Embracing the Asian Century

After the global financial crisis in 2008, Asia grew at more than 6 per cent each year, outperforming a troubled world. Not just East Asia moreover, but also South Asia, South-east Asia, Africa and Latin America. While the United States and Europe floundered, the gravity defying feat substantiated the idea of Asia’s rise to close the gap with developed economies. Now, gravity seems to be catching up with Asians, Africans, and Latin Americans.

In the Asian Century, the triumphal regions of Asia, Africa and Latin America are expected to thrive economically but will face the immense challenges of poverty, burgeoning populations, vast slums, housing demolitions and natural disasters. The rise of Asian economies over the last 50 years – which started with Japan in the 1950s and then spread to Korea, Taiwan and Singapore, and later to the rest of Southeast Asia, with China and India taking the lead since the 1980s – has been mainly a story of production. With the notable exception of India, Asia’s rising prosperity has been largely driven by an export-oriented economic model. Asia has been the world’s biggest factory, a gigantic, increasingly integrated production machine churning out everything from toys, garments and shoes to electronics, engineering goods and automobiles.

For the last half century the West and, above all, the United States, has voraciously consumed what Asia has produced. In the process, Asian countries have almost uninterruptedly run trade and current account surpluses. America, by contrast, has run deficits that have ballooned in recent years. Between 2003 and 2008, for instance the US current account deficit averaged US$700 billion, equal to around five percent of GDP. Almost half of the US deficit was with the countries of East Asia. In short, America has been the main consumption engine and Asia the main production engine for the global economy.

New generation of economic dynamos, provides strategic creation of new cities of 120 new cities in China (100), India (13), and Latin America (8).

But this dynamic is now changing. Asia’s growing prosperity, especially since the 1980s, when the Chinese economy started to take off, has been a major impetus for this change. Asia’s pro-export policies – essentially low wages and cheap currencies – are becoming increasingly obsolete and unsuitable. This has become increasingly evident after the global financial crisis of 2008/09.

Make Way for the Asian Century

The rapid growth of past decades is written into the present landscape. Socio-economic growth has transformed cities, raised income levels, spurred urbanisation and technology: changing the way we live. And just as the transformation of the region has generated a tremendous amount of wealth for Asians, Africans, and Latin Americans over the past decade, the developments of the coming decade are likely to generate new opportunities. More wealth will likely be generated as a result of demographic changes, urban and infrastructure growth, the continued rise of the middle class, and the expansion of Asian consumerism in the foreseeable future.

Asia has also been demolishing stereotypes over the past decade. It has gone from being just the “factory of the world” to the “millionaire factory of the world,” with more wealth and high net worth individuals being created here than in any other region. The shift in economic gravity from the West to East is the biggest structural shift underway in the global economy today. Over the coming years, Asia will play an even more influential role in the global economy, as its economic engine switches gear from production to consumption.

The Global Challenge

In the 21st century, places worldwide will become the focal points of economic development, geopolitical competition and collaboration while balancing needs for long-term sustainability. With increasing population demands, places will also become the centres of human habitat and cultural development. However the challenges of developing and managing sense of place will grow increasingly complex. Integrated place-based solutions will be needed to create optimum economic, environmental and social outcomes

Sense of place enactment including but not limited to the location of industries, economies of local agglomeration (also known as linkages), transportation, international trade, economic development, real estate, gentrification, ethnic economies, gendered economies, core-periphery theory, the economics of urban form, the relationship between the environment and the economy (tying into a long history of geographers studying culture-environment interaction), and globalisation.

The emergence of key trends of the 21st century: globalisation, individualism, merging, acceleration, hi-tech, hi-touch, demographics, urbanisation and migration. The urban population explosion which is forecast positions cities as the engines for developing the society of the future and means we are at a defining point in how our future sense of place unfolds.

Asia is in the midst of changing its growth model. The previous almost single-minded focus on investment and production for exports is shifting towards domestic consumption and infrastructure development.