4,000 years of cycles to Predict the Future. Why that Future is in Asia.
Why has Asia historically housed the #1 and #2 worldwide economies? …and will probably take back two positions in the top three within the next few decades.
If you look at historical largest worldwide economies, they have been India (which historically includes Pakistan), along with China and followed by the total of all of the European countries. India and China will sometimes swap economic places for a few centuries, with one briefly moving ahead of the other from time to time.
The Columbian exchange screwed everything up. This added two new continents into the mix. There emerged a new world power over the past few hundred years. The U.S. rose to power following the Spanish American war, but they really started to make waves after the Industrial Revolution. This was the same time when China started their century of humiliation. Was it related? Not directly, but it certainly rerouted world trade away from Asia.
Europeans were already establishing new trading networks into East Asia since the 16th or 17th centuries, but this really started to take off in the 1850’s. After the Monroe Doctrine of 1823, the New World was off limits for the Europeans and they set their focus on carving up Asia and Africa. The British already saw this coming and founded Singapore in 1819. The British took over India in the 1850’s. The French began their conquest of Indo-China in the 1850’s. The French also tried to take over Mexico at the start of the U.S. Civil War, but this was short lived as the U.S. backed the Mexican Republic to restore Mexican independence as soon as the U.S. Civil War concluded.
Both British and French, as well as Americans, set up trading offices in China and started to pick up strategic ports along important trading routes. Most of these smaller empires were unable to compete with the wealthy and technologically advanced Europeans after the Europeans received the earliest of Columbian exchange dividends, leaving them ready for expansion.
These dividends pumped a lot of money into European economies which led to massive technological growth, but eventually everything began to normalize again. After WWII, colonialism became a disadvantage after the American led world order established a new system of free trade, and gradually, Europeans let go of most of their overseas holdings. One by one, Asian and African countries regained their independence. Now East Asian countries are autonomous again and are starting to group together into trading blocs. Trading networks such as ASEAN are forming.
This is why Asia feels like the place to be. Global power started shifting back about 50 years ago after a 100+ year abnormality. I expect when things settle down, there will be constant shifts between the three largest economies, U.S., India and China competing for the top three spots. Europe, if they return to historic normalcy, will likely compete for the next spot.
This puts Vietnam in a very interesting position. The entire region of South East Asia has always been the headwaters of the Silk Road. There have always been mercantile empires in this region; Malay, Champa, Thai, even the Burmese. It is the junction between India and China, where the two mega cultures meet.
What will this mean for the future? Everything is up in the air until we see the long term effects of adding a new region to the mix. Will South East Asia become the headwaters of the Neo Silk Road? Will a shift in trade move toward Taiwan, Korea and Japan as trade routes shift to the northern Pacific to go to North America? Will India lose their advantage to China because China is closer to the center of geographic world trade in the Pacific? Will India become the supplier of Europe and Africa and China shift to be the supplier of the America’s? Who knows?
I may not see the end of this cycle play out in my lifetime.
It is interesting if you are a student of long term trends and stop paying attention to everything you see on the 24 hour news to see that everything is playing out exactly like what should be expected.
This is what makes this part of the world so magical. It is becoming the center of global trade again. Approximately 60% of the world’s population is here. As they say, ‘Demographics is destiny’.
I was thinking about adding this to my post about why I like living in Vietnam, but it seemed a little out of place and it deserved its own quick post.
Below are some charts with links back to their websites with respective demographic and economic data.
Wow Brian really well researched. I concur ln the blocks bit concerned about stability in India.