FOR MODERATES TIRED of political pissing matches, it's always refreshing to hear consensus-builders such as former U.S. Secretary of State James Baker, a former Democrat and White House chief of staff during the Reagan era. Respected by anyone who aims dead center, Baker is a master deal-maker who builds trust between parties, rather than divide them. Among other negotiations, he persuaded Russia to stand with the United States in condemning Iraq's invasion of Kuwait in the 1990s, when Iraq was an ally and "client" of Russia. Imagine Baker helping the U.S. and China join forces in the 21st century as economic partners and military allies. Baker spoke recently at the Asia Society in Houston, Texas, on the Pacific Century:
GOOD NEWS AMID the usual horrific news. As civilians die in Syria and other war zones, new data by the World Bank shows that the number of people living in extreme poverty fell dramatically in the developing world from 2005 to 2008. Some 22%, or 1.3 billion, of the developing world's population lived on $1.25 or less a day in 2008. That's down from 43% in 1990 and 52% in 1981.
MOST OF US don't see the megatrends until they suddenly surface and smack us. Geopolitical experts have been saying for years, decades even, that the world economic order is shifting, that U.S. dominance will be challenged this century by our allies and rivals in Asia.Some in the West scoffed at the idea, or stayed stuck in denial. The latest blunt warning comes from former Australian prime minister Kevin Rudd. The era of Pax Americana will be succeeded by "Pax Pacifica," he recently told the Asia Society in New York.
"The world today is approaching a turning point of truly historic proportions," Rudd said. "Historical trends are by definition slow to emerge. They then gather pace, often with a sudden burst of momentum . . . often well before the political community and broader public opinion has fully woken up to the fact. And so it is with the global economic power of the United States of America. For the last 130 years the United States has been the world’s largest economy. Within the current decade, that will no longer be the case when China takes its place."
A NEW REPORT by the World Bank confirms all the more that global economic power and growth, by many measures, is shifting rapidly from the United States to fast-growing countries. By 2025, six economies -- Brazil, China, India, Indonesia, South Korea and Russia -- will drive more than half of all global growth, and the global monetary system likely will be dominated by the U.S. dollar, the euro and the Chinese renminbi, according to the report. In a news release, World Bank chief economist Justin Yifu Lin says: "The fast rise of emerging economies has driven a shift whereby the centers of economic growth are distributed across developed and developing economies – it’s a truly multipolar world."
COFFEE, TEA OR CHI?Hong Kong Airlines, a young regional air carrier in Asia, is training its newly-hired flight attendants in kung fu's Wing Chun style, a style well-suited to self-defense in tight places. The martial-arts training also is part of Hong Kong Airlines' marketing campaign in advance of its expected initial public offering next year. The publicity stunt worked, catching the eyes of the Wall Street Journal, MSNBC, the Economist and this low-rent blogger. Jet Li they ain't, but a few fighting techniques are better than none, I guess.
THE FATE OF the United States economy and future ties with China could ride on how well the U.S. handles the growing wave of Chinese investments to the West, according to a new report today by the Rhodium Group and the Asia Society. Some Chinese investments, such as CNOOC's failed merger bid for U.S. oil company Unocal several years ago, have faced political backlash from U.S. lawmakers. But the report finds that the U.S. can "embrace Chinese investments" while also safeguarding national security. China has 230 foreign direct investments in the U.S. valued at $12 billion, and China's worldwide direct investments will hit $1 trillion by 2020, according to Rhodium. "China already is a massive global trader" and "Chinese investors are coming to the West in growing numbers already," co-author Daniel Rosensays in an Asia Society video. "The question is not whether we're going to let it in, but whether we're going to slam the door on it, now that it's starting."
A BIT OF ECONOMIC hope here. Japan's battered economy likely will recover over the next year-and-a-half in the wake of the country's earthquake, tsunami and nuclear disaster, according to the OECD's Economic Survey of Japan 2011 released today. The survey says that a downturn should not last long, as government reconstruction picks up, as business and trade returns to normal, and as Japanese consumers start spending again. The OECD projects that the economy will slow to 0.8% this year, then see 2.3% growth in 2012.
AS INNOVATION FEVER sweeps the United States, Clyde Prestowitzwarns in Foreign Policy that the U.S. actually needs stronger manufacturing to boost innovation. Unfortunately, weaker production is badly hurting America in global competition, he writes. In his BigThink.com interview, Prestowitz says that partnerships between big business and government -- not innovation -- were the driving force in U.S. economic growth from the 1800s to the 1950s.
LIKE A VAST wave, you could see this business megatrend rising a decade or so ago. More revenues, more investments,more employees, more R&D, more everything coming from fast-growing businesses overseas. Now, that trend -- the emergence of new companies in rapidly developing economies -- clearly is a powerful pillar of the global economy that will reshape the world, says the Boston Consulting Group, which has been studying global companies for many years.
