The Future is Asian , proclaims Parag Khanna, acclaimed globalist and author of this seminal book launched in February 2019.
According to the book review on Amazon.com, "Far greater than just China, the new Asian system taking shape is a multi-civilizational order spanning Saudi Arabia to Japan, Russia to Australia, Turkey to Indonesia—linking five billion people through trade, finance, infrastructure, and diplomatic networks that together represent 40 percent of global GDP. China has taken a lead in building the new Silk Roads across Asia, but it will not lead it alone. Rather, Asia is rapidly returning to the centuries-old patterns of commerce, conflict, and cultural exchange that thrived long before European colonialism and American dominance. Asians will determine their own future—and as they collectively assert their interests around the world, they will determine ours as well".
Evidently, Khanna's Asia is far more extensive, extending to Russia and the Middle East. A more circumscribed study of the emerging dominance of Asia comes in the form of a discussion paper dated September 2019 by McKinsey Global Institute- The future of Asia: Asian flows and networks are defining the next phase of globalization .
The paper makes the following salient observations -
(a) By 2017, Asia accounted for 42% of global GDP in terms of purchasing power parity, ahead of 40% of Europe and North America combined. By 2040, Asia's share is expected to increase to 52% in PPP terms and 46% in real terms, representing 39% of global consumption.
(b) Global cross-border flows are shifting toward Asia on seven of eight dimensions—trade, capital, people, knowledge, transport, culture, resources, and the environment. The only flow that has declined is waste (environment).
(c) Asia’s integration is increasing with a shift toward regionalization. 60% of goods traded, 71% of investment in start-ups and 59% of foreign direct investment (FDI) are intraregional, with 74% travelling within the region.
(d) Asia is not monolithic but rich in diversity, resilience, and competitive strengths, yet highly integrated and mutually complimentary in metrics of innovation, market, labour, capital and cultural diversity.
(e) There are Four Asia's: Advanced Asia (Australia, Japan, New Zealand, Singapore, and South Korea) with strengths in technology, capital and high-end consumption; China, a class of its own, acting as Asia's anchor an hub in connectivity and a hotbed for innovation; Emerging Asia (Bhutan, Brunei, Cambodia, Indonesia, Laos, Malaysia, Mongolia, Myanmar, Nepal, the Philippines, Thailand, and Vietnam) with dynamism in labor productivity, growth potential and intraregional connectivity; and India and Frontier Asia (Afghanistan, Bangladesh, Fiji, Kazakhstan, Kyrgyzstan, Maldives, Pakistan, Sri Lanka, Tajikistan, Turkmenistan, and Uzbekistan) with a large, young population and broader range of external trading relationships outside Asia.
(f) By 2040, China's GDP is likely to reach $36 trillion, bigger than the rest of the Four Asia's combined ($31 trillion)
(g) As China shifts from labour-intensive manufacturing, thanks to US-China trade war, Emerging and Frontier Asia's are picking up a share of this relocation. Advanced Asia and China are leading start-ups in Emerging Asia.
(h) Asia is a dynamic hub for people, idea and culture flows. By 2018, outbound international airline passengers had risen to more than 415 million. A number of cities are becoming more cosmopolitan, such as Seoul, Bangkok, Manila, Hanoi, and Auckland.
It is evident that the 21st century is being redefined by Asia's growing connectivity and gravitas, where China is likely to exercise an outsized role. Apart from the Asian Infrastructure Investment Bank (AIIB), the New Development Bank, and the Belt and Road, China and much of the rest of Asia will be even more closely bound together when the Regional Comprehensive Economic Partnership (RCEP) Agreement is concluded by the end of this year. This will cover ASEAN and all their respective free trade agreement partners, representing 47.4% of world population, 32.2% of global economy, 29.1 % of global trade, and 32.5% of global investment flows.
There are also good reasons for China to be welcomed and to join the Comprehensive and Progressive Trans-Pacific Partnership Agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam effective December 2018.
Against the above background, any grand strategy to isolate or decouple China may increasingly seem like a pipedream.
