Northern appears well positioned to capatilise on the...

Northern appears well positioned to capatilise on the opportunities resulting from ... The rise of Asia

The pace and scale of change in the region have been staggering (Chart 1).1 In the past 20 years, China and India have almost tripled their share of the global economy and increased their absolute economic size almost six times over. By 2025, the region as a whole will account for almost half the world’s output. Many millions of people will have been lifted out of poverty. They will live longer and be better connected to the world.

Chart 1:Asia’s economic resurgence is set to continue

[The bubble area in Chart 1 reflects the size of GDP for Asia’s economies, adjusted for purchasing power parity in 2011 prices (Maddison 2010, IMF 2012c, Conference Board 2012 and Treasury projections). See glossary for definition of Asia and description of projections]

Asia’s ability to capitalise on open global markets for goods and services has been crucial to its economic transformation. Central to this has been a widespread commitment to investing in people and physical capital.

Asia continues to develop against a backdrop of persistent global challenges. First among these is the present weakness in major advanced economies, where more moderate economic growth is expected. Second, there are global challenges such as climate change and other emerging challenges in the areas of food, water and energy security. Third, Asia has policy challenges of its own, including the continuation of market-based reforms to promote economically and environmentally sustainable growth, dealing with urbanisation, ageing populations in some countries and developing social safety nets.

Asia’s economic rise is shifting other dynamics in the region and across the globe. The United States will remain the most powerful strategic actor in Asia for the foreseeable future. But the economic growth and broader international interests of Asia’s large powers, especially China and India, are changing the established strategic order. Rising national wealth is allowing states to modernise their defence forces, to acquire more advanced capabilities and to project power. At the same time, economic growth will put more pressure on energy, water and food resources. Existing regional strategic tensions remain, such as North Korea’s nuclear program and unresolved territorial disputes.

Australia’s strategic landscape is becoming more crowded and complex.

http://asiancentury.dpmc.gov.au/white-paper/executive-summary/rise-of-asia