| Statistics | |
|---|---|
| Population | 4.5 billion (60% of the world) |
| GDP | $28.23 trillion (Nominal; 2017) $56.62 trillion (PPP; 2017) |
GDP growth
| 5.7% (2017) |
GDP per capita
| $6,690 (2017; 5th) |
| 5.12 million (2016) | |
| Unemployment | 3.8% (2010 est.) |
| Most numbers are from the International Monetary Fund. All values, unless otherwise stated, are in US dollars. | |
The economy of Asia comprises more than 4.5 billion people (60% of the world population) living in 49 different nation states. Six further states lie partly in Asia,
but are considered to belong to another region economically and
politically. Asia is the fastest growing economic region, as well as the
largest continental economy by both GDP Nominal and PPP in the world. China, Japan, India, South Korea and Indonesia
are currently the top five economies in Asia. Moreover, Asia is the
site of some of the world's longest modern economic booms, starting from
the Japanese economic miracle (1950–1990), Miracle on the Han River (1961–1996) in South Korea, economic boom (1978–2013) in China and economic boom in India (1991–present).
As in all world regions, the wealth of Asia differs widely
between, and within, states. This is due to its vast size, meaning a
huge range of different cultures, environments, historical ties and
government systems. The largest economies in Asia in terms of PPP gross domestic product (GDP) are China, India, Japan, South Korea, Indonesia, Turkey, Iran, Saudi Arabia, Taiwan, Thailand, Pakistan, Philippines, Malaysia and Bangladesh and in terms of nominal gross domestic product (GDP) are China, Japan, India, South Korea, Indonesia, Philippines, Turkey, Thailand, Taiwan, United Arab Emirates , Iran, Malaysia, Singapore, and Bangladesh.
Wealth (if measured by GDP per capita) is mostly concentrated in the East Asia in Japan, South Korea, Taiwan, Hong Kong, Macau, Singapore, and Brunei, as well as in oil rich countries in West Asia such as Saudi Arabia, Qatar, United Arab Emirates, Bahrain, Kuwait, and Oman. Israel and, to a lesser extent Turkey
are exceptions: both lie in the territory of Asia despite not often
being counted as such. Israel (entrepreneurship on diversified
industries) is a developed country, while Turkey (founding member of OECD)
is an advanced emerging country. Asia, with the exception of Japan
(heavy industry and electrical sophistication), South Korea (heavy
industry and information and communication technology), Taiwan (light
industry and hi-tech parts manufacturing), Hong Kong (financial industry
and services) and Singapore (high-tech manufacturing, biotechnology,
financial and business services, and tourism governed by Casino Regulatory Authority of Singapore) in recent years, is currently undergoing rapid growth and industrialization, and China (manufacturing and FDI-led growth) and India (commodities, outsourcing destination and computer software), the two fastest growing major economies in the world.
East Asian and Southeast Asian countries generally rely on manufacturing and trade (and then gradually upgrade to industry and commerce), and incrementally building on high-tech industry and financial industry for growth, countries in the Middle East depend more on engineering to overcome climate difficulties for economic growth and the production of commodities, principally Sweet crude oil. Over the years, with rapid economic growth and large trade surplus with the rest of the world, Asia has accumulated over US$4 trillion of foreign exchange reserves – more than half of the world's total, and adding tertiary and quaternary sectors to expand in the share of Asia's economy.
Economic development
Ancient and medieval times
China and India
alternated in being the largest economies in the world from 1 to 1800
AD. China was a major economic power and attracted many to the east, and for many the legendary wealth and prosperity of the ancient culture of India personified Asia,
attracting European commerce, exploration and colonialism. The
accidental discovery of America by Columbus in search for India
demonstrates this deep fascination. The Silk Road became the main East-West trading route in the Asian hitherland while the Straits of Malacca stood as a major sea route.
Pre–1945
Prior to World War II, most of Asia was under colonial rule.
Only relatively few states managed to remain independent in the face of
constant pressure exerted by European power. Such examples are China, Siam and Japan.
Japan in particular managed to develop its economy due to a
reformation in the 19th century. The reformation was comprehensive and
is today known as the Meiji Restoration.
The Japanese economy continued to grow well into the 20th century and
its economic growth created various shortages of resources essential to
economic growth. As a result, the Japanese expansion began with a great part of Korea and China annexed, thus allowing the Japanese to secure strategic resources.
At the same time, Southeast Asia was prospering due to trade and
the introduction of various new technologies of that time. The volume of
trade continued to increase with the opening of the Suez Canal in the 1860s. Manila had its Manila galleon wherein products from the Philippine islands and China were traded with Spanish America and Europe from 1571 to 1815. The Spanish colony of the Philippines was the first Asian territory to trade with the Americas, from Manila to Acapulco. The route continued overland across present-day Mexico to Veracruz on the Atlantic coast, then to Havana and Seville,
forming the first global trade route. Silk, porcelain, ivory, tobacco,
coconut and corn were some of the goods exported from Asia to the
Americas and Europe, through the Philippines.
Singapore,
founded in 1819, rose to prominence as trade between the east and the
west increased at an incredible rate. The British colony of Malaya, now part of Malaysia, was the world's largest producer of tin and rubber. The Dutch East Indies, now Indonesia, on the other hand, was known for its spices
production. Both the British and the Dutch created their own trading
companies to manage their trade flow in Asia. The British created the British East India Company while the Dutch formed Dutch East India Company. Both companies maintained trade monopolies of their respective colonies.
In 1908, crude oil was first discovered in Persia,
modern day Iran. Afterwards, many oil fields were discovered and it was
learnt later that the Middle East possesses the world's largest oil
stocks. This made the rulers of the Arab nations very rich though the
socioeconomic development in that region lagged behind.
In the early 1930s, the world underwent a global economic depression, today known as the Great Depression.
Asia was not spared, and suffered the same pain as Europe and the
United States. The volume of trade decreased dramatically all around
Asia and indeed the world. With falling demand, prices of various goods
starting to fall and further impoverished locals and foreigners alike.
In 1931 Japan invaded Manchuria and subsequently the rest of China and south-east Asia in what eventually became the Asia-pacific leg of World War II.
1945–1990
Following
World War II, the People's Republic of China and India, which account
for half of the population of Asia, adopted socialist policies to
promote their domestic economy. These policies limited the economic
growth of the region. They are being abandoned in India and reformed in
China. In contrast, the economies of Japan and the Four Asian Tigers (South Korea, Taiwan, Singapore and Hong Kong) were economic successes, and the only successful economies outside of the Western World.
The success of these four economies led other Southeast Asian
countries, namely Indonesia, Malaysia, Philippines, and Thailand to
follow suit in opening up their economies and setting up export-oriented
manufacturing bases that boosted their growth throughout the 1980s and
the 1990s.
One of the most pronounced Asian economic phenomenons during this time, the Japanese post-war economic miracle,
greatly impacted the rest of the world. After World War II, under
central guidance from the Japanese government, the entire economy was
undergoing a remarkable restructuring. Close cooperation between the
government, corporations and banks facilitated easy access to
much-needed capital, and large conglomerates known as keiretsu spurred horizontal and vertical integration
across all industries, keeping out foreign competition. These policies,
in addition to an abandonment of military spending, worked phenomenally
well. Japanese corporations as a result exported and still export
massive amounts of high quality products from "the Land of the Rising
Sun".
Another amazing economic success story is that of South Korea's, also referred to as the Miracle on the Han River. The country was left impoverished after the Korean War, and until the early 1970s was among the world's poorest countries (even poorer than North Korea). However, it was since able to recover with double digit annual growth rates. Many conglomerates, also known as chaebols, such as Samsung, LG Corp, Hyundai, Kia, SK Group, and more grew tremendously during this period. South Korea has now become the most wired country in the world.
Taiwan and Hong Kong experienced rapid growth up till the 1990s.
Taiwan became, and still remains one of the main centers of consumer
electronics R&D as well as manufacturing. However, unlike in Japan
and South Korea, the bulk of Taiwan's economy is dependent on small to
medium-sized businesses. Hong Kong, on the other hand, experienced rapid
growth in the financial sector due to liberal market policies, with
many financial institutions setting up their Asian headquarters in Hong
Kong. Till today, Hong Kong has been ranked as the world's freest economy for many years running, and it remains among one of the world's top 5 leading financial centers.
In Southeast Asia, economic development was fueled by the growth of the bamboo network. The bamboo network refers to a network of overseas Chinese businesses operating in the markets of Southeast Asia that share common family and cultural ties. The network expanded as Chinese refugees emigrated to Southeast Asia following the Chinese Communist Revolution in 1949. Singapore
in particular experienced very rapid economic growth after declaring
independence in 1965, following a two-year federation with Malaysia.
In addition to creating a conducive economic and political climate, the
government developed the skills of its multi-racial workforce, and
established export-oriented industries by encouraging foreign investors
to set up regional operations in manufacturing. The government also
played a prominent role in Singapore's growth as a major financial and business services centre. Singapore is today one of the richest countries in the world, both in terms of GNI per capita, and GDP (PPP) per capita.
This period was also marked by military conflict. Wars driven by the Cold War, notably in Vietnam and Afghanistan, wrecked the economies of these respective nations. When the Soviet Union collapsed in 1990–91, many Central Asian
states were cut free and were forced to adapt to pressure for
democratic and economic change. Also, several of the USSR's allies lost
valuable aid and funding.
1991–2007
The Chinese economy boomed under the economic measures undertaken by Deng Xiaoping, in the late 1970s, and continuing under Jiang Zemin and Hu Jintao in the 1990s and 2000s. After the liberalization of the economy of India,
growth in India and China increasingly shifted the center of gravity of
the global economy towards Asia. By the late 2000s, China's economic
growth rate exceeded 11% while India's growth rate increased to around
9%. One of the factors was the sheer size of the population in this
region.
Meanwhile, South Korea, Taiwan, Hong Kong and Singapore emerged as the Four Asian Tigers
with their GDPs growing well above 7% per year in the 1980s and the
1990s. Their economies were mainly driven by growing exports. The Philippines only began to open up its stagnated economy in the early 1990s. Vietnam's economy began to grow in 1995, shortly after the United States and Vietnam restored economic and political ties.
Throughout the 1990s, the manufacturing ability and cheap labor
markets in Asian developing nations allowed companies to establish
themselves in many of the industries previously dominated by companies
from developed nations. By the dawn of the 21st century, Asia became the
world's largest continental source of automobiles, machinery, audio equipment and other electronics.
At the end of 1997, Thailand was hit by currency speculators, and the value of the Baht along with its annual growth rate fell dramatically. Soon after, the crisis
spread to the ASEAN region, South Korea and other countries in Asia,
resulting in great economic damage on the affected countries (but with
Japan and China both largely escaping the crisis). In fact, some of the
economies, most notably those of Thailand, Indonesia, and South Korea
actually contracted. By 1999, most countries had already recovered from
the crisis. In 2001, almost all economies in both Europe and Asia were adversely affected by the September 11 attacks,
with Indonesia and Japan was hardest. Both continents quickly recovered
from the attacks in United States after more than a year.
In 2004, parts of Sumatra and South Asia were severely damaged by an earthquake and the subsequent tsunami.
The tsunami wreaked havoc, causing massive damage in the infrastructure
of the hit areas, particularly Indonesia, and displaced millions. For a
short time, GDP contracted among nations such as Indonesia and Sri Lanka, despite massive inflow of foreign aid in the aftermath of the disaster.
Japan suffered its worst post-World War II economic stagnation set in the early 1990s (which coincided with the end of Cold War), which was triggered by the latter event of Asian financial crisis
in 1997. It, however, rebounded strongly in the early 2000s due to
strong growth in exports, although unable to counteract China in 2005
after China gradually surpassed it as the largest economy in Asia.
2008–present
In 2008, the Global Financial Crisis, triggered by the housing bubble in the United States, caused a significant decline in the GDP of the majority of the European economies. In contrast, most Asian economies experienced a temporary slowdown in their rates of economic growth, particularly Japan, Taiwan,South Korea, and China, resuming their normal growth soon after.
The Arab Spring since 2011 had caused economic malaise in Syria, Lebanon and Yemen, amongst the most adversely affected nations in the Middle East. At the same time, in the early 2010s, Iraq, Saudi Arabia, the United Arab Emirates and Kuwait
registered high GDP growths in the years that followed due to increased
oil prices and further diversification of exports, as well as rising Foreign exchange reserves.
In 2013, in a once-in-a-decade party leadership reshuffle in China (change of Hu-Wen Administration to Xi-Li Administration),
the Chinese economy experienced a significant slowdown in the GDP
growth, slowing down from the unprecedented decades of 9–10% annual
growth to around 7–8%, which has significant effect in some developing
economies, particularly in Southeast Asia and India.
The Philippines,
however, managed to grow at rates at par with China in the period
2012–2013, and became Asia's fastest-growing economy beginning 2014. It
also recovered after getting hit by Typhoon Haiyan, the strongest storm on record to make landfall, in November 2013, which killed at least 5,200 and displacing millions more.
On September 29, 2013, China opened the Shanghai Free-Trade Zone.
This free trade zone allows international trade to be conducted with
fewer restrictions and lower customs duties. The zone is tax free for
the first ten years to encourage foreign direct investment (FDI) with a
'negative list' used to regulate in which fields foreign investments are
prohibited.
Future
Asia's large economic disparities are a source of major continuing tension in the region. While global economic powers China, Japan, India, continue powering through, and Indonesia, Malaysia, Philippines, Thailand, Vietnam, Bangladesh and Sri Lanka have entered the path to long-term growth, regions right next to these countries are in severe need of assistance.
Given the enormous quantity of cheap labor in the region,
particularly in China and India, where large workforces provide an
economic advantage over other countries, the rising standard of living
will eventually lead to a slow-down. Asia is also riddled with political
problems that threaten not just the economies, but the general
stability of the region and world. The nuclear neighbors—Pakistan and
India—constantly pose a threat to each other, causing their governments
to invest heavily in military spending.
Yet another potential global danger posed by the economy of Asia is the growing accumulation of foreign exchange reserves.
The countries/regions with the largest foreign reserves are mostly in
Asia – China (Mainland – $2,454 billion & Hong Kong – $245 billion,
June 2010), Japan ($1,019 billion, June 2009), Russia ($456 billion,
April 2010), India ($400 billion, October 2017), Taiwan ($372 billion,
September 2010), South Korea ($286 billion, July 2010), and Singapore
($206 billion, July 2010). This increasingly means that the
interchangeability of the Euro, USD, and GBP are heavily influenced by
Asian central banks. Some economists in the western countries see this
as a bad thing, prompting their respective governments to take action.
According to the World Bank,
China surpassed the United States and the European Union to become the
world's largest economy by early 2015, followed by India. Both countries
are expected to rank in the same positions between 2020 and 2040. Moreover, based on Hurun Report, for the first time in 2012 Asia surpassed North America in amount of billionaires.
More than 40 percent or 608 billionaires came from Asia, where as North
America had 440 billionaires and Europe with 324 billionaires.
Regional variation
Recent reforms in China
Hong Kong Exchange Trade Lobby 2005
Following a Third Plenum of the Central Committee of the Communist Party of China in 2013 China revealed plans for several sweeping social and economic reforms. The government would relax its one-child policy
to allow single-child parents to have two kids. This reform was
implemented as a response to the aging population of China and provide
more labor. The government also reformed the hukou system, allowing the labor force to become more mobile.
The reforms will make financial loan systems more flexible
encouraging increased economic involvement of private firms.
Additionally, state-owned enterprises will be required to pay higher
dividends to the government. The benefits of this will go to Social
Security. Reform also allows farmers to own land for the first time
ideally encouraging farmers to sell their land and move to cities which
will boost consumerism and increase urban work force.
On April 10, 2014, China Securities Regulatory Commission (CSRC)
and Securities and Futures Commission (CSRC) made a Joint Announcement
about the approval for the establishment of mutual stock market access
between Mainland China and Hong Kong.
Under the ‘Connect Program’, the Stock Exchange of Hong Kong Limited
and Shanghai Stock Exchange will establish mutual order-routing
connectivity and related technical infrastructure to enable investors to
invest in Chinese equities market directly. On November 17, 2014, the
program officially launched with the approvals from Beijing.
The 'Connect Program' is a groundbreaking initiative with
significance to both Hong Kong and Mainland. It brings another
opportunity for the growth of the Hong Kong securities market. More
importantly, it provides, for the first time, a feasible, controllable
and expandable channel to investors to invest in both Hong Kong and
Mainland, in addition to current schemes including QDII, QFII, AND RDFII
programs.
The Shanghai-Hong Kong Connect Program is open to all market
participants, but those must satisfy all requirements prescribed by the
exchange and regulators. The design of the program will ensure a minimal
change of regulatory structure in each market as well as the ability to
expand to other markets or other asset classes in the future.
Local government's spending plays a critical role in China's
fiscal system. Following the 1991 intergovernmental fiscal reform, the
central government's share of total fiscal revenue increase from less
than 30 percent to around 50 percent in 2012.
Local governments are now responsible for infrastructure investment,
service delivery and social spending, which together account for about
85 percent of the total expenditure. Without a rule to guide the
distribution of intergovernmental expenditure responsibilities,
significant levels of risk would be associated with the spending.
China's central administration will impose hard caps on local
government borrowing in order to control financial risks from an
explosive level. Statistics showed that total debt had reached $3
trillion by the middle of 2013, raising total government debt to 58
percent of GDP. Similar jump occurred in corporate debt as well, which
pushed China's overall debt-GDP ratio up to 261% from 148% in 2008. IMF
warned that rapid debt run-ups could lead to financial crisis.
The new rules are expected to be combined with broader fiscal
reforms aimed at bringing local government tax revenue in line with
expenditure. The central government will provide more guidance to local
governments in terms of how to manage and invest wisely.
As of 2017, China boasts the world's second largest economy by
nominal GDP at a staggering $11.8 trillion. It has the largest
manufacturing economy in the world, and is the largest exporter of
goods. China is also the world's largest producer and consumer of
agricultural products. Unsurprisingly, China produces the most rice in
the world, and is a key producer of wheat, corn, tobacco, soybeans, and
potatoes, among others. The real estate industry in China has been a
controversial subject, but, since 2010, China has had the largest real
estate market in the world. Despite China's focus on manufacturing, in
the last two decades, China's service sector has doubled in size,
accounting for 46% of China's total GDP. In 2011, the Chinese government
instituted a five-year plan to prioritize the development of the
service economy. The telecommunications sub-sector in China is the
largest in the world, with over a billion mobile customers. Tencent, the
developer of WeChat, is dominating Chinese mobile culture unlike
anything in history has.
In 2015, China contributed a third of global GDP growth. China's
influence in the global economy is a force to be reckoned with, and, as
more and more Chinese citizens are becoming bigger consumers, it would
be no surprise if this continues for the foreseeable future.
Economic liberalisation in India
The economic liberalisation in India
refers to the ongoing economic liberalisation, initiated in 1991, of
the country's economic policies, with the goal of making the economy
more market-oriented and expanding the role of private and foreign
investment. Specific changes include a reduction in import tariffs,
deregulation of markets, reduction of taxes, and greater foreign
investment. Liberalisation has been credited by its proponents for the
high economic growth recorded by the country in the 1990s and 2000s. The
overall direction of liberalisation has since remained the same,
irrespective of the ruling party, although no party has yet solved a
variety of politically difficult issues, such as liberalising labour
laws and reducing agricultural subsidies. There exists a lively debate in India as to what made the economic reforms sustainable.
The Economy of India is the sixth-largest in the world by nominal GDP and the third-largest by purchasing power parity (PPP). The country is classified as a newly industrialized country, one of the G-20 major economies, a member of BRICS and a developing economy with an average growth rate of approximately 7% over the last two decades. Maharashtra is the richest Indian state and has an annual GDP of US$320 billion, nearly equal to that of Pakistan or Portugal, and accounts for 12% of the Indian GDP followed by the states of Tamil Nadu and Uttar Pradesh. India's economy became the world's fastest growing major economy from the last quarter of 2014, replacing the People's Republic of China.
The long-term growth prospective of the Indian economy
is highly positive due to its young population, corresponding low
dependency ratio, healthy savings and investment rates, and increasing
integration into the global economy. The Indian economy has the potential to become the world's 3rd-largest economy by the next decade, and one of the largest economies by mid-century. And the outlook for short-term growth is also good as according to the IMF, the Indian economy is the "bright spot" in the global landscape. India also topped the World Bank’s
growth outlook for 2015–16 for the first time with the economy having
grown 7.3% in 2014–15 and expected to grow 7.5–8.3% in 2015-16.
India has the one of fastest growing service sectors in the world with annual growth rate of above 9% since 2001, which contributed to 57% of GDP in 2012–13. India has capitalized its economy based on its large educated English-speaking population to become a major exporter of IT services, BPO services, and software services with $174.7 billion worth of service exports in 2017–18. It is also the fastest-growing part of the economy. The IT industry continues to be the largest private sector employer in India. India is also the fourth largest start-up hub in the world with over 3,100 technology start-ups in 2014–15 The agricultural sector is the largest employer in India's economy but contributes to a declining share of its GDP (17% in 2013–14). India ranks second worldwide in farm output. The Industry sector has held a constant share of its economic contribution (26% of GDP in 2013–14).
The Indian auto mobile industry is one of the largest in the world with
an annual production of 21.48 million vehicles (mostly two and three
wheelers) in FY 2013–14. India has $600 billion worth of retail market in 2015 and one of world's fastest growing E-Commerce markets.
India's two major stock exchanges, Bombay Stock Exchange and National Stock Exchange of India, had a market capitalization of US$1.71 trillion and US$1.68 trillion respectively as of Feb 2015, which ranks 11th & 12 largest in the world respectively according to the World Federation of Exchanges.
India also home to world's third largest Billionaires pool with 97
billionaires in 2014 and fourth largest number of ultra-high-net-worth
households that have more than 100 million dollars.
India is a member of the Commonwealth of Nations, the South Asian Association for Regional Cooperation, the G20, the International Monetary Fund, the World Bank, the World Trade Organization, the Asian Infrastructure Investment Bank, the United Nations and the New Development BRICS Bank.
Successive Indian governments have been advised to continue
liberalisation. Even though, in early years India grew at slower pace
than China (however, since 2013 India has been growing faster than its
northern counterpart in terms of percentage of GDP growth, although it
should be noted that China's absolute growth still exceeds India by a
large margin). The McKinsey Quarterly states that removing main
obstacles "would free India's economy to grow at 10% a year".
There has been significant debate, however, around liberalisation
as an inclusive economic growth strategy. Since 1992, income inequality
has deepened in India with consumption among the poorest staying stable
while the wealthiest generate consumption growth. As India's gross
domestic product (GDP) growth rate became lowest in 2012–13 over a
decade, growing merely at 5.1%, more criticism of India's economic
reforms surfaced, as it apparently failed to address employment growth,
nutritional values in terms of food intake in calories, and also exports
growth – and thereby leading to a worsening level of current account
deficit compared to the prior to the reform period. But then in FY
2013–14 the growth rebounded to 6.9% and then in 2014–15 it rose to 7.3%
as a result of the reforms put by the New Government which led to the
economy becoming healthy again and the current account deficit coming in
control. Growth reached 7.5% in the Jan–Mar quarter of 2015 before
slowing to 7.0% in Apr–Jun quarter.
By 2050, India's economy is expected to overtake the US economy,
putting it behind China in the world's largest economies. Like China,
agriculture makes up a large part of the Indian economy. As the Indian
economy has grown, agriculture's contribution to GDP has steadily
declined, but it still makes up a large portion of the workforce and
socio-economic development. India's industrial manufacturing GDP output
was the 6th largest in the world in 2015, largely due to petroleum
products and chemicals. India's pharmaceutical industry has also grown
at a compound annual growth rate of 17.5% over the last 11 years, and is
one of India's fastest-growing sub-sectors today. However, the
engineering industry in India is still the largest sub-sector by GDP.
Perhaps the most exciting development in India is its incredibly
fast-growing information technology and business process outsourcing
sub-sector. Cities like Bangalore, Hyderabad
rival the United States's Silicon Valley in innovation and
technological advancement as more and more skilled, tech-savvy students
and young professionals are entering the entrepreneurial world.
Abenomics in Japan
Abenomics is a policy named after, and implemented by the Japanese Prime Minister Shinzō Abe. Following the global economic recession,
the Prime Minister hoped to boost Japanese economy with "three arrows":
massive fiscal stimulus, more aggressive monetary easing and structural
reforms to make Japan more competitive.
The stimulus package was 20.2 trillion yen ($210 billion) and the
government also aimed to create 600,000 jobs in two years. In addition,
this stimulus package aimed to ensure public safety with reconstruction
efforts, creating a base for future business growth, and revitalizing
regions by promoting tourism, revitalizing public transport, and
improving infrastructure.
The Bank of Japan also aimed to raise inflation
to 2% in part by buying up short-term government debts. Critics point
out that hyperinflation and an unbalanced GDP/debt ration could be
negative results of Abenomics. Furthermore, currency changes could
aggravate international relations, especially those between China and
Japan.
Trade blocs
Association of Southeast Asian Nations
The Association of Southeast Asian Nations
(ASEAN) is a political, economic, security, military, educational and
socio-cultural organization of countries located in Southeast Asia.
Founded in 1967, its aim is to foster cooperation and mutual assistance
among members. The countries meet annually every November in summits.
The organisation serves as a central platform for cooperation and unity
in Asia, its affiliates created several trade blocs in the region,
including Regional Comprehensive Economic Partnership, the world's largest trade bloc.
The current member countries of ASEAN are Myanmar (Burma), Laos, Thailand, Cambodia, Vietnam, Philippines, Malaysia, Brunei Darussalam, Singapore and Indonesia. East Timor and Papua New Guinea are given observer status.
In 2005, ASEAN was instrumental in establishing the East Asia Summit (involving all ASEAN members plus China, Japan, South Korea, India, Australia and New Zealand)
which some have proposed may become in the future a trade bloc, the
arrangements for which are far from certain and not yet clear.
The Asian Currency Unit
(ACU) is a proposed currency unit for the ASEAN "10+3" economic circle.
(ASEAN, the mainland of the People's Republic of China, India, Japan,
and South Korea).
Shanghai Cooperation Organisation
The Shanghai Cooperation Organisation (SCO) is a Eurasian political, economic, and security organisation, the creation of which was announced on 15 June 2001 in Shanghai, China, its members include China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan, India and Pakistan;
the Shanghai Cooperation Organisation Charter, formally establishing
the organisation, was signed in June 2002 and entered into force on 19
September 2003. Known as the "alliance of Asia", it is the world's forefront regional organisation in economic power and political influence, one of the world's strongest military alliances, and the largest regional organisation in the world in terms of geographical coverage and population, covering three-fifths of the Eurasian continent and nearly half of the human population. At present, the SCO is one of the world's most powerful and influential organisations.
Regional Comprehensive Economic Partnership
The Regional Comprehensive Economic Partnership is a proposed free trade agreement (FTA) between the ten member states of the Association of Southeast Asian Nations (ASEAN) (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam) and the six states with which ASEAN has existing free trade agreements (Australia, China, India, Japan, South Korea and New Zealand). It is the world's largest trading bloc, covering nearly half of the global economy.
RCEP negotiations were formally launched in November 2012 at the ASEAN Summit in Cambodia.
The free trade agreement is scheduled and expected to be signed in
November 2018 during the ASEAN Summit and Related Summit in Singapore,
after the first RCEP summit was held on 14 November 2017 in Manila, Philippines. RCEP is viewed as an alternative to the Trans-Pacific Partnership (TPP), a proposed trade agreement which includes several Asian and American nations but excludes China and India.
Asia-Pacific Trade Agreement
The Asia-Pacific Trade Agreement
(APTA), formerly called the Bangkok Agreement, is the only trade
agreement bringing together China and India, in addition to Bangladesh
and the Republic of Korea, among others. The Secretariat of the
agreement is provided by the United Nations Economic and Social Commission for Asia and the Pacific
(ESCAP). While the agreement covers only a limited number of products,
members agreed in 2009 to implement a Trade Facilitation Framework
Agreement aimed at streamlining trade procedures between members.
Asia-Pacific Economic Cooperation
The Asia-Pacific Economic Cooperation (APEC) is a group of Pacific Rim
countries who meet with the purpose of improving economic and political
ties. Although the initial intention was to create a free trade area
covering all membership (which includes China, the United States and
Australia, among others) this has failed to materialize.
In 2014, APEC members committed to taking a concrete step towards
greater regional economic integration by endorsing a roadmap for the
Free Trade Area of the Asia-Pacific (FTAAP) to translate this vision
into a reality. As a first step, APEC is implementing a strategic study
on issues related to the realization of a Free Trade Area of the
Asia-Pacific. The study will provide an analysis of potential economic
and social benefits and costs, analyze the various pathways towards a
Free Trade Area and identify challenges economies may face in realizing
this goal.
Gulf Cooperation Council
The Gulf Cooperation Council (GCC), is a regional intergovernmental political and economic union founded in 1981. The current member states of GCC are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.
Closer Economic Partnership Arrangement
The Closer Economic Partnership Arrangement
(CEPA) is an economic agreement between the People's Republic of China,
the Hong Kong SAR government (signed on 29 June 2003), and the Macau SAR government (signed on 18 October 2003), in order to promote trade and investment facilitation.
The main aims of CEPA are to eliminate tariffs and non-tariff
barrier on substantially all the trade in goods between the three, and
achieve liberalization of trade in services through reduction or
elimination of substantially all discriminatory measures.
Arab League
The Arab League is an association of Arab countries in Africa and Asia. The Arab League
facilitates political, economic, cultural, scientific and social
programs designed to promote the interests of its member states.
Commonwealth of Independent States
Flag of the Commonwealth of Independent States
The Commonwealth of Independent States
(CIS) is a confederation consisting of 12 of the 15 states of the
former Soviet Union, both Asian and European (the exceptions being the
three Baltic states).
Although the CIS has few supranational powers, it is more than a purely
symbolic organization and possesses coordinating powers in the realm of
trade, finance, lawmaking and security. The most significant issue for
the CIS is the establishment of a full-fledged free trade zone /
economic union between the member states, to be launched in 2005. It has
also promoted cooperation on democratisation and cross-border crime
prevention.
South Asian Association for Regional Cooperation
The South Asian Association for Regional Cooperation (SAARC) is an association of eight countries of South Asia, namely Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and, Sri Lanka.
These countries comprise an area of 5,130,746 km² and a fifth of the
world population.
SAARC encourages cooperation in agriculture, rural development, science
and technology, culture, health, population control, narcotics control
and anti-terrorism.
Also, a FTA called South Asia Free Trade Agreement was reached at the 12th South Asian Association for Regional Cooperation summit. It created a framework for the creation of a free trade zone covering 1.6 billion people of member states.
Economic sectors
Primary sector
Asia
is by a considerable margin the largest continent in the world, and is
rich in natural resources. The vast expanse of the former Soviet Union, particularly that of Russia, contains a huge variety of metals, such as gold, iron, lead, titanium, uranium, and zinc.
These metals are mined, but inefficiently due to the control of a few
state-sponsored giants that make participation difficult for many
international mining companies. Nevertheless, profits are high due to a commodity price boom in 2003/2004 caused largely by increased demand in China.
Oil is Southwest Asia's most important natural resource. Saudi Arabia,
Iraq, and Kuwait are rich in oil reserves and have benefited from recent
oil price escalations.
Asia is home to some four billion people, and thus has a well
established tradition in agriculture. High productivity in agriculture,
especially of rice,
allows high population density of many countries such as Bangladesh,
Pakistan, southern China, Cambodia, India, and Vietnam. Agriculture
constitutes a high portion of land usage in warm and humid areas of
Asia.
Many hillsides are farmed in a terrace method to boost arable land. The main agricultural products in Asia include rice and wheat. Opium
is one of major cash crops in Central and Southeast Asia, particularly
in Afghanistan, though its production is prohibited everywhere.
Forestry is extensive throughout Asia, with many of the items of
furniture sold in the developed nations made out of Asian timber. More
than half of the forested land in Asia is in China, Indonesia, and
Malaysia. China is considered a top exporter of wood products like paper
and wood furniture while tropical timbers are a top export in Malaysia
and Indonesia. Fishing is a major source of food, particularly in Japan
and China. In Japan larger, high-quality fish are common while in China,
smaller fish are being consumed at a higher rate. As the middle-class
population in Southeast Asia expands, there is an increase of more
expensive meats and foods becoming a part of the traditional diet.
Secondary sector
The
manufacturing sector in Asia has traditionally been strongest in the
East Asia region—particularly in China, Japan, South Korea, Singapore,
and Taiwan. The industry varies from manufacturing cheap low value goods such as toys to high-tech value added goods such as computers, CD players, games consoles, mobile phones and cars. Major Asian manufacturing companies are mostly based in either South Korea or Japan. They include Samsung, Hyundai, LG, and Kia from South Korea, and Sony, Toyota, Toshiba, and Honda from Japan.
Many developed-nation firms from Europe, North America, Japan and
South Korea have significant operations in developing Asia to take
advantage of the abundant supply of cheap labor. One of the major employers in manufacturing in Asia is the textile
industry. Much of the world's supply of clothing and footwear now
originates in Southeast Asia and South Asia, particularly in Vietnam,
China, India, Thailand, Bangladesh, Pakistan, and Indonesia.
Tertiary sector
A view of the Tidel Park in Chennai, India.
Software industries of late, have been outsourced to Asian cities as
such for good infrastructure, efficient man-power and cheap labour.
Asia's top ten important financial centers are located in Hong Kong, Singapore, Tokyo, Shanghai, Beijing, Dubai, Shenzhen, Osaka, Seoul, Mumbai.
India has been one of the greatest beneficiaries of the economic boom.
The country has emerged as one of the world's largest exporters of
software and other information technology related services. World class Indian software giants such as Infosys, Hindustan Computers Limited, Wipro, Mahindra Satyam and Tata Consultancy Services have emerged as the world's most sought after service providers.
Call centers are also becoming major employers in Philippines due
to the availability of many English speakers, and being a former
American colony familiar with the American culture. The rise of the Business Process Outsourcing
(BPO) industry has seen the rise of India and China as the other
financial centers. Experts believe that the current center of financial
activity is moving toward "Chindia" – a name used for jointly referring to China and India – with Shanghai and Mumbai becoming major financial hubs in their own right.
Other growing technological and financial hubs include Dhaka (Bangladesh), Chittagong (Bangladesh), Chennai (India), New Delhi (India), Pune (India), Bangalore (India), Hyderabad (India), Shenzhen (China), Kolkata (India), Jakarta (Indonesia), Kuala Lumpur (Malaysia), Lahore (Pakistan), Metro Manila (Philippines), Cebu (Philippines) and Bangkok (Thailand).
