In the post coronavirus pandemic era, Asia continues to consolidate its position as the world’s manufacturing and trade hub. Asia accounted for 57 percent of global GDP growth between 2015 and 2021. In 2021, Asia contributed 42 percent of world GDP (at purchasing power parity), more than any other region. It cemented its status as a major presence in world trade.
In 2021, Asia accounted for 53 percent of global goods trade, and between 2001 and 2021, 59 percent of trade growth.
If we consider Asia’s role in the world’s 80 largest trade routes, accounting for more than 50 percent of the value of global trade, forty-nine include Asia on at least one end, and 22 on both ends.
Asia is home to 18 of the 20 fastest-growing corridors, and 13 of the 20 largest. Asia has become the world’s largest economic and trading region. It is home to 18 of the world’s 20 fastest-growing corridors, it is also where 13 of the world’s 20 largest trade corridors by value are.
This majority position gives Asia an opportunity to influence and shape a new era not only for its own economies but for the world. But even if from a position of strength, by being at the nexus, it will face a heightened version of the world’s new global challenges in the five domains.
World order.
Asia is the world’s trade crossroads but could find itself in the crosshairs of trade tensions. Can Asia retain its commercially pragmatic model, keeping the benefits of trade amid growing geopolitical tension, and continuing to make its complementarity a strength?
Technology platforms.
The value created by tech is shifting beyond manufacturing, where Asia excels. Can Asia reinvent itself as a technology creator rather than (mostly) a technology manufacturer and consumer in a world where key frontier technologies may be more contestable?
Demographic forces.
Asia has the people to fuel growth, but the headwinds of aging are fiercest in the higher-productivity economies of the Pacific Rim. Can Asia deal with the pressing challenges of rapid aging in its highest-productivity economies by shifting its value chains and boosting productivity everywhere?
Resource and energy systems.
Asia’s net-zero transition is simply bigger because it remains the world’s industrial base and has surging energy demands. Can Asia manage its dual challenge of securing rapidly growing energy needs and reducing the world’s largest carbon emissions?
Capitalization.
Asia’s lower capital returns are not sustainable if the cost of capital and balance sheet stresses rise at a time when the region will demand the majority of global capital to continue growing. Can Asia mobilize all the capital it needs to power growth, deepening its financial markets to improve capital allocation while shoring up resilience amid balance sheet stress?