The following is an opinion editorial by Ong Bo Yang. His bio and information can be found at the bottom of the article. His opinions are his own.
Economists and political experts have long predicted that the Asian century will arrive sometime in the 21st century, where Asia is expected to play a major influence in global affairs, particularly economic-wise, and in international relations.
The RCEP deal was signed on 15 November 2020 by Australasia nations and 13 Asian countries, illustrating Asia’s willingness to embrace multilateralism and ensure greater economic integration in the Asia-Pacific region.
In Asia, there are three economic powerhouses, namely China, Japan, and India, amongst the top 6 largest economies in the world.
China opened up in 1978, leading to dramatic social and economic changes in the country, reducing poverty for more than 800 million Chinese nationals in the process. The Asian country has continued to liberalize its economy and open up to foreign investors in recent years.
Today, China is a superpower with immense global influence internationally and regionally. The second-biggest economy in the world is a major trading partner with many Asian countries and will be crucial to Asia’s development during the Asian century.
There are 4 Asian cities on the 2020 Global Cities Index top 10 lists, with the likes of Tokyo, Beijing, Hong Kong, and Singapore. This evidently reflects that Asian cities are highly connected internationally, and have a major influence on the global economy.
Crucial to these cities’ success includes having high education standards, strong governance and leadership, and world-class infrastructure.
Previously in 2019, the World Economic Forum had forecasted that the Asian century will occur in 2020.
Regrettably, the Coronavirus pandemic had a negative impact on the social and economic progress made by Asian countries.
Nevertheless, Asian countries have controlled the spread of the Coronavirus pandemic better than Western countries in general, and are on track to make a speedy economic recovery in 2021.
Many Asian countries have started vaccination drives, in hopes of achieving herd immunity, and to control the spread of the Covid-19 pandemic.
China has agreed to provide vaccines to Asian countries such as Indonesia, Malaysia, Pakistan, Singapore, Sri Lanka, and Thailand.
During the pandemic, digitalization grew in prominence and was expedited, as movement restrictions made it imperative to purchase goods and services digitally.
Currently, Asia comprises approximately half of the global internet user base.
Irrefutably, digitalization will be key to Asia’s economic recovery, especially in developing Asian countries with a significant increase in internet and smartphone utilization rates.
The Economist Intelligence Unit forecasted that innovation and digitalization can contribute an additional US$1trillion to Asia’s GDP.
Singapore is increasingly an attractive destination for Chinese companies, especially tech giants such as Alibaba, ByteDance, and Tencent, who have all decided to set up regional hubs in the Asian country.
Southeast Asia unicorns such as Grab, Lazada, and Razer have already established their headquarters in Singapore.
According to the IMF, before the pandemic, Asia had an annual GDP growth rate of 7.3% on average.
Post pandemic, Asia is expected to be the fastest-growing region in the world. According to Mckinsey, Asia will account for half of the world’s GDP by 2040, and 40% of the global consumption volumes. Unsurprisingly, this is primarily driven by Asia’s current 4.6 billion population, accounting for approximately 60% of the global population.
Asia’s economic growth will be galvanized by local and regional markets, a middle class of 3 billion people, and innovative technology improving expeditiously. Increasing investment into Asia will also boost Asian economies and create millions of jobs.
With the bulk of the world’s economic activities happening within Asia, the region will be undoubtedly viewed as the world’s primary economic zone.
As a result, Asia’s income gap with Western countries has decreased over the years, as income levels continue to rise.
In order to realize the Asian century, the US-China conflict has to be managed well, with Asian countries continuing to maintain a neutral stance and not choose sides.
India might not have joined the RCEP together with its Asia-Pacific counterparts. Nevertheless, India has one of the biggest economies in the world and it would be beneficial for Asia to engage and collaborate more with India.
Asia is an extremely diverse region with different languages, cultures, governing styles, and perspectives. It would be of paramount importance for constant dialogues and meetings, in order to reconcile differences, to understand each other better, and see how all parties can collaborate together in a win-win situation.
The Asian century is inevitable but the more important question is how Asia can ensure that economic prosperity and income distribution is more equitable, and how the region can contribute to a more peaceful and prosperous international community.
Ong Bo Yang
Writer name: Ong Bo Yang
I am currently a Master of Science student at the University of Warwick, majoring in Programme and Project Management. I have written Op-Eds for 9 ASEAN newspapers, namely Thailand’s Bangkok Post, The Pattaya News, Chiang Rai Times, and TPN National, Cambodia’s The Phnom Penh Post, Malaysia’s Daily Express, Myanmar’s The Myanmar Times, Singapore’s The Business Times, and Vietnam’s VnExpress.