Opinion | The future of Asia will be dominated by regionalism, growth – and climate change

As Asia urbanises and industrialises, there is a pronounced trend in regionalism – with trade and tourists staying within the area. But, in a multipolar world, any one country is unlikely to dominate

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Chinese tourists at the Maha Bandula park in Yangon. Asian economies are becoming increasingly interconnected, in terms of trade and travel. Photo: EPA-EFE

Published: 11:15am, 28 Sep 2019Updated: 11:15am, 28 Sep 2019

Is the future truly Asian? This question is at the heart of the tensions across the Pacific. If you were to ask Parag Khanna, author of The Future is Asian , the answer would seem obvious. However, if you read his book carefully, you will find a more nuanced answer: he thinks global power will be shared between Asian and Western civilisations.

For the West, the rise of Asia has been frighteningly fast because, as late as 1960, most of Asia was poor, agricultural and rural, with an average income per capita of less than US$1,000 in 2010 prices. But in 50 years, Asia has become more urban and industrialised and is becoming a challenge to the West in terms of trade, income and innovation.

The McKinsey Global Institute has just published an in-depth study of the future of Asia that highlights why the region is both attractive to businessmen and yet feared as a competitor. Conventionally, Asia is divided geographically into Northeast Asia, Southeast Asia, South Asia and Central Asia. But McKinsey has classified the Asian economies differently, into four groups it says are distinct yet complementary.

First, there is “Advanced Asia”, comprising Japan, Australia, New Zealand, Singapore and South Korea, each highly urbanised and with a per capita income exceeding US$30,000. This group provides technology, capital and a market for higher-end consumption to the rest of Asia, but it is ageing fast.

Second, there is China, the world’s largest trading economy and a growing consumer powerhouse. By 2030, the Chinese consumer market will be equal to those of western Europe and the US combined. Increasingly, China is also a capital provider to the rest of the world.

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