平和
和平
평화
ASIA
01 November 2014
Before the Asian Century

Before the Asian Century

The emerging Asian Century is a return to normalcy. Apart from the 19th and 20th centuries, Asia has always had the dominant weight in the world economy, thanks to its enormous population.

The seeds of the Asian Century were planted in the immediate post-World War 2 period, when Japan executed an astonishing recovery from the ashes of defeat.

In a pattern of "flying geese", Hong Kong, Korea, Singapore and Taiwan would take off next. Then followed a group of Southeast Asian countries like Indonesia, Malaysia and Thailand. After that, China, India, Vietnam, and even more recently the Philippines.

This dynamism has enabled Asia to grow its share of world GDP from less than 20% in 1950 to more than 30% today.

But the roots of the Asian Century are much deeper. As is the case today, when Asia accounts for some 60% of the world's population, Asia has always accounted for the majority of the world's population. Not surprisingly, it also accounted for more than half of world GDP.

Two thousand years ago, Asia accounted for 76% of world GDP. While its GDP per capita was about the same as the West, its massive population (78 million compared with the West's 11 million) ensured its dominant weight in the world economy of the time.

With the arrival of the new millennium, Europe started to awake from the Dark Ages, and experienced the "Renaissance". By the year 1500, Europe's GDP per capita had crept 35% ahead of Asia. And with the Industrial Revolution transforming Europe in the 18th and 19th centuries, Europe's GDP per capita was more than double that of Asia by 1820.

It was not however until later in the 19th century that the West would overtake Asia in terms of total GDP. The adverse effects of the West's colonization and invasion of many Asian countries took their toll. As did internal strife like the Taiping Rebellion in China. At the same time, the Industrial Revolution continued and spread from Britain to Western Europe and Western offshoots, especially the US.

On the eve of World War 1, the Western world's share of the world economy was almost triple that of Asia, even though Asia still held two-thirds of the world's population. And even after the destruction of World War 2, the West's share of the world economy would still be three times that of Asia, with the US emerging as a clear leader.

Asia's comeback would only begin with post-war rise of Japan.

Within Asia, there would also be important changes in economic weight. The stability of the Tokugawa shogunate in Japan, combined with China's internal troubles, enabled Japan's economic development to forge ahead of China in the 18th and 19th centuries. By 1870, the time of the Meiji Restoration, Japan's GDP per capita was 40% higher than China's.

The gulf between Japan and China would continue to widen further. Japan launched an aggressive campaign to import knowledge and technology from the West, while China resisted modernity. On the eve of World War 1, Japan's GDP per capita was 2 1/2 times China's. And even in 1950, it was more than 4 times China's.

This gap between Japan and China would only continue to widen until China began to open its economy to the rest of the world in 1978. While China total GDP overtook China's in 2010 to become the world's second biggest economy, Japan's GDP per capita today remains four times higher than Japan's in purchasing power parity terms.

If China continues its impressive economic performance, it could and should catchup to Japan's and the West's level of economic development -- as could all other Asian economies. But that depends on the implementation of sound policies over a very long period of time.

An easier goal would be surpassing the West's share of the global economy, and for the size of the Chinese economy to surpass America's. With Asia's enormous population, this should be just a matter of time. But for a very long time, Asia will remain big and poor, or at the very least behind the West in terms of economic and technological development.

The emerging Asian Century is a return to normalcy. Apart from the 19th and 20th centuries, Asia has always had the dominant weight in the world economy, thanks to its enormous population.

But transforming dominant economic weight into power is a more problematic proposition. Power requires technology and sophistication. And for Asia as a whole to be powerful requires close cooperation between the various countries on the continent. At the moment, Asia is characterized more by rivalry and conflict than by cooperation.

Author

John West
Executive Director
Asian Century Institute
Tags: asia, angus maddison, asian century

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