Question

In 2000, Asia accounted for 33% Global GDP. Where will Asia be by 2040 in terms of GDP and total Consumption?

How does Asia demonstrate this with regards to the top global emerging economies?

In Recent years, Asia’s exports (especially China) have fallen 5.6% - 8.6%. What is the underlying cause of this drop in Exports?

Asia used to be known for providing low-cost labor thus many companies developed long supply chains to take advantage of the cost reductions. We are seeing increasing global networks forming around Asia. What kind of networks are forming and howl will they shape global trends? Think about business conglomerates, industries, shifting from Manufacturing to service based economy, R&D, etc.

Finally; Why is this important, and what are the implications for the US and Non-Asia Global economies needing consideration?

Answer 1

Ans)  Asia is increasingly the center of the world economy. By 2040, the sector could account for more than half of global GDP and about 40 percent of global expenditure. Global cross-border flows are shifting towards Asia on seven of eight dimensions, and the region’s growth is becoming more broad-based and sustainable as its constituent economies increasingly integrate with each other.

• Business must adapt to a rapidly growing middle class changing consumer behaviour and profiles.
• Policy-makers must find process to make the region's growth sustainable.
• Poverty and a lack of infrastructure add to the challenges of digital and labour transformation brought by the Fourth Industrial Revolution.

In 2020 Asia’s GDP will overtake the GDP of the rest of the world. By 2030, the region is expected to contribute roughly 60% of global growth. Asia-Pacific will also be answerable for the overwhelming majority (90%) of the 2.4 billion new members of the middle class entering the global economy.

China’s exports fell unexpectedly in August as the trade war with the United States continued to hit the world’s second-largest economy. Shipments fell by 1 per cent in the month after growing 3.3 per cent in July in dollar terms, and below the 2.1 per cent growth expected by analysts in a Bloomberg poll. Imports in the month dropped by 5.6 percent, leaving, according to China’s General Administration of Customs. This is the underlying cause of this drop in exports.

Asia -for-Asia industrial supply chain networks are emerging. Rising consumption, maturing domestic value chains, and uncertainties around global trade are driving the formation of Asia-for-Asia supply chains. Manufacturing sector employment tends to peak at about 30 percent of total employment. Many Asian countries are at 15 to 20 percent in terms of employment in manufacturing, suggesting immense potential for further industrialization. In this developing industrialization network, we determine three major developments.

Asia is leapfrogging through multilocal transformation networks. Asia’s transformation network is much more constrain than its industrialization network. We are seeing a transformation network powered with confined talent but funded with regional capital that has led to the formation of “Multilocal networks”. The solutions are tailored to regional consumers and regulation and usually founded by regional entrepreneurs. Multilocal innovation is happening in all four Asias in different ways. It is important because more capital involved in this sector and these are the implicatons. Advanced Asia and China have built proficient innovation foundations including a base of large incumbent companies and institutions that are providing capital and knowledge to potential innovation in other Asian economies. They have invested and continue to invest excessively in transformation and have built up substantial intellectual property. .