THE Asian century is nigh upon us, with the inexorable march of economic powerhouses such as China, India – and to a smaller but no less significant extent, Indonesia – well underway, public policy mandarin Kishore Mahbubani said on Saturday.
And the rise of the Asian society to the pre-eminent influence of the US and Europe in past centuries is yet unassailable, said Professor Mahbubani, a former diplomat and dean of the Lee Kuan Yew School of Public Policy, a postgraduate school at the National University of Singapore.
He was delivering the keynote address at a retirement seminar jointly organised by The Business Times and Aggregate Asset Management.
“For more than 1,800 of the last 2,000 years, China and India were always the two largest economies in the world . . . the past 200 years have been a major historical aberration,” the professor said.
“It’s perfectly natural for China, India to resume their places . . . all aberrations come to a natural end.”
China, in particular, has the ability to outstrip the economic might of the US – for decades the largest economy in the world – by as soon as 2030, Prof Mahbubani said.
He cited a PwC report from February last year, which said that by 2030, China’s economy would be the largest in the world – on the basis of gross domestic product at a purchasing power parity scale – at US$36.1 trillion, compared to US$25.5 trillion for the US (in second place).
In 2014, the same figures stood at US17.6 trillion for China and US$17.4 trillion for the US, the PwC report found.
Fast forward another two decades, and the dynamics could yet shift further to Asia; in 2050, China and India could be the two largest economies in the world, the report found.
Yet, the elephant in the room is also the one that could derail the steadfast march of China – and Asia’s – economic progress: tensions in the South China Sea. China, Vietnam, the Philippines, Taiwan, Malaysia and Brunei all have competing claims, and the landmark ruling by an arbitration tribunal at The Hague (which rejected every argument that China made) in mid-July has done little to quell the tensions.
But Prof Mahbubani – who has met many senior Chinese policymakers over the years – noted that the bubbling tensions are unlikely to develop into full-blown conflict.
He said drily: “If you read the papers, most people believe that the biggest flashpoint in the world is (in our region), and that China and ASEAN are about to go to war over the South China Sea.
“It could happen; accidents do happen and it’s conceivable that a shooting match between China and the Philippines, between China and Vietnam could take place, but I’ll take bets with you – it won’t happen.”
The reason for that, Prof Mahbubani espoused, is that “the Chinese realise the stupidest thing they can do” is to go to war, as the worst thing for China would be an effort for containment by the US.
“If there’s a major conflict in the region, that will be a major geopolitical gift to the US, as it . . . would clearly embarrass China, he added. “It’s in their national interest to not have a conflict in the South China Sea . . . and with no war, ASEAN will benefit as well” and the “Asian century is here to stay”.
Indeed, if any Asian city has the capacity to emerge as the “capital city” of the Asian century – in the vein of New York and London – it would be our Little Red Dot, Prof Mahbubani said.
“We are the only city in Asia where the four major civilisation strains can sit comfortably together, live in peace together and can work together.”
Yet, to be able to take on the gilded mantle will require a “boldness of (vision) and a much higher degree of ambition than most Singaporeans have”, Prof Mahbubani said, calling the Singapore-foreigner divide the “biggest existential challenge that Singapore faces today”.
He added: “If (we) want to become a global city, you have got to maintain this open stream and be open for the world to come to you.
“If Singapore can achieve this, then great times are ahead.”