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'We Ignore Asia Only At Our Peril'

Robert A Manning

It was a deliciously symbolic millennial event. The last remaining colony in Asia, the tiny Portuguese enclave of Macao, was returned to China on December 20 after 442 years -- the entire modern era -- under Western control.

Despite the "Asian miracle" hype in recent years, despite the 1997 financial crash, the remarkably swift rise of Asia is for real. And it is one of the truly remarkable phenomena of the 20th century -- and a burgeoning political fact that will reshape the contours of world power in the 21st century.

The telltale signs of Asia rising abound. Only three weeks before the Macao turnover, Beijing had launched its first orbiting space vehicle, prelude to a manned space program. This, at the same moment as 16 Asia-Pacific nations -- including all key US allies in the continent -- gathered in Manila to conceive the seeds of an Asian economic and financial union: no Anglo-Saxons invited.

Greater China (China, Hong Kong, Taiwan) Japan and Korea together hold some $ 700 billion in foreign reserves, more than half the world's total, and three of the world's 10 largest economies. A recent earthquake in Taiwan threatened the world computer industry with semiconductor shortages, as the 1995 Kobe earthquake in Japan threatened liquid crystal computer screens.

China alone is the world's second largest consumer of energy -- and its per-capita energy consumption is 10 times less than that of the US. In 1998, India (along with Pakistan) demonstrated its membership in the nuclear weapons club. Last year, trans-Pacific air travel surpassed that of the Atlantic. And we will not even go into the global craze of Pokemon.

Asia also poses world-class challenges to global security in the new century. A heavily armed Asia features three nuclear weapons states, one virtual nuclear weapons state (Japan), an array of ballistic missile powers, and a region that includes two of the world's six largest defense budgets. More ominously, it is also the locus of the world's most dangerous flashpoints for conflict: the Korean Peninsula, the Taiwan strait and the Indo-Pakistani standoff.

Yet this emergence of the world's first successful non-Western civilizations tends to be either taken for granted or ignored in a United States that even after the Cold War remains remarkably Eurocentric. This, despite more than $ 520 billion in annual two-way trade between the United States and the Asia-Pacific and some $ 250 billion in foreign direct investment (roughly $ 125 billion each way).

And despite the fact that Americans have fought three major wars in Asia since 1941, yet the US and Europe still seem to strategically discount Asia.

Maybe it all just happened too fast. After all in 1960, the per-capita gross domestic product of South Korea was less than $ 100, roughly equal to the Congo or Kenya. Before the 1997 financial crisis, Korean per capita GDP exceeded $ 10,000, and Seoul joined the industrialized nations club, the OECD.

The story is similar for the other "Asian Tigers": Singapore, Hong Kong and Taiwan. Malaysia and Thailand are moving in the same direction. Much of east Asia has accomplished in little more than a generation economic development that took 180 years in the west. Comparable economic success still eludes much of the former communist bloc in Russia and Central Europe.

Whether you call it a miracle or not, much of Asia is following the path of Japan, which in similar breakneck speed, in little more than a generation from the Meiji restoration in the l870s, became the first successful non-white society in the modern age, shocking the world by defeating the Russian Navy in 1905.

Though sobered by the '97 economic crisis, the elements of Asian success -- export-led growth, high savings rates, emphasis on education, prudent macroeconomic management -- have altered notions of economic development.

That an Asian middle class has begun to emerge can also be measured in political change. After nearly three decades of dynamic economic growth, suddenly, in the late 1980s emerging middle-classes began forcing military-led regimes out and democracy in -- in the Philippines in 1986, in South Korea in 1988, in Taiwan in 1988, in Thailand in 1990, and even Indonesia in 1999.

And then there is China, which has averaged over nine per cent growth for the past two decades, lifting more than 200 million people out of absolute poverty, all the while resisting political change. Yet if the ambitious market-oriented economic reforms that Beijing's authoritarian regime is pursuing succeed, China could have a middle-class by 2025 as large as the entire US population. And that would presumably be a middle-class likely to demand more accountable governance.

Add India, with its slow but steady growth, and consider a generation hence the implications on the global economy, the environment and world politics of a 500-million strong Chinese and Indian middle-class, joined by perhaps 100 million or more out of the 500 million people of southeast Asia.

These burgeoning middle classes have begun to shift regional patterns -- toward more intra-Asian trade and investment and toward more domestic-led growth.

Asia's emergence already has begun to shift some global patterns, though many in the west seem oblivious to these changes. For example, one of Washington's best-kept secrets is that the US gets less than 10 per cent of its oil from the middle-east. The workings of the global oil market tend to be based largely on transport. Already some two-thirds of Persian Gulf crude is exported to Asia, and an oil-thirsty Asia increasingly depends on Gulf/middle-east crude, already nearly 80 per cent of its imports. It was a sign of the times when Chinese President Jiang Zemin made the first-ever trip by a top Chinese leader to Saudi Arabia last November. The geopolitical implication of the burgeoning Asia-middle-east energy nexus is one of the great strategic questions of the 21st century.

The councils of global governance have yet to feel Asia's strategic weight. Neither the permanent membership of the UN Security Council nor the G-7 group of industrialized nations reflects Asia's military or economic gravitas. Similarly, as the breakdown of the World Trade Organization talks in Seattle underscore, the great Asian trading powers will increasingly shape the future of global trade. These anomalies may explain why Japan proposes an Asian Monetary Fund, or why an "Asians only" idea for a free trade and currency union surfaces. And the West has yet to contemplate successful Confucian, Buddhist and Hindu societies' impact on world civilization.

As we contemplate how Asia's rise may shape the third millennium, it might be useful to consider how it may be a case of "back to the future." At the turn of the first millennium, to the modern era (when Portuguese explorers landed in Macao), if there was a single superpower, it was China. During Europe's Dark Ages, China during the Sung dynasty (960-1279) and into the Ming dynasty had the world's largest and most technologically advanced economy, the largest urban centers, and the most sophisticated military, with a remarkable 1.25-million standing army. Among other innovations, it invented movable type, paper money, gunpowder and rocketry.

In a sense the rise of China, and Asia more broadly, may mark the recapturing of a bit of the region's pre-modern realities. To be sure, the United States will remain the pre-eminent power over the next few decades. But ponder the world of 2050: an Asia with more than half the world population, perhaps 40 per cent of the global economy, more than half the world's information-technology industry and world-class high-tech military capabilities. Don't be surprised if a "back to the future" reality lies ahead, with the world in the next thousand years bearing more resemblance to the world at the beginning of the last millennium.

Clearly, we ignore Asia only at our peril.

Robert A Manning, a contributing editor to IntellectualCapital.com, is a senior fellow at the Council on Foreign Relations

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