Asia’s global impact

Abstract

Suddenly Asia has emerged as a major player in the global economy. Asia already accounts for 27 per cent of world GDP and the Asian Development Bank 2050 Report issued last May suggests that it will account for as much as 51 per cent a generation hence. The economies of the developed world are slipping back into recession. Asia, especially China, India and Indonesia, continue their exceptional and rapid growth with the rest of the region, including Australia in tow. There are high levels of interdependence in the region itself, especially within East Asia and between it and the rest of the world. It has a deep stake in the strength of the global economic system that supports open trade and international capital flows. What sort of changes will these developments wreak in the regional and global order? Yiping Huang argues that what China wants is reform, not radical change, of the international economic system, because China has been among the biggest beneficiaries of the existing order. There are great expectations of Asia, not only as an engine of global growth but also of its leadership at a time of global economic fragility. The new global order, centred on the G20, includes six Asian powers and provides a platform for Asian leadership. But is Asia up to the task? And do the institutional structures and arrangements within Asia provide the foundations that are needed to build coherent policy strategies to deal with the economic problems the world now faces? The essays in this volume address these questions. It is not yet clear how trans-Pacific regional institutions should relate to East Asian regional institutions or how regional institutions should relate to the G20 process. An increasingly prominent interest is how regional institutions can accommodate dialogues on political and security concerns as well as economic matters as changes in the structure of regional economic power lead inexorably to shifts in regional political power. The expansion of the East Asia Summit to include the US and Russia begins to address this interest, but it is only a first step. This is Asia’s global moment. Will it meet the test? The verdict is out and far from certain. But this issue of EAFQ provides the outline of the agenda with which Asia will have to deal if it is measure up, both economically and politically.