Table Of ContentAsia’s Rise in the 21st Century
ASIA’S RISE IN THE 21ST
CENTURY
Scott B. MacDonald and Jonathan Lemco
Copyright2011byScottB.MacDonaldandJonathanLemco
Allrightsreserved.Nopartofthispublicationmaybereproduced,storedinaretrieval
system,ortransmitted,inanyformorbyanymeans,electronic,mechanical,
photocopying,recording,orotherwise,exceptfortheinclusionofbriefquotationsina
review,withoutpriorpermissioninwritingfromthepublisher.
LibraryofCongressCataloging-in-PublicationData
MacDonald,ScottB.
Asia’sriseinthe21stcentury/ScottB.MacDonaldandJonathanLemco.
p.cm.
Includesbibliographicalreferencesandindex.
ISBN978–0–313–39370–9(pbk.:alk.paper)—ISBN978–0–313–39371–6(ebook)
1.Economicdevelopment—China—21stcentury.2. Economicdevelopment—Asia—
21stcentury.3. China—Economicconditions—21stcentury.4. Asia—Economic
conditions—21stcentury.5. Asia—Economicintegration—21stcentury. I.Lemco,
Jonathan.II.Title.
HC427.95.M337 2011
330.95—dc23 2011025912
ISBN:978–0–313–39370–9
EISBN:978–0–313–39371–6
15 14 13 12 11 1 2 3 4 5
ThisbookisalsoavailableontheWorldWideWebasaneBook.
Visitwww.abc-clio.comfordetails.
Praeger
AnImprintofABC-CLIO,LLC
ABC-CLIO,LLC
130CremonaDrive,P.O.Box1911
SantaBarbara,California93116-1911
Thisbookisprintedonacid-freepaper
ManufacturedintheUnitedStatesofAmerica
CONTENTS
Preface vii
1. Introduction 1
2. The Great Divergence 14
3. The Rise of China 33
4. Constructing the New Asian Economy 55
5. The Supporting Cast: BRICs and Beyond 74
6. The Major Economic Challenges 94
7. Political Challenges in Asia 115
8. The West and the Rise of Asia 134
9. Conclusion 151
Notes 161
Bibliography 175
Index 189
PREFACE
Several centuries ago, Asia was ahead of Europe in many areas. Around
1500 the two regions started to diverge, and Asia fell behind. The West
(which came to include North America) went ahead—economically and
militarily—and has long been the dominant force, pushed along by the
globalizingtendenciesofIberian-,Dutch-,French-,British-,andcurrently
U.S.-dominated international systems. That is changing, however, with
the sustained resurgence of Asia’s economies since the second half of
thetwentiethcentury.TheriseofChinaisaparticularcatalystinthispro-
cess,adevelopmentthatiscomplementedbyadvancesinotheremerging
Asian economies, in particular India, Korea, Singapore, Thailand, and
Indonesia. In a very broad sense, Asia is closing in on the West in terms
of economic and political power. With this highly significant develop-
ment, it is critical to understand that the terms of the debate about global
power and globalization are changing. Globalization, the process by
which local markets and cultures are becoming more uniform and stand-
ardized as to international norms and practices, is no longer a Western
phenomenon. It is increasingly a compositewith growing Asian content.
Thisisamajorchangefromthe1990sandearly2000swhenglobalization
was synonymous with the United States. If nothing else, the global
economiccrisisof2008–9underscoredthatfortheglobaleconomytostay
afloat and move to a recovery mode, policies needed to be synchronized
and that Asia,China in particular,had avery important roleto play.
It is important for the rest of theworld to understand these trends and
their implications. For the business community, be it finance, retail, or
viii PREFACE
manufacturing, the need to have a better comprehension of the changing
Asianeconomyandtheregion’srisingpowerismoreimportantthanever.
Ignoranceoftheoutsideworlddoesnotstandasanexcuseinaglobalized
economy.AmericansshouldheedthewordsofSingapore’sformerambas-
sadortotheUnitedNationsanddeanoftheLeeKuanYewSchoolofPub-
lic Policyat the National University of Singapore: “No country did more
than the United States to spark the rise of East Asia. But paradoxically,
America is among the countries least prepared to handle the rise of East
Asia.”1 Indeed, ignorance of the rest of the planet is an invitation for
misunderstandings and the spread of xenophobia, isolationism, and
protectionism, all detriments to the advances of the exchange of goods,
services, andideas.
This bookismeanttoinformandmakepeoplethink,eveniftheyhave
profounddisagreementswithourviews.Alongtheselines,webelievethat
thetwenty-firstcenturywillbedefinedbytheriseofAsia,theimpactofa
China-dominated region, and the response of the West to these trends.
CertainlypartoftheequationisthenatureoftheSino-Americanrelation-
ship, but it is also defined by China’s interactions with Brazil, Russia,
India, and China (the BRICs) and other emerging market countries, such
asSouthAfrica,Turkey,Indonesia,andColombia.Consideringtheimpor-
tance of emerging markets to global economic growth, the rise of Asia
mustbe observed through its linkagesto non-Western countries.
TheaudienceforthisbookincludespeopleconductingbusinessinAsia,
businessstudentsthataresoontoenterthejobpool,andstudentsofAsian
studies and international economics. Considering Asia’s already wide-
ranging impact on the West, the trend appears to be accelerating in the
2010s, making the need to understand the region all the more important
in terms of strategic planning, business development, and even personal
lifestyles. If nothing else, Asia and the West remainvery closely linked,
their economic strategies mutually reinforcing, with their objectives
largely in the same zip code. Aworld of synchronized economic policies
provides a far better business environment than aworld of out-of-control
economic and political rivalries. And we have observed that shift before
in the early twentieth century when the rise of Germany helped end a
globalizingeconomicorder.
Although manyhands helped stir the creativepot, the authors take full
responsibility for their work. Theviews expressed here are our own and
do not in any fashion represent those of Aladdin Capital Management,
LLC,orVanguard,thoughthesupportoftheseinstitutionsisappreciated.
WewouldliketothankAndyMurkerjeeofBloomberg(Singapore);Leslie
Norton of Barron’s Professor Emeritus Richard L. Sims of the School of
PREFACE ix
Oriental and African Studies (London); Professor William W. Grimes of
the Department of International Relations, Boston University; Ricardo
Hernandez of National Bank Financial; Dr. Dale Smith; Takahiro Onishi
of Mitsubishi UFJ Securities International; Anusha Shrivastova (PhD) of
Dow Jones; Li Zhu (PhD); and Steve Xia (PhD) of Vanguard’s Risk
Management and Strategic Analysis group for their comments and time.
Professor Elizabeth Hansen of the Department of Political Science,
Universityof Connecticut was also a useful sourcewith whom to discuss
ideas, especially onglobalization and India. Thanksare equallyextended
to Professor Yu Zheng, Department of Political Science, University of
Connecticut. We also benefited from discussions on globalization and
Japan with Kenji Kobiyashi of Mitsubishi Corporation. David Levey,
formerly of Moody’s, was most helpful in supplying a number of
thought-provokingarticles.
Last, but hardly least, the authors, Scott B. MacDonald in particular,
would like to acknowledge their gratitude through theyears to Professor
Albert L. Gastmann, Department of Political Science, Trinity College,
who passed away in 2007. Hewas always ready for rigorous intellectual
debate,entertainingtales,goodfood,andfinewine.Hispresenceasfriend
and mentor is sorely missed, especially his ability to point out important
nuances as he did in the early stages of this book. Gratitude is also
extended by MacDonald to another Professor of Political Science at
TrinityCollege,RanbirVohra,whowasasignificantinfluenceinhislook-
ing East—allof thoseseminars onChinese politicsdid payoff.
Theauthorswouldalsoliketothanktheirfamiliesfortheirsupportand
indulgence.Without them,none of thiswork wouldbeworthit.
