The book Asia Rising was a prescient 1995 forecast of East and South Asia’s continuing rise to economic power, written by the Economist’s
first Asia editor, Jim Rohwer. It is also mostly forgotten because, two
years after its publication, East Asia fell into a deep financial and
economic crisis that seemed to discredit the thesis. And after that,
when China and India’s spectacular growth in the first decade of the new
millennium proved Rohwer right in spades, he wasn’t around to say I told you so because he’d died (in a sailing accident) in 2001.
I knew Rohwer slightly, and I thought of him a lot last week during my first visit to Shanghai, a city that played a central role in his book.
He had forecast that it would be the epicenter of the Asian boom, with
27 million inhabitants by 2020 and a place alongside New York and London
as one of the world’s top three financial capitals. Rohwer — at the
time a resident of Hong Kong — also predicted that he’d be living there,
“in a district … that in imperial days was known as the French
Concession.”
Obviously, and sadly, that last prediction can’t come true.
But one night last week I found myself sitting in the garden of a sturdy
old house in the lovely, leafy neighborhood that is again known as the
French Concession, drinking excellent wine poured by the China-born
executive at a U.S. company who lives there, and concluding that Rohwer
really had been on to something. Shanghai stands a good chance of
meeting or surpassing his population prediction — it’s already at close to 24 million.
It’s not yet quite the financial center Rohwer envisioned, because
China so far hasn’t been willing to take the plunge into full,
unfettered participation in global financial markets (although a new
free-trade zone in Shanghai amounts to a major dipping of toes in the water). It does
have the feel of a soon-to-be-inescapable global metropolis, the kind
of vibrant, affluent, stylish, bold place that will be setting trends
and shaping the world economy for decades to come.
Am I utterly confident in that prediction after four days in Shanghai
and just 10 total in China? (I also visited Beijing, where I spent most
of my time stuck in traffic, and the port city of Dalian, where I spent
most of my time in this crazy-looking new conference center.) No, I’m not, and the superficial impressions of short-term visitors to China should of course be taken with many grains of salt.
But a visit to China, or at least to a few of the big, booming cities
on or near its coast, cannot help but reinforce the view that it is the
inevitabilists like Rohwer who have gotten Asia in general and China in
particular right, while the doubters have gotten things wrong again and
again and again over the past couple of decades. Nothing truly is
inevitable in this world, and China now faces huge pollution problems,
dwindling resources, an aging workforce, and a harder road to economic
progress with the potential gains from cheap-labor-driven export growth
mostly exploited — not to mention the potential for conflict between a
populace growing accustomed to economic freedom and at least partial
freedom of expression and a ruling political party determined to stay in
control. No country has risen to economic greatness without crises and
backward steps along the way. But China’s forward momentum is
remarkable, and it is so huge and so far along the road to joining the world’s wealthy nations that from now on its crises and backward steps will likely be ours, too.
A core prediction of Rohwer’s 1995 book was that by 2020 the center
of global economic gravity would have shifted from the mid-Atlantic to
somewhere in or near Asia — with Asia’s economy bigger than those of
Europe and the Americas combined. With only six years to go and Asia
still quite a few trillions of GDP dollars behind,
that seems like a stretch. But the relative change in fortunes has
nonetheless been dramatic, and betting against Rohwer on Asia has
generally been a bad idea. If only he were around to collect.
One other superficial impression from my China visit: I’ve long been
partial to the argument that India possesses a long-run advantage over
China because while its hard infrastructure of highways and railroads
and airports and power grids is clearly inferior, its soft
infrastructure of laws and politics and a free press is vastly superior
to China’s. But China’s physical infrastructure just keeps getting more
impressive. (Fun fact, from a fascinating article by Keith Bradsher in Tuesday’s New York Times:
“China’s high-speed rail network will handle more passengers by early
next year than the 54 million people a month who board domestic flights
in the United States.”) And over the past decade, with the rise of
social media and an independent business media and the continuing development of its legal system, China has made real progress on the soft stuff—possibly as much as India has in building airports and subways and surely more than India has in improving its electrical grid.
http://blogs.hbr.org/2013/09/do-you-really-want-to-bet-against-china/
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