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Asian Economics and Markets: Alan Greenspan on Policy Responses (1997)

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• published: 26 Oct 2015
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The Economy of Asia comprises more than 4.4 billion people (60% of the world population) living in 49 different states. Six further states lie partly in Asia, but are considered to belong to another region economically and politically. Asia is the fastest growing economic region and the largest continental economy by GDP PPP in the world. China is the largest economy in Asia and the second largest economy in the world. Moreover, Asia is the site of some of the world's longest economic booms, starting from the Japanese economic miracle (1950–1990), Miracle of the Han River (1961–1996) in South Korea and the economic boom (1978–2013) in China. As in all world regions, the wealth of Asia differs widely between, and within, states. This is due to its vast size, meaning a huge range of different cultures, environments, historical ties and government systems. The largest economies in Asia in terms of PPP gross domestic product (GDP) are China, India, Japan, Russia, South Korea, Indonesia, Turkey, Iran, Saudi Arabia, Taiwan, Thailand, Pakistan, Malaysia and Philippines and in terms of nominal gross domestic product (GDP) are China, Japan, India, Russia, South Korea, Indonesia, Turkey, Philippines, Saudi Arabia, Taiwan, United Arab Emirates, Thailand, Iran, Malaysia and Singapore . Wealth (if measured by GDP per capita) is mostly concentrated in the East Asian territories of Brunei, Hong Kong, Japan, Macau, Singapore, South Korea and Taiwan, as well as in oil rich countries in West Asia such as Saudi Arabia, Qatar, United Arab Emirates, Bahrain, Iran, Kuwait, and Oman. Israel and, to a lesser extent Turkey are exceptions: both lie in the territory of Asia despite not often being counted as such. Israel is a developed country, while Turkey is an advanced emerging country. Asia, with the exception of Japan, South Korea, Taiwan, Hong Kong and Singapore, is currently undergoing rapid growth and industrialization spearheaded by China and India, the two fastest growing major economies in the world. While East Asian and Southeast Asian countries generally rely on manufacturing and trade for growth, countries in the Middle East depend more on the production of commodities, principally oil, for economic growth. Over the years, with rapid economic growth and large trade surplus with the rest of the world, Asia has accumulated over US$4 trillion of foreign exchange reserves – more than half of the world's total. Asia's large economic disparities are a source of major continuing tension in the region.[40] While global economic powers China, Japan, India, and South Korea continue powering through, and Indonesia, Malaysia, Philippines, Thailand, Vietnam and Sri Lanka have entered the path to long-term growth, regions right next to these countries are in severe need of assistance. Given the enormous quantity of cheap labor in the region, particularly in China and India, where large workforces provide an economic advantage over other countries, the rising standard of living will eventually lead to a slow-down. Asia is also riddled with political problems that threaten not just the economies, but the general stability of the region and world. The nuclear neighbors—Pakistan and India—constantly pose a threat to each other, causing their governments to invest heavily in military spending.[41] Military intervention by the United States in Iraq and Afghanistan has also inflamed extremism and resulted in several terrorist attacks in a number of Asian countries. Another impending crisis is the depletion of oil reserves in the Middle East. Most of these economies have traditionally been over-dependent on oil and have had difficulty establishing another pillar in their economies.[42] Yet another potential global danger posed by the economy of Asia is the growing accumulation of foreign exchange reserves. The countries/regions with the largest foreign reserves are mostly in Asia - China (Mainland - $2,454 billion & Hong Kong - $245 billion, June 2010), Japan ($1,019 billion, June 2009), Russia ($456 billion, April 2010), India ($345 billion, April 2015), Taiwan ($372 billion, September 2010), the Republic of Korea ($286 billion, July 2010), and Singapore ($206 billion, July 2010). This increasingly means that the interchangeability of the Euro, USD, and GBP are heavily influenced by Asian central banks. Some economists in the western countries see this as a bad thing, prompting their respective governments to take action.[43] According to the World Bank, China may become the largest economy in the world sometime between 2020 and 2030, while India may become the second largest economy in the world sometime between 2030 and 2035.[44] Based on Hurun Report, for the first time in 2012 Asia surpassed North America in amount of billionaires. More than 40 percent or 608 billionaires came from Asia, where as North America had 440 billionaires and Europe with 324 billionaires. https://en.wikipedia.org/wiki/Economy_of_Asia