The Asian Century
What Asian Century?
Guy Sorman
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PARIS – It is almost taken for granted nowadays that this is to be the “Asian Century,” marking an irreversible political/economic shift in global power from West to East. China has replaced Germany as the world’s leading exporter, while South Korea’s Korean Electric recently outbid Electricité de France to build three nuclear reactors in Abu Dhabi.
To be sure, Chinese trade statistics do not reflect the imports needed to assemble its exports, and the South Koreans’ reactor will use Westinghouse technology. But Asia’s success should not be undersold, especially when one considers that Asia’s governments have used the recent financial crisis wisely, as an opportunity to reinforce the free market mechanism. (South Korea, for example, simultaneously helped its poor and deregulated its labor market.) The United States and Europe have not.
Yet it is premature to proclaim an Asian Century. Perhaps the coastal areas of South Korea, Japan, Vietnam, and China’s eastern seaboard share some common cultural characteristics and a similar economic strategy. But much of central and western China is mired in poverty; Indonesia belongs to a different world culturally and economically; and India is a very different Asia as well. Nor does Asia cohere politically; parts of it are democratic, other parts are ruled by despots.
Moreover, there is no “Asian” economic system: China’s state capitalism does not belong to the same category as the private capitalism practiced in Japan and Korea. India remains largely an agricultural economy, dotted with small business and service-sector dynamism.
Asia also has no decision center, nor coordinating institutions comparable to NATO or the European Union. This is important, because, whereas the West is relatively at peace with itself, Asia is riddled with actual conflicts (within and around Pakistan) and looming ones all around the South China Sea.
Indeed, were NATO and the US military ever to leave Asia, the threat of war would increase, heavily disrupting trade, and Asia’s economic dynamism would not survive. It is hard to believe in an Asia Century when Asia’s security depends on non-Asian security forces.
Another of Asia’s relative weaknesses comes from its poor record on innovation, a fundamental building block of prolonged economic dynamism. Chinese exports (up to now) have contained little added value and a lot of cheap manpower, and the sophisticated products that it does produce, such as smart phones, have been conceived in the West. Japan and South Korea are much more creative, but they still often improve products and services initially invented in the West.
Asia’s lagging capacity for innovation is probably rooted in its rote education: Asian students, when they have the opportunity, flock to North American and European universities. And then they stay: 80% of Chinese students in the US do not return to China.
In many ways, Asia’s undeniable progress reflects its conversion to Western values. Capitalism, democracy, individualism, gender equality, and secularism are Western notions that have been adopted in Asia.
True, there are backlashes in Asia against Westernization, and some try to promote so-called Asian values, such as the “harmony principle.” But these attempts are weakened by their underlying political motivation. The idea of harmony, for example, is a rich philosophical concept in classic Buddhism and Confucianism. It deserves better than to be dressed up in Communist or despotic garb to block democratization. One also regrets that not much is done in India to keep alive the philosophy and spirit of Mahatma Gandhi, one of Asia’s few twentieth-century universal thinkers.
The prophecy of an Asian Century also ignores all of Asia’s disorderly and declining nations, such as Thailand and Japan, respectively. But it cannot rely only on some local economic breakthrough without any broader cultural and strategic underpinning.
The fragility of Asia does not mean that Western domination is guaranteed: with its universities, cultural values, entertainment industry, and strong military, the West keeps an edge, but maybe not forever. More probably, while we try to compare the relative power of the West and the East, we are clinging to an obsolete vocabulary. Our criteria belong to the past.
After all, there is no such thing as an autonomous “national economy” nowadays. Almost all products and services are global. The more sophisticated a product or service is, the more its national identity tends to disappear. There are no peculiarly Western or Eastern mobile phones or financial derivatives. When China buys US Treasury bills, who depends on whom? Exchange generates interdependence. When Asia grows, the West does not become poorer. From now on, we progress together, or we do not progress at all.
Similarly, there is no contradiction between the West and Asia when it comes to threats to global security, like terrorism or nuclear rogue states. Pop culture is perhaps the clearest example of this universality. Korean rock singers are extremely popular in China. Are they Korean or American? More probably, they are global.
So we have not entered the Asian Century; we have entered the first Global Century. But global civilization is such a new phenomenon that we do not yet fully understand what is happening to each of us: we cling to old concepts in order to describe our emerging world. It may not be a better world, but it will be a very different one.
Guy Sorman, a French philosopher and economist, is the author of Economics Does Not Lie.
Copyright: Project Syndicate, 2010.
www.project-syndicate.org
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belgradetokyo 03:13 02 Apr 10
There arn't any tendancies by Asian nations to create a EU style central command center. The diversity of Asia, from a Europen point of view possibly seen as incoherent and chaotic, is its underlying strength. Regional multilateralism is not new in Asia, ASEAN has been around for decades and is working quite well considering the enormous obstacles it faced over the years, and an east-Asian economic community is gradually forming. A south-Asian community alliance is far off right now but not out of sight.
While it served as a stabilizing force facilitating economic growth in much of Asia during the Cold War, the US military presence is increasingy viewed as a distabilizing factor in the region. The present crisis in Pakistan is a result of the war to its west. The view that a gradual US military scaledown on the Korean peninsula and Japan will speed up North Korea's willingnes to negotiate, is becoming more vocal in these countries. After all, China and Vietnam have independently moved from being on a war path to a relationship of dynamic economic and cultural exchange. This "Asian style" transformation of realtions based on economic interdependency should serve as a beacon of hope for India and Pakistan.
quahch 09:33 29 Apr 10
The real problem is in a globalized economy, we still have floating exchange rates between the major currencies which are not beneficial at all, perhaps only for the carry traders.
As Mundell puts it, we should have a world currency or fixed rates between the US dollar, yen, euro, and even renminbi.
Quah, Chee Heong
newindiablog 10:04 09 Jun 10
Mr. Sorman - India should not be considered as agricultural economy anymore. Only 20% of the GDP is from agri sector versus 60% from services and 20% from manufacturing. Both manufacturing and services continue to grow. However, majority of the population still depends on agri sector but that is changing very fast as the level of education, growth of manufacturing sector and urbanization is increasing.
Agree fully that Asia is not one!
ganeshpol 10:27 13 Oct 10
The Playfield is being levelled!!!!
SeoKungFu 06:23 01 Apr 10
"From now on, we progress together, or we do not progress at all." sums it all up !