Fireside Chat, Interview
Parag Khanna: "The Future is Asian"
- The resurgence of Asia is framed as a historical normalization following a 200-year divergence caused by the Industrial Revolution, characterized by the "Asianization of Asia" where regional trade exceeds external trade and infrastructure finance is being rebuilt through the Silk Road concept over the last 30 years.
- Economic integration is projected to accelerate through the Belt and Road Initiative and the Asian Infrastructure Investment Bank (AIIB), which aims to address a projected $3 to $4 trillion infrastructure financing shortfall in Asia over the next decade while helping large and small economies diversify and access capital.
- China's economic trajectory includes a shift in its electronics sector where import shares of exports have fallen from 60-65% to below 20%, a trend driven by long-standing industrial policies like "Made in China 2025" that are expected to accelerate due to trade wars and U.S. export controls rather than diminish.
- Future power dynamics suggest that by May 2017, the Asian-led world order had effectively begun, with predictions that by 2100 this period will be recognized as the foundational date for this order, driven by a system where Asian nations prioritize regional complementarities and flexible alliances over rigid Western-style alliances.
- Strategic risks and opportunities include the concern that 75% of debt in small Asian nations is now owed to China at non-concessional rates, creating dependency, while the U.S. missed opportunities to influence China via the TPP; conversely, it is predicted that rising powers in a heterogeneous Asian context are less likely to experience military conflict despite historical power transition risks.
- Regional economic convergence is expected to continue as Asian nations adopt industrial policies similar to China's, with countries like India planning "Make in India" initiatives, while Japanese commercial presence remains deeply distributed across Chinese provinces and Japan, South Korea, and Taiwan are viewed as key alternative supply chain partners for Chinese manufacturers bypassing U.S. components.