Asia s Rise in an Era of Uncertainty

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1 Asia s Rise in an Era of Uncertainty ANIL K. GUPTA Michael Dingman Chair & Professor of Strategy, Globalization & Entrepreneurship Smith School of Business The University of Maryland College Park, MD 20742, USA agupta@rhsmith.umd.edu Web: Tel: February All rights reserved. 1

2 February All rights reserved. 2

3 Key Questions Changing Global Landscape? Asia s Growth Prospects? Asia s Changing Geo-Economics? Asia s Risks? Strategic Implications? February All rights reserved. 3

4 Changing Global Landscape February All rights reserved. 4

5 Global Growth Trends GDP Growth Rate (%) February All rights reserved. 5

6 Share of Global GDP February All rights reserved. 6

7 ? February All rights reserved. 7

8 Neil Gorsuch Supreme Court Nominee Gorsuch: found President Trump s attacks on the judiciary disheartening and demoralizing Tillerson: President Donald Trump's acceptance of Beijing's demand that he recommit to a "one China" policy was heavily influenced by his new top diplomat Rex Tillerson Secy of State James Mattis Secy of Defense Mattis: US Defense Secretary James Mattis on Saturday reaffirmed Washington's commitment to defending Japan, including a group of disputed islands which have been claimed by China February All rights reserved. 8

9 February All rights reserved. 9

10 February All rights reserved. 10

11 Asia s Growth Prospects February All rights reserved. 11

12 February All rights reserved. 12

13 February All rights reserved. 13

14 February All rights reserved. 14

15 February All rights reserved. 15

16 February All rights reserved. 16

17 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 February All rights reserved. 17

18 Asia s Changing Geo-Economics February All rights reserved. 18

19 China s Changing Geo-Economics Merchandise Exports/GDP Ratio (%) February All rights reserved. 19

20 Japan s Changing Geo-Economics Merchandise Exports/GDP Ratio (%) February All rights reserved. 20

21 India s Changing Geo-Economics Merchandise Exports/GDP Ratio (%) + Services Exports = 7.4% of GDP February All rights reserved. 21

22 ASEAN s Changing Geo-Economics Merchandise Exports/GDP Ratio (%) February All rights reserved. 22

23 Asia Becomes More Asian February All rights reserved. 23

24 FTAs Signed and In Effect (examples) ASEAN China, India, Japan, S-Korea, ANZ NZ - China Australia S-Korea FTAs Under Negotiations (examples) Japan S-Korea India Europe, New Zealand BIMSTEC February All rights reserved. 24

25 Asia s Infrastructure Needs February All rights reserved. 25

26 2016 Headlines February All rights reserved. 26

27 2016 Headlines February All rights reserved. 27

28 Asia s Growing R&D Clout % Share of Global R&D Spend US Europe Asia Data: R&D Magazine February All rights reserved. 28

29 But, US Remains Overwhelming Technology Leader February All rights reserved. 29

30 Asia s Risks February All rights reserved. 30

31 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 ? February All rights reserved. 31

32 Strategic Implications February All rights reserved. 32

33 Globalism meets Nationalism FDI > Trade (esp. infrastructure) February All rights reserved. 33

34 Globalism meets Nationalism Reciprocity > One-Sidedness February All rights reserved. 34

35 Deepen Your Asia 2025 > US + Europe Commitment to Asia February All rights reserved. 35

36 India & ASEAN Need to invest a lot more in R&D and skill-building February All rights reserved. 36

37 Leverage China and India as Global Platforms February All rights reserved. 37

38 Above all, champion/ pursue global/ regional stability February All rights reserved. 38

39 February All rights reserved. 39

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