What Is the Asian Century?
The Asian Century refers to the dominant role that Asia is expected to play in the 21st century due to its burgeoning economy and demographic trends. The concept of the Asian Century gained credence following the rapid economic growth of China and India since the 1980s, which propelled both of them to the ranks of the world's largest economies.
- The Asian Century refers to the dominant role that Asia is expected to play in the 21st century due to its burgeoning economy and demographic trends.
- Asian economies are on track to become larger than the rest of the world combined in 2020, in purchasing power parity (PPP) terms.
- Growth is being powered by China and India, now two of the biggest global economies, as well as smaller nations, such as Indonesia, Vietnam, the Philippines, and Bangladesh.
- By 2030, Standard Chartered expects the world’s 10 biggest economies to largely be made up of current emerging markets.
Understanding the Asian Century
Asia was a major driving force of the world's economy for most of human history. Then in the 19th century, western economies, powered by the Industrial Revolution, took over.
In the 1950s, Asia, home to more than half of the world’s population, contributed less than 20 percent of global output.
Over the past few decades, talk of Asia stealing back its crown as the engine of global economic growth has gained momentum. Many believe that the 19th century belonged to the United Kingdom, and the 20th century to the United States. Now economists are speculating that the 21st century is destined to become the “Asian Century.”
Asia, home to over half the world’s population, is soon set to house half of the globe’s middle class. Before, companies mainly used the continent as a hub to build things cheaply and then resell them elsewhere. Now corporations are doing their utmost to boost revenues in the region—as incomes and living standards rise, so too does demand for durable goods, such as luxury goods and automobiles.
When people discuss the Asian Century, China and India come up a lot in conversation. In PPP terms, China is now a bigger economy than the U.S., accounting for 19 percent of global output in 2019. The People’s Republic is widely expected to overthrow the U.S. in gross domestic product (GDP) terms, too, over the course of the next decade.
India, which currently sits in fifth place in the GDP rankings, is also breathing down the U.S.’s neck. British bank Standard Chartered believes India and China will both leapfrog U.S. GDP by 2030 and forecasts that the world’s 10 biggest economies by then will mainly be made of current emerging markets.
Often, pundits forget to mention that there is more to the Asian economy than just China and India. Other countries that have expanded rapidly include Indonesia, which is predicted to become the world’s sixth-largest economy in PPP terms by 2023, Vietnam, the Philippines, and Bangladesh.
Criticisms of the Asian Century
Not everyone agrees that the 21st century should be described as belonging to Asia. Critics mention the frailties of many of its economies, including Pakistan and North Korea, together with the tensions and apparent lack of cooperation between nations.
Then there’s the slowing economic growth of China and India. Skeptics point to recent hiccups as another reason why neither should be defined as a model for developing countries to follow.