The Re-Emergence of the Re-Emergence of Asia

Abstract

IN MAY 1997, ON THE EVE OF THE ASIAN FINANCIAL CRISIS and in middle of Canada's unfortunately timed Year of Asia Pacific, Asian Development Bank (ADB) launched publication entitled Emerging Asia: Changes and Challenges.(1) This unabashedly upbeat assessment of Asia's economic potential was quietly downplayed when severity of Asian crisis became evident, and report gradually fell into obscurity. A rereading of Emerging Asia suggests that it may have suffered premature absolescence and deserves broader appreciation even today. A central assertion in report is that Asia was not so much emerging as it was re-emerging to assume dominant position in world economy that it once held. It is estimated that Asia accounted for about 60 per cent of world GDP at purchasing power parity prices as recently as 1820. By 1950, after decades of complacency, corrupt leadership, foreign domination, and war, Asia's share of world output had fallen to under 20 per cent.(2) Nearly 50 years later, Asia's share has risen to around 40 per cent, and region as whole is on track to once again produce more than half of world's goods and services within next decade.The idea that Asia will re-emerge as global powerhouse is recurrent theme among economic historians and futurologists. In 1980s, this idea was expressed in terms of Japan's formidable export machine and in astronomical valuations of Japanese real and financial assets. In early 1990s, focus was more diffuse--as epitomized in World Bank's iconic 1994 publication, The East Asian Miracle: Economic Growth and Public Policy, covering range of Asian newly industrializing countries.(3) Not to be outdone, ADB's Emerging Asia projected Miracle to 2025 and, with some cautionary warnings about environmental and social sustainability, hinted that India--a hitherto laggard among Asian economies--might be at heart of Asia's re-emergence by third decade of new century. Today, however, re-emergence thesis is firmly centered on China. Even sober commentators such as Martin Wolf of Financial Times have gushed about Asia's rise as the economic event of our age. He writes: Should it proceed as it has over last few decades, it will bring two centuries of global domination by Europe and, subsequently, its giant North America offshoot to an end. Japan was but harbinger of an Asian future. The country has proved too small and inward-looking to transform world. What follows it--China, above all--will prove neither.(4)There is no shortage of skepticism about either re-emergence thesis or about China's role in leading Asia's renaissance. A recent RAND corporation report, for example, catalogues major challenges, fault lines, and potential adversities that China's economic development will encounter over next decade.(5) Another recent commentary, by editor-in-chief of Foreign Policy magazine, asserts that it is impossible for China to avoid politico-economic crisis in next decade. He suggests that coming crisis will likely start as a financial accident [which] turns into political maelstrom as its social aftershocks spread.(6)Needless to say, re-emergence thesis is central to one's view on future of Canada-Asia relations. It is important to stress, however, that this thesis--in its most expansive formulation--is not about incremental change in Asia and how that might affect handful of Canadian scholars, traders or diplomats. It is about seismic shift in global economic and political influence that will change way business is done, and with whom. Even among those who accept essential premises of re-emergence thesis, there is tendency to respond with very modest and incremental foreign and commercial policy changes: new consulate here, another trade commissioner there, occasional visit to an Asian capital by our prime minister, and so on. …