Berlin, Birthplace of Modern Asia

NEW DELHI – By marking the Cold War’s end and the looming collapse of the Soviet Union, the fall of the Berlin Wall 20 years ago transformed global geopolitics. But no continent benefited more than Asia, whose dramatic economic rise since 1989 has occurred at a speed and scale without parallel in world history.

For Asia, the most important consequence of the fall of the Berlin Wall was that the collapse of communism produced a shift from the primacy of military power to economic power in shaping the international order. To be sure, rapid economic growth also occurred during the Industrial Revolution and in the post-WWII period. But in the post-Cold War period, economic growth by itself has contributed to altering global power relations.

Another defining event in 1989 was the Tiananmen Square massacre of pro-democracy protestors in Beijing. If not for the Cold War’s end, the West would not have let China off the hook over those killings. Instead, the West adopted a pragmatic approach, shunning trade sanctions and helping to integrate China into the global economy and international institutions through the liberalizing influence of foreign investment and trade. Had the United States and its allies pursued an approach centered on punitive sanctions, as with Cuba and Burma, the result would have been a less prosperous, less open, and potentially destabilizing China.

Indeed, China’s phenomenal economic success – illustrated by its world-beating trade surplus, world’s largest foreign-currency reserves, and highest steel production – owes a lot to the West’s decision not to sustain trade sanctions after the Tiananmen Square massacre. Having vaulted past Germany to become the world’s biggest exporter, China now is set to displace Japan as the world's second largest economy.