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 Email: agupta@rhsmith.umd.edu Web: www.anilkgupta.com Tel: +1.301.405.2221 February 2017. All rights reserved. 1
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Key Questions Changing Global Landscape? Asia s Growth Prospects? Asia s Changing Geo-Economics? Asia s Risks? Strategic Implications? February 2017. All rights reserved. 3
Changing Global Landscape February 2017. All rights reserved. 4
Global Growth Trends GDP Growth Rate (%) February 2017. All rights reserved. 5
Share of Global GDP February 2017. All rights reserved. 6
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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 2017. All rights reserved. 8
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Asia s Growth Prospects February 2017. All rights reserved. 11
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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 2017. All rights reserved. 17
Asia s Changing Geo-Economics February 2017. All rights reserved. 18
China s Changing Geo-Economics 20.5 33.3 26.3 20.4 Merchandise Exports/GDP Ratio (%) February 2017. All rights reserved. 19
Japan s Changing Geo-Economics 10.1 13.0 14.0 15.3 Merchandise Exports/GDP Ratio (%) February 2017. All rights reserved. 20
India s Changing Geo-Economics 9.2 12.2 13.2 12.0 Merchandise Exports/GDP Ratio (%) + Services Exports = 7.4% of GDP February 2017. All rights reserved. 21
ASEAN s Changing Geo-Economics 68.1 68.3 53.3 47.2 Merchandise Exports/GDP Ratio (%) February 2017. All rights reserved. 22
Asia Becomes More Asian February 2017. All rights reserved. 23
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 2017. All rights reserved. 24
Asia s Infrastructure Needs February 2017. All rights reserved. 25
2016 Headlines February 2017. All rights reserved. 26
2016 Headlines February 2017. All rights reserved. 27
Asia s Growing R&D Clout % Share of Global R&D Spend 2014 2015 2016 US 26.9 26.4 26.4 Europe 21.5 21.3 21.0 Asia 40.2 41.2 41.8 Data: R&D Magazine February 2017. All rights reserved. 28
But, US Remains Overwhelming Technology Leader February 2017. All rights reserved. 29
Asia s Risks February 2017. All rights reserved. 30
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? February 2017. All rights reserved. 31
Strategic Implications February 2017. All rights reserved. 32
Globalism meets Nationalism FDI > Trade (esp. infrastructure) February 2017. All rights reserved. 33
Globalism meets Nationalism Reciprocity > One-Sidedness February 2017. All rights reserved. 34
Deepen Your Asia 2025 > US + Europe Commitment to Asia February 2017. All rights reserved. 35
India & ASEAN Need to invest a lot more in R&D and skill-building February 2017. All rights reserved. 36
Leverage China and India as Global Platforms February 2017. All rights reserved. 37
Above all, champion/ pursue global/ regional stability February 2017. All rights reserved. 38
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