 622 million. World’s seventh biggest economy. Annual average growth rate of 5.1% from 2000-2013.

Very diverse. From rich Singapore to middle-income Malaysia and Thailand, to very poor Cambodia and Myanmar. From Buddhist Thailand and Myanmar, to Muslim Indonesia and Malaysia, to Catholic Philippines. From large economy of Indonesia (40% of region's GDP) to tiny Cambodia and Laos.

In 1967, governments of Indonesia, Malaysia, the Philippines, Singapore and Thailand were sufficiently worried about security threats from communism so they created ASEAN, which expanded as follows: Brunei (1984), Vietnam (1995), Laos and Myanmar (1997), and Cambodia (1999).

With end of Cold War and globalization, ASEAN transformed into important organization for economic cooperation. ASEAN Free Trade Area signed in 1992. In 2015 ASEAN Community came into force with economic, political-security and socio-cultural pillars. Despite these impressive achievements, ASEAN cooperation remains shallow.

As countries in Northeast and South Asia have bad relations, ASEAN become meeting ground for Asian cooperation. China, Japan, Korea, Australia, New Zealand, and India -- have free trade agreements with ASEAN. Regional Comprehensive Economic Partnership under discussion. ASEAN Regional Forum includes North Korea, recent meeting. East Asia Summit.

China’s growing influence over ASEAN through trade, tourism, investment and aid. In 2010, China’s then foreign minister Yang Jiechi famously said “China is a big country and you are small countries and that is a fact”. China now bullying ASEAN over South China Sea.

The success of the ASEAN economies is mainly due to their participation in GVCs. This started with major investments by Japan, and Western countries, followed by Korea and Taiwan. In more recent years, China and even India have been also investing in ASEAN.

Singapore is a center for finance, logistics, and corporate headquarters.

Malaysia, Thailand and Vietnam are very present in manufacturing GVCs. More recently Cambodia is an important producer of clothing. While the Philippines, like India, missed out on manufacturing GVCs, it has become a big player in GVCs for business process outsourcing.

But the ASEAN countries are not headquarter economies, they are still factory and back-office economies. This limits their capacity for development. Malaysia and Thailand are now stuck in middle-income traps.

REFERENCES:
- 7 Things you need to know about ASEAN
- What Is ASEAN And Why Is It Important For Southeast Asia?
- Car Manufacturing Booms in Thailand
- A Day in the Life of a Modern Philippines Contact Center BPO
- Vietnam: the most dynamic in Asean. Lee Kuan Yu (start at 3.30)
- Chinese companies are set to boost Southeast Asia's e-commerce market: Credit Suisse
- Southeast Asia is increasingly turning to India instead of the US or China
- Despite strains, Vietnam and China forge closer economic ties
- Chinese aid and investment propel Cambodia’s economic growth
- On democracy & human rights in SE Asia: PM Lee

20. Well-being and happiness in Asia


There is more to life than the cold numbers of GDP and economic statistics. Economists and policy-makers are now increasingly focusing on measures of well-being and happiness.

An early inspiration for this was the King of Bhutan, Jigme Singye Wangchuck who said "We do not believe in Gross National Product. Gross National Happiness is more important." Bhutan now measures the country's GNH. Critics say that the concept is propaganda by the Bhutanese government to distract from human rights abuses in the country.

Obesity a growing problem in Asia. What does this tell us about happiness in Asia?

The UN now publishes the "World Happiness Report".

This report measures happiness based on six factors: GDP per capita, healthy years of life expectancy, social support (as measured by having someone to count on in times of trouble), trust (as measured by a perceived absence of corruption in government and business), perceived freedom to make life decisions, and generosity (as measured by recent donations).

Rankings include: Canada 7; Australia 10; US 18; Taiwan 26; Singapore 34; Malaysia 35; Thailand 46; Japan 54; Korea 57; Russia 59; Philippines 71; Hong Kong 76; China 86.

Japan is ranked the 54th most happy nation in the world, whereas Japan's GDP per capita in PPP terms would be the 22nd highest in the world, according to the World Bank.

The OECD's Better Life Index allows us to compare well-being across countries, based on 11 topics, namely, Housing, Income, Jobs, Community, Education, Environment, Civic Engagement, Health, Life Satisfaction, Safety and Work-Life Balance.

The OECD's Better Life Index provides interesting insights into Japan's wellbeing. This Index allows you to compare well-being across countries, based on 11 topics the OECD has identified as essential, namely housing, income, jobs, community, education, environment, civic engagement, health, life satisfaction, safety, and work-life balance.

Japan scores quite well for income, education, very low unemployment rate, very low murder rate.

But Japan scores poorly for housing quality, civic engagement (very low voter turnout), self-reported health (despite high life expectancy), life satisfaction, work-life balance (working very long hours), and gender equality.

Suicide is a widely publicised phenomenon in Japan. In recent years, it has been falling. But it is still is the second highest among the OECD countries after South Korea.

REFERENCES:
- OECD Better Life Index
- World Happiness Report
- Bhutan’s Gross National Happiness Index
- Centre for Bhutan Studies and Gross National Happiness
- Wealthy But Unhealthy: Overweight and Obesity in Asia and the Pacific: Trends, Costs, and Policies for Better Health, ADBI

21. US, China, India and Japan


Role of US in Asian Century. Remade Japan into democracy with pacifist constitution. Offered security alliances and partnerships to Japan, Korea, the Philippines, Taiwan, Thailand and Singapore. Provided financial assistance to rebuild war-torn economies.

America’s open markets enabled these countries to pursue export-driven development. And post-war liberal international order led by US, which includes World Trade Organization, underpinned an open and secure international system which facilitated Asia’s development.

When China began opening its economy from 1978, US welcomed Chinese exports, students, migrants and more recently investors.

In short, US was Asia's leader. China maintained low profile, following Deng Xiaoping's advice.

Since 2008, and under Xi Jinping's leadership China challenging US leadership in Asia.

XI said “strengthening military alliances with a third party does not benefit the maintenance of regional security … it is for the people of Asia to run the affairs of Asia".

Many feared a great power struggle between US and China could lead to war. Thucydides trap. More than 2,400 years ago, Athenian historian Thucydides said “It was the rise of Athens, and the fear that this inspired in Sparta, that made war inevitable.”

According to Graham Allison, in history “When the parties avoided war, it required huge, painful adjustments in attitudes and actions on the part not just of the challenger but also the challenged,” wrote Allison.

Some argue dense trade, investment, finance and people-to-people relations between two countries mean that war too costly. But cases in history where war war happened.

But Donald Trump's isolationist America retreating from Asia, leaving region's leadership to China. Withdrew from TPP. Questioning value of alliances. Threatening to withdraw US soldiers from Japan and Korea. Forgetting ASEAN.

Is US leaving Asia to China?

Japan is worried. Strengthening friendships with India, Australia, SEAsia. But US's attitude to Japan and China, pushing them together.

India worried about China's assertive behaviour. Belt & Road ports in Indian Ocean. But trade between India and China booming. And China now investing in India's infrastructure.

A key to Asia's development has been peace and open US market. But future international relations in Asia now uncertain.

REFERENCES:
- Future of peace in Asia. Asian Century ... on a Knife-edge. John West
- Graham Allison: Unpacking Thucydides's Trap
- Can Asian Countries Live Together in Peace and Harmony? Asian Century ... on a Knife-edge. John West