by Parag Khanna
7 The Shanghai Futures Exchange and its subsidiary International Energy Exchange have already launched renminbi-denominated oil contracts.
8 “GCC Needs to Invest $131bn to Meet Five-Year Power Demand,” Arabian Business, Jan. 18, 2018, https://www.arabianbusiness.com/energy/387887-gcc-needs-to-invest-131bn-to-meet-five-year-power-demand.
9 Carlotta Gall, “In Afghanistan, U.S. Exits and Iran Comes In,” New York Times, Aug. 5, 2017.
10 Ziad Haider, “Can the U.S. Pivot Back to Asia? How Trump Should Respond to China’s Belt and Road Initiative,” Foreign Affairs, May 23, 2017, https://www.foreignaffairs.com/articles/china/2017-05-23/can-us-pivot-back-asia.
11 Xi Jinping, “Secure a Decisive Victory in Building a Moderately Prosperous Society in All Respects and Strive for the Great Success of Socialism with Chinese Characteristics for a New Era,” speech delivered at the 19th National Congress of the Communist Party of China, Oct. 18, 2017, http://www.xinhuanet.com/english/download/Xi_Jinping’s_report_at_19th_CPC_National_Congress.pdf.
12 In 2017, the United States suspended military assistance to Pakistan for noncompliance with its counterterrorism objectives in Afghanistan.
13 https://www.timesnownews.com/international/article/pakistan-elections-2018-united-states-of-america-used-pakistan-as-hired-gun-pakistan-tehreek-e-insaf-imran-khan-nawaz-sharif-pakistan-muslim-league/257073.
14 https://en.dailypakistan.com.pk/pakistan/pakistan-should-not-become-scapegoat-for-us-policy-failure-imran-khan/.
15 James Leibold, “China’s Minority Report: When Racial Harmony Means Homogenization,” Foreign Affairs, March 23, 2016, https://www.foreignaffairs.com/articles/china/2016-03-23/chinas-minority-report; Sara Newline, “Growing Apart? Challenges to High-Quality Local Governance and Public Service Provision on China’s Ethnic Periphery,” Harvard Kennedy School Ash Center for Democratic Governance and Innovation, July 2016, http://ash.harvard.edu/files/ash/files/growing_apart.pdf.
16 The member states of ASEAN are Indonesia, Vietnam, Thailand, Singapore, Myanmar, Malaysia, the Philippines, Laos, Cambodia, and Brunei. East Timor and Papua New Guinea are expected to join in the coming years.
17 “Laos: On the Borders of the Empire,” Al Jazeera, May 25, 2017, https://www.aljazeera.com/programmes/peopleandpower/2017/05/laos-borders-empire-170522105221541.html.
18 Oil-rich Brunei has a small claim on the South China Sea due to its possession of the disputed Louisa Reef but has remained quiet as its exports to China have grown from nearly zero in 2003 to almost $2 billion in 2015 due to the establishment of the Brunei-Guangxi Economic Corridor.
19 As if to emulate East Asian countries’ aggressive innovation promotion strategies, Australia’s Department of Education and Training issued a directive in 2018 that universities receiving public funding must demonstrate the contributions of their research to the economy, society, or culture and will be ranked by panels to determine future funding.
20 Leo Lewis and Shunsuke Tabeta, “Japan Business Leaders Urge Real Globalisation,” Financial Times, Jan. 12, 2016, https://www.ft.com/content/80bb0344-78d6-11e5-a95a-27d368e1ddf7.
21 Takako Taniguchi and Kazunori Takada, “Japan Notches $18 Billion of Soured Deals amid M&A Boom,” Bloomberg, June 6, 2017, https://www.bloomberg.com/news/articles/2017-06-05/japan-notches-18-billion-of-soured-deals-amid-record-m-a-boom.
22 “Record 2.38 Million Foreign Residents Living in Japan in 2016,” Japan Times, March 17, 2017, https://www.japantimes.co.jp/news/2017/03/17/national/record-2-38-million-foreign-residents-living-japan-2016/#.W37WGooh2Uk.
23 Shusuke Murai and Tomoko Otake, “ ‘Bakugai,’ ‘Toripuru Suri’ Share Top Honors as This Year’s Most Memorable Buzzwords in Japan,” Japan Times, Dec. 1, 2015, https://www.japantimes.co.jp/news/2015/12/01/national/bakugai-toripuru-suri-share-top-honors-years-memorable-buzzwords-japan/#.W37WUooh2Uk.
24 Kate Springer, “Japan’s Fukuoka Poised to Be the Country’s Next Silicon Valley,” CNN, Nov. 16, 2017, https://money.cnn.com/2016/11/16/technology/fukuoka-startup-city/index.html.
25 “Singapore, Korea and Japan Most Innovative Countries in Asia,” HRM Asia, June 19, 2017, http://www.hrmasia.com/content/singapore-korea-and-japan-most-innovative-countries-asia.
26 Kenji E. Kushida, “Japan’s Startup Ecosystem: From Brave New World to Part of Syncretic ‘New Japan.’ ” Asian Research Policy 7, no. 1 (2016): 67–77.
27 Even though Japan has followed a nonnuclear policy since World War II, in 2017 its parliament approved an accord to sell nuclear reactor technology to India, which has long held out from signing the Treaty on the Non-Proliferation of Nuclear Weapons (NPT).
28 Doug Bandow, “Time to Let Japan Be a Regular Military Power,” The National Interest, Oct. 29, 2017, https://nationalinterest.org/feature/time-let-japan-be-regular-military-power-22954.
29 Zhao Tingyang, “Rethinking Empire from a Chinese Concept ‘All-Under-Heaven’ (Tian-xia, 天下).” Social identities 12, no. 1 (2006): 29–41.
30 Zhang Weiwei, The China Wave: Rise of a Civilizational State (World Century Press, 2012).
31 China’s ban on Korean cosmetics imports and halt of Chinese tourism to Korea’s popular Jeju Island also pressured the Moon government.
4. Asia-nomics
1 Stuart T. Gulliver, “Seizing the Asian Opportunity,” Speech at the Asian Business Insights Conference, Duesseldorf, Germany, February 7, 2017.
2 World Trade Organization, World Trade Statistical Review, 2016, 2016, https://www.wto.org/english/res_e/statis_e/wts2016_e/wts2016_e.pdf.
3 It is worth noting, however, that trade within each Asian subregion has not necessarily grown due to internal frictions or insufficient comparative advantage. India’s trade with its neighbors within the SAARC group, for example, has been flat, as has trade within the GCC.
4 Indeed, because the demand for low-cost Chinese electronics is so high worldwide, the internal trade among China, South Korea, and Taiwan accounts for only 34 percent of their trade versus 70 percent in the European Union and 50 percent in the NAFTA zone. All data are from the World Trade Organization and International Monetary Fund.
5 For the purposes of economic statistics, World Bank data sets separate Hong Kong and Taiwan from China. Taiwan has intense trade ties with China, Japan, South Korea, and ASEAN totaling nearly $300 billion per year. Hong Kong’s global exports amount to $500 billion per year.
6 Karl Lester M. Yap, “China Surpasses Japan as Asia’s Top High-Tech Exporter, ADB Says,” Bloomberg, Dec. 7, 2015, https://www.bloomberg.com/news/articles/2015-12-08/china-surpasses-japan-as-asia-s-top-high-tech-exporter-adb-says.
7 PricewaterhouseCoopers, “China’s Impact on the Semiconductor Industry: 2016 Update,” January 2017.
8 By 2015, ASEAN’s top investors were in the European Union ($70 billion) and ASEAN itself ($65 billion), followed by Japan ($60 billion), then China (combined with Hong Kong) ($55 billion) and the United States ($35 billion).
9 Trade within the larger East Asian space is largely balanced: China has only recently begun to achieve a slight surplus of $40 billion in trade with its southern neighbors. Japan and ASEAN also have a balanced trade of nearly $250 billion per year, and South Korea is not too far behind with $130 billion in trade with ASEAN.
10 OAG, “Busiest Routes,” February 2018; https://www.oag.com/hubfs/Free_Reports/Busiest%20Routes/OAG%20Busiest%20Routes%202018-A4.pdf?hsCtaTracking=5cf02a77-684e-42e5-aa7f-d56bbc799a4e%7Cd12dd304-c189-4484-9bf0-590a339253db.
11 Wee Kee Hwee, Jaya Prakash Pradhan, Maria Cecilia Salta et al., ASEAN Investment Report, 2017: Foreign Direct Investment and Economic Zones in ASEAN (Jakarta: ASEAN, 2017), http://asean.org/storage/2017/11/ASEAN-Investment-Report-2017.pdf.
12 Japan’s foreign direct investment stock in Asia (outside China) remains far larger than China’s: $260 billion versus only $58 billion.
13 Japan’s largest mafia group, the Yakuza, operates in a similar fashion, consisting of nearly two dozen groups with 53,000 members and an
estimated $7 billion in annual revenue from its role in industries such as entertainment, construction, real estate, and finance.
14 China’s debt-to-GDP ratio has climbed to 260 percent, and its capital output ratio (the amount of investment needed to generate additional income) has doubled since the mid-2000s.
15 The services sector has become the largest driver of employment as well (36 percent versus only 33 percent in industry and 30 percent in agriculture) and generates higher wages and profits than do state-owned enterprises. At the same time, private consumption now represents more than half of GDP while investment has fallen to one-third.
16 David Bain, “The Top 500 Family Businesses in the World,” in EY Family Business Yearbook 2015, Ernst & Young, 2017, 182–87, https://familybusiness.ey-vx.com/pdfs/182-187.pdf.
17 “IMF Sees Room for Rising Tax-to-GDP Ratio for Indonesia,” Indonesia-Investments, February 8, 2018, https://www.indonesia-investments.com/news/todays-headlines/imf-sees-room-for-rising-tax-to-gdp-ratio-for-indonesia/item8577?.
18 Only the most fragile Asian economies such as Georgia, Iraq, Jordan, Afghanistan, and Kyrgyzstan have standby credit arrangements with the IMF.
19 Japan remains Asia’s largest net foreign creditor with more than $3.5 trillion in overseas assets, but with China’s annual surpluses of $1 trillion and foreign exchange reserves of $3 trillion, China is expected to catch up with Japan by 2020. Together, Japan and China hold nearly $7 trillion in foreign assets across foreign currency reserves, portfolio investment, and direct investment. In terms of total FDI stock, China’s nearly $1.4 trillion ranks just ahead of Japan.
20 Gemma B. Estrada, Donghyun Park, and Arief Ramayandi, “Taper Tantrum and Emerging Equity Market Slumps,” ADB Economics Working Paper Series no. 451, Sept. 2015, https://www.adb.org/sites/default/files/publication/173760/ewp-451.pdf.
21 The Chiang Mai Initiative (CMI) and subsequent Asian Bond Markets Initiative (ABMI) facilitated local currency debt swaps among ASEAN and its main three trading partners, China, Japan, and South Korea.
22 Amy Lam, “China Drives Asia’s Record International Bond Issuances for 2017,” Nikkei Asian Review, Dec. 28, 2017, https://asia.nikkei.com/Business/Markets/Nikkei-Markets/China-Drives-Asia-s-Record-International-Bond-Issuances-For-2017-Dealogic.
23 Foreigners can now buy into interbank lending (currently a market of more than $10 trillion) and local government, central bank, financial institution, and corporate bonds, as well as certificates of deposit- and asset-backed securities in the secondary market.
24 International Monetary Fund, Regional Economic Outlook, April 2015: Stabilizing and Outperforming Other Regions, April 2015.
25 Singapore, Malaysia, and Thailand established the ASEAN Trading Link in 2012 to provide a mechanism for transfer of orders across three participating exchanges, expanding into a mutual framework for clearing and settlement in 2014. Asian regulators are also adopting central counterparty clearinghouses (CCPs) as part of the G20 capital market reforms.
26 Preqin, “Preqin Special Report: Asian Private Equity & Venture Capital,” Sept. 2017, http://docs.preqin.com/reports/Preqin-Special-Report-Asian-Private-Equity-and-Venture-Capital-September-2017.pdf.
27 Crunchbase, Global Innovation Investment Report: 2016 Year in Review, https://static.crunchbase.com/reports/annual_2016_yf42a/crunchbase_annual_2016.pdf.
28 Apple also made a $1 billion investment in DiDi in 2017.
29 Judith Balea, “Grab’s Anthony Tan on His Unforgettable Meeting with Masayoshi Son, brotherhood with Didi,” Tech in Asia, May 25, 2017; https://www.techinasia.com/grab-anthony-tan-on-his-unforgettable-meeting-with-masayoshi-son-and-brotherhood-with-didi.
30 India’s trade in and consumption of gold is mostly private, while China’s is mostly public, given that it is the world’s largest producer and consumer of gold.
31 Philip J. Landrigan. Richard Fuller, Nereus J. R. Acosta, et al., “The Lancet Commission on Pollution and Health,” The Lancet 391, no. 10119 (2017): 462–512.
32 Ye Qi and Tong Wu, “Putting China’s Coal Consumption into Context,” Brookings Institution, Nov. 30, 2015, https://www.brookings.edu/blog/up-front/2015/11/30/putting-chinas-coal-consumption-into-context/.
33 China projects 250 GW of wind power by 2020. See Daniel Cusick, “China Blows Past the U.S. in Wind Power,” Scientific American, Feb. 2, 2016, https://www.scientificamerican.com/article/china-blows-past-the-u-s-in-wind-power/.
34 Due to spiking cobalt prices, all lithium-ion battery makers are researching new ratios of nickel-manganese-cobalt (NMC) to increase the cheaper nickel share and reduce the cobalt content.
35 Yiting Sun, “China’s Massive Effort to Purify Seawater Is Drying Up,” MIT Technology Review, July 11, 2016, https://www.technologyreview.com/s/601861/chinas-massive-effort-to-purify-seawater-is-drying-up/.
36 Across the Celebes Sea, the peoples of the southern Philippine Islands and the northern Moluku Islands of Indonesia are ethnically related.
37 Xi Jinping, “Secure a Decisive Victory in Building a Moderately Prosperous Society in All Respects and Strive for the Great Succss of Socialism with Chinese Characteristics for a New Era,” speech delivered at the 19th National Congress of the Communist Party of China, Oct. 18, 2017, http://www.xinhuanet.com/english/download/Xi_Jinping’s_report_at_19th_CPC_National_Congress.pdf.
38 The Nielsen Company, “The Sustainability Imperative: New Insights on Consumer Expectations,” October 2015, http://www.nielsen.com/content/dam/nielsenglobal/co/docs/Reports/2015/global-sustainability-report.pdf.
39 Latin America and Africa have far poorer countries than even Yemen, such as Haiti and Congo, but neither region has nations as wealthy per capita as Qatar or Singapore.
40 Low-income countries are those with a per capita income between $1,000 and $4,000 (India, Pakistan, Indonesia, Vietnam, the Philippines) per year; and middle-income countries are those with a per capita income between $4,000 and $12,000 (Turkey, Iraq, Iran, China, Malaysia, Thailand); high-income countries are those with a per capita income of more than $12,000 (Singapore, Japan, South Korea).
41 “New 2025 Global Growth Projections Predict China’s Further Slowdown and the Continued Rise of India,” The Growth Lab, Center for International Development, Harvard University, June 28, 2017, https://growthlab.cid.harvard.edu/news/new-2025-global-growth-projections-predict-china%E2%80%99s-further-slowdown-and-continued.
42 Cristian Badarinza, Vimal Balasubramaniam, and Tarun Ramadorai, “The Indian Household Savings Landscape,” paper presented at India Policy Forum 2016, July 12–13, 2016, http://www.ncaer.org/events/ipf-2016/IPF-2016-Paper-Badarinza-Balasubramaniam-Ramadorai.pdf.
43 Reliance Industries CEO Mukesh Ambani is Asia’s richest man with a net worth estimated at $45 billion.
44 Alipay accounts for about 68 percent of third-party online payments, with Tencent far behind, although Tencent has 20 percent of the mobile payments market. WeChat has evolved from messaging to payments to personal finance with the launch of WeBank, an online-only bank, in 2014. Together, Alipay and WeBank account for an estimated 50 percent or more of bank deposits in China.
45 According to “EY FinTech Innovation Index, 2017,” China and India rank ahead of the United Kingdom, Germany, and the United States in providing large-scale digital consumer banking and other financial products to the masses. https://www.ey.com/Publication/vwLUAssets/ey-fintech-adoption-index-2017/$FILE/ey-fintech-adoption-index-2017.pdf.
46 Mayuko Tani, “Asia’s ‘Tiger Cubs’ Will Feast on FDI for the Next Decade,” Nikkei Asian Review, August 2, 2017.
47 Geely’s 800,000 car sales in Europe in 2016 were less than Volkswagen’s 4 million, but for Geely, Europe is far less important than its core market of China itself. It considers overseas sales a bonus, not a necessity.
48 Jost Wübbeke, Mirjam Meissner, Max J. Zenglein, et al., “Made in China 2025: The Making of a High-Tech Superpower and Consequences for Industrial Countries,” Mercator Institute for China
Studies, December 2016, https://www.merics.org/sites/default/files/2017-09/MPOC_No.2_MadeinChina2025.pdf.
49 Commission on the Theft of American Intellectual Property, “Update to the IP Commission Report: The Theft of American Intellectual Property: Reassessments of the Challenge and United States Policy,” National Bureau of Asian Research, 2017, p. 4, http://ipcommission.org/report/IP_Commission_Report_Update_2017.pdf.
50 Kyle A. Jaros, “Urban Champions or Rich Peripheries? China’s Spatial Development Dilemmas,” Harvard Kennedy School Ash Center for Democratic Governance and Innovation, April 2016, http://ash.harvard.edu/files/ash/files/261226_ash_jaros_web.pdf?m=1461696669.
51 The largest share of GDP represented by the informal economy is found in countries such as Russia, Thailand, the Philippines, Pakistan, and Bangladesh.
52 Emma Lee, “Nearly 90% Phones Sold in China in 2016 Came from Domestic Makers,” TechNode, Jan. 12, 2017, https://technode.com/2017/01/12/nearly-90-of-560m-phones-sold-in-china-comes-from-domestic-makers-2016/.
53 Chris Cooper, “China to Surpass U.S. as World’s Largest Aviation Market by 2024,” Bloomberg, Oct. 20, 2016, https://www.bloomberg.com/news/articles/2016-10-21/china-to-surpass-u-s-as-world-s-largest-aviation-market-by-2024.
5. Asians in the Americas and Americans in Asia
1 Pew Research Center, Modern Immigration Wave Brings 59 Million to U.S., Driving Population Growth and Change Through 2065, September 28, 2015, http://www.pewhispanic.org/files/2015/09/2015-09-28_modern-immigration-wave_REPORT.pdf.
2 United States Census Bureau, “Asian Alone or in Any Combination by Selected Groups: 2015 American Community Survey 1-Year Estimates,” https://www.census.gov/history/pdf/acs15yr-korean62017.pdf.
3 United States Census Bureau, “Annual Estimates of the Resident Population by Sex, Race Alone or in Combination, and Hispanic Origin for the United States, States, and Counties: April 1, 2010 to July 1, 2016,” https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmk.
4 Department of Homeland Security, “Persons Obtaining Lawful Permanent Resident Status by Region and Country of Birth: Fiscal Years 2013 to 2015,” table 3 in Yearbook of Immigration Statistics 2015, https://www.dhs.gov/immigration-statistics/yearbook/2015/table3.