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__________________________________________Anil K. Gupta, Asia’s Rise in an Era of Uncertainty.February 2017. All rights reserved.
Asia’s Risein an Era of Uncertainty
ANIL K. GUPTAMichael Dingman Chair &Professor of Strategy, Globalization & EntrepreneurshipSmith School of BusinessThe University of MarylandCollege Park, MD 20742, USAEmail: [email protected]: www.anilkgupta.comTel: +1.301.405.2221
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__________________________________________Anil K. Gupta, Asia’s Rise in an Era of Uncertainty.February 2017. All rights reserved. 2
__________________________________________Anil K. Gupta, Asia’s Rise in an Era of Uncertainty.February 2017. All rights reserved.
Key Questions
• Changing Global Landscape?
• Asia’s Growth Prospects?
• Asia’s Changing Geo-Economics?
• Asia’s Risks?
• Strategic Implications?
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Changing Global Landscape
__________________________________________Anil K. Gupta, Asia’s Rise in an Era of Uncertainty.February 2017. All rights reserved. 4
GDP Growth Rate (%)
Global Growth Trends
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Share of Global GDP
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?
__________________________________________Anil K. Gupta, Asia’s Rise in an Era of Uncertainty.February 2017. All rights reserved.
Neil GorsuchSupreme Court Nominee
Rex TillersonSecy of State
James MattisSecy of Defense
Gorsuch: “found President Trump’s attacks on the judiciary disheartening and demoralizing”
Tillerson: “President Donald Trump's acceptance of Beijing's demand that he re-commit to a "one China" policy was heavily influenced by his new top diplomat”
Mattis: “US Defense Secretary James Mattison Saturday reaffirmed Washington's commitment to defending Japan, including a group of disputed islands which have been claimed by China”
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Asia’s Growth Prospects
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__________________________________________Anil K. Gupta, Asia’s Rise in an Era of Uncertainty.February 2017. All rights reserved.
Asia’s Growth Drivers
• Low per capita incomes Large headroom for productivity growth
• Scale + High absorptive capacity (for capital and technology)
• Embrace of math, science and engineering
• Reasonably strong institutions
• Near-complete absence of “resource curse”
• Limited external dependence
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Asia’s Changing Geo-Economics
__________________________________________Anil K. Gupta, Asia’s Rise in an Era of Uncertainty.February 2017. All rights reserved. 18
__________________________________________Anil K. Gupta, Asia’s Rise in an Era of Uncertainty.February 2017. All rights reserved.
China’s Changing Geo-Economics
Merchandise Exports/GDP Ratio (%)20.5 33.3 26.3 20.4
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__________________________________________Anil K. Gupta, Asia’s Rise in an Era of Uncertainty.February 2017. All rights reserved.
Japan’s Changing Geo-Economics
10.1 13.0 14.0 15.3Merchandise Exports/GDP Ratio (%)
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__________________________________________Anil K. Gupta, Asia’s Rise in an Era of Uncertainty.February 2017. All rights reserved.
India’s Changing Geo-Economics
9.2 12.2 13.2 12.0Merchandise Exports/GDP Ratio (%) + Services Exports = 7.4% of GDP
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__________________________________________Anil K. Gupta, Asia’s Rise in an Era of Uncertainty.February 2017. All rights reserved.
ASEAN’s Changing Geo-Economics
68.1 68.3 53.3 47.2Merchandise Exports/GDP Ratio (%)
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__________________________________________Anil K. Gupta, Asia’s Rise in an Era of Uncertainty.February 2017. All rights reserved.
Asia Becomes More Asian
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FTAs – Signed and In Effect (examples)• ASEAN – China, India, Japan, S-Korea, ANZ• NZ - China• Australia – S-KoreaFTAs – Under Negotiations (examples)• Japan – S-Korea• India – Europe, New Zealand• BIMSTEC
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Asia’s Infrastructure Needs
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2016 Headlines
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2016 Headlines
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2014 2015 2016US 26.9 26.4 26.4Europe 21.5 21.3 21.0Asia 40.2 41.2 41.8
% Share of Global R&D Spend
Data: R&D Magazine
Asia’s Growing R&D Clout
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But, US RemainsOverwhelming Technology Leader
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Asia’s Risks
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__________________________________________Anil K. Gupta, Asia’s Rise in an Era of Uncertainty.February 2017. All rights reserved.
Asia’s Risks
• External policy risks (esp. US)?
• US 2020?
• Breakup of EU?
• Major military conflicts?
• Currency risks?
• Capital flight?
• Slow pace of reforms in China?
• Modi 2019-2024?
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Strategic Implications
__________________________________________Anil K. Gupta, Asia’s Rise in an Era of Uncertainty.February 2017. All rights reserved. 32
Globalismmeets
Nationalism
FDI > Trade(esp. infrastructure)
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Globalismmeets
Nationalism
Reciprocity > One-Sidedness
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Asia 2025 > US + Europe
Deepen Your Commitment
to Asia
__________________________________________Anil K. Gupta, Asia’s Rise in an Era of Uncertainty.February 2017. All rights reserved. 35
India & ASEAN –Need to invest a lot
more in R&D and skill-building
__________________________________________Anil K. Gupta, Asia’s Rise in an Era of Uncertainty.February 2017. All rights reserved. 36
LeverageChina and India as Global Platforms
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Above all, champion/
pursue global/regional stability
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