2013: Asia’s time?
December 31st, 2012
06:14 AM ET

2013: Asia’s time?

By Global Public Square staff

It turns out the Mayans were wrong about the end of the world. Planet earth survived 2012 and is now about to embark on yet another revolution around the sun. But let’s cut the Mayans some slack: they were, after all, projecting thousands of years into the future.

My task is easier. What will the next twelve months look like? What changes are in store for the world of politics and economics?

Asia, with more than half the world’s population, has already begun to usher in 2013. So let’s begin there.

The most consequential developments will take place in China. Xi Jinping will assume the presidency in March. But as the Communist Party’s leader, he is already the most powerful person in the country. How will he lead? The early signs are promising. After his election, Xi’s first official visit outside Beijing took him to Shenzhen. It was a carefully considered choice. Shenzhen is a “special economic zone” – a poster child for China’s economic reforms. While there, Xi made a point of laying a wreath at a bronze statue of Deng Xiaoping, the architect of China’s fiscal reforms in the 1980s. The symbolism was clear: it is time once again for a bend in the road.

China has enjoyed double-digit growth for much of the last two decades, powered by the state’s streamlined vision, cheap labor, and competitive exports. “To get rich is glorious,” said Deng. The pursuit of wealth has led to the creation of a middle class country with middle class demands: China is now a nation of consumers. These consumers increasingly demand more freedom, and less corruption. Beijing’s new leaders may need to make concessions to these demands. After a series of damaging revelations about corrupt officials, China’s new leaders will make public attempts to crack down on graft. They will also mull over what to do about their graying constituency. Decades of the one-child policy have ensured that China will be one of the rare few countries to grow old before it becomes rich. It therefore faces a demographic crisis: more men than women; more old men than young men. Is there anything Beijing can do to prevent it from becoming the next Japan? After months of guessing and posturing, 2013 will finally reveal what China’s new leaders have in store.

While it’s difficult to predict how much China’s economy will reform, you can certainly expect Beijing’s foreign policy to continue its muscle-flexing and assertive course. Put simply, it is good politics. Stoking nationalist sentiments has immediate payoffs.

Perhaps the more worrying link in this chain is Japan. In electing the staunchly nationalist Shinzo Abe as prime minister, Japan’s dispute with China over the Senkaku (or Diaoyu) islands could escalate. But I’m going to stick my neck out and say that Abe is more likely to focus on the economy in 2013. Japan’s growth is sputtering; its population is aging rapidly. Abe’s real mandate is to fashion an ambitious fiscal stimulus to jumpstart the economy. He’ll know it’s his only chance to stay in power: Japan, after all, has now had 17 prime ministers in the last 23 years. Japanese want a sunny economy – not war with their much bigger, more powerful neighbor.

More from GPS: Japan in 2013

What will 2013 bring for Asia’s third-biggest economy? The fiscal story from India in the last twelve months has been fairly dismal. Growth fell to 5.3 percent and the rupee declined to a record low. Yet those reverses may have opened the door for a revival. New Delhi’s reform-minded prime minister, the economist Manmohan Singh, finally mustered the political courage to launch a set of reforms that will encourage foreign investment, competition, and growth. (Although as always with India, politics may yet get in the way). My prediction is that better sense will prevail.

An easier forecast to make is what will happen to India’s neighbors: both Pakistan and Bangladesh have elections scheduled for 2013. In Pakistan’s case, a peaceful handover of civilian power would mark the first such instance in the country’s history. The usual suspects are in play to replace President Asif Ali Zardari – former Prime Minister Nawaz Sharif and the popular former cricketer Imran Khan. Neither of them is likely to be as reliable an American ally as the incumbent.

Elsewhere in Asia, there will be bright spots, especially for the economy. The World Bank’s latest estimates point to rises across the continent. Indonesia, the Philippines, and Malaysia will continue to impress.

Don’t forget Myanmar. 2012 saw it go from international pariah to being courted by multinational companies as the next frontier of growth. It proves a couple of things about international relations: sanctions do work; and there is now a realistic path for other isolated states to follow. If an authoritarian regime is willing to open up and allow democratic ideals to grow, the world tends to welcome it back into the international fold. Are you listening, North Korea?

2013 will be Asia’s year. Its countries will lead global growth and its people will rise as consumers. Singapore’s Kishore Mahbubani points out that while 500 million Asians enjoyed middle class standards in 2012, that number will rise to 1.75 billion by 2020. That single statistic will change the way the world sees Asia – and the way Asians will impact the world.

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Topics: 2013: What's Next? • Asia • China • India • Japan

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soundoff (23 Responses)
  1. j. von hettlingen

    HAPPY NEW YEAR, ALL OF YOU!

    December 31, 2012 at 3:41 pm | Reply
    • j. von hettlingen

      The immediate concern of China's leadership is to appease the wider public and tackle social problems, like narrowing the wealth gap and providing for rule of law nationwide. The aging population should be a stumbling block for China's economic growth. The one-child policy isn't absolute. There are families that have more than one child. So the country should concentrate on a smaller, but skilled and educated population.

      January 1, 2013 at 8:22 am | Reply
      • j. von hettlingen

        please read: SHOULDN'T BE a stumbling block.

        January 1, 2013 at 10:40 am |
    • j. von hettlingen

      J@pan would be better off to focus on its domestic woes rathan than indulging in an imperialistic dream. Its neighbours are self-assertive emerging economies and don't want to be patronised by J@pan's nationalists with their nostalgic past.

      January 1, 2013 at 8:31 am | Reply
    • j. von hettlingen

      The Indian subcontinent is the most populated region on earth.
      Bangladesh has an area of 55,598 sq miles and over 150 million inhabitants.
      Pakistan – 307,374 sq miles – and approx. 176 million inhabitants.
      India – 1.2 million sq miles and 1,2 billion inhabitants.
      Unless the politicians deal with social grievances and improve the livelihood of the people there, anarchy would more likely to prevail in the region.

      January 1, 2013 at 8:43 am | Reply
      • Rob Harris

        There is more anarchy in the United Stated; The reason is simple : since Asians can happily live to their means, use public transport, have access to good medicines provided by the government, have low cost schools and universities, cheaper child bearing, better benefits provided by employers, they are more likely to be stable than the Americans who use on the average 1.5 cars per family, have no savings, no public transport, pay a hell lot for insurance and medicines, cannot afford education, are barely literate, cannot afford to have kids and have employers who rip them off.

        January 2, 2013 at 11:45 am |
      • anon

        We get it that you like to hear yourself talk.

        January 2, 2013 at 1:41 pm |
      • pritish sinha

        nice comment .

        January 3, 2013 at 6:21 pm |
  2. Calvin

    Sure asia is growing fast it a giant frontier in world economies

    January 1, 2013 at 2:18 am | Reply
  3. Aristocles

    They've been saying "it's going to be Asia's time" since at least as long as I've been alive. For 24 years they have predicted it, and for 24 years it hasn't happened.

    January 2, 2013 at 11:40 am | Reply
    • Rob Harris

      Partly true, since in the 21st century, no country can fully dominate other countries;

      But wait, the purchasing power of a dollar worth is much more in India/China/Asia!!!

      January 2, 2013 at 11:48 am | Reply
  4. anon

    The Mayans never said the world would end. They claimed an apocalypse. Since the author and 99% of the people in the world don't know the definition of apocalypse I shall explain. apocalypse – greek – literal translation means to reveal. Make aware of, show the truth, etc.. The extra caveat of destruction was not added until sometime after 1980 by someone who erroneously made a connection between the word and the book of revelations. This author is a Phukin nUb.

    January 2, 2013 at 1:38 pm | Reply
  5. bh

    I don't understand why Indians and their neighbors cannot control their population. I mean, why would you want to have 5 – 10 kids when all you can see around you are crowds of people and basically terrible economic conditions.

    January 2, 2013 at 2:24 pm | Reply
  6. 72,000 CEVILAINS KILLED IN SYRIA,,,,,,,

    ,,,,,,,,,,,,,,,,,,,,IT IS ABOUT 70,000 CEVILINAS ARE KILLED IN SYRIA BY THE IRANIANS BACK GOVERNMENT BACKED BY RUSSIA WEAPONS FROM IRAN AND IRAQ AND FIGHTERS FROM IRAQI SHIIA AND HEZBOLLAH THOSE EVIL TERROR SHIIA THUGS USE TAQEYA TO LIE TO USA.the number 70,000 is the correct number plus more than 54000 child women and old men died from hunger ,sickness illness related to war which is not count for, and more than 143000 prisoners all Sunni , kurds captured by the alwayet SHIIA cult 12% of the populations . while usa, France, NATO and UN doing nothing why Libya and Iraq were attacked for only 400 death!!!!!!!is it because there is not much oil in Syria!!!!shame on you OBAMA

    January 2, 2013 at 7:41 pm | Reply
  7. Marco Hsiao

    [A demographic crisis will not exist in Mainland China]

    Now the birth rate in the Republic of China (ROC Taiwan), South Korea, and big cities of Mainland China are all quite low. 35 years ago 320,000 babies were born on ROC Taiwan in a year, last years is 190,000 babies. It is still declining continually. Now ROC government even encourages for more children.

    After industrialization and higher education, marriage is delayed; parents just want one child or two children naturally. So one child policy in Mainland China now is relaxing, it will be abolished completely and naturally within 15 years. (It could be abolished in any year, according to economists' opinion; insisting the policy is difficult; abolishing it that is so easy).

    January 3, 2013 at 1:57 am | Reply
  8. Marco Hsiao

    [Responsible and diligent to construct the great country]

    When corrupt US government and news media murders more than 130,000 innocent people in Iraq, Libya, Pakistan and Syria for prompting the US military spending (to bankrupt the US treasury), Mainland China is concentrating on constructing infrastructures. Hundreds of thousands officials on Mainland China are responsible and diligent to construct their country. Hundreds of million people in Mainland China have upgraded living standards actually.

    2013 will be a nice years for Chinese world (Mainland China, ROC Taiwan, Hong Kong, Macau and Singapore), and it is just the beginning. Frankly in 2019 Mainland China will be largest importer and GDP (in PPP); at that time Chinese world also would unite together to restore ancient glory possibly.

    January 3, 2013 at 1:58 am | Reply
  9. krm1007 ©™

    The Indian Debacle could overshadow the European crisis. GDP that has dropped off the cliff (4% est), budget deficits, collapse of Indian rupiah, rampant poverty, unemployment, FDI reversal, companies leaving town are some of the disastrous events that are threatening the Indian state. The downward spiralling is so severe that the Indian government has been unable to control it. Even the Americans have been unable to help and several trips by the treasury secretary were not helpful. This also has security repercussions for India and US defense secretary and secretary of state have flown in to counsel India on how to protect its borders with the help of Israel/IDF. Rumors have it that the breakup of India along the lines of Soviet Union is a very plausible scenario that I am sure intelligence agencies all over the world are factoring in their geopolitical stress tests.

    January 5, 2013 at 5:23 pm | Reply
  10. krm1007 ©™

    THE ECONOMIC SUBJUGATION OF INDIA & The Taming of Hindus!!!
    The one most successful aspect of recent American foreign policy has been the conquest of India without firing a bullet. That is the beauty of capitalism used as a Trojan Horse! Economic victory! Give them a taste of steak and they will never settle for hamburgers again. USA now owns India Inc. not only economically but also militarily as economic subjugation ultimately leads to military domination.

    January 5, 2013 at 5:24 pm | Reply
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    April 24, 2013 at 7:07 pm | Reply

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