or decades, China has been a sleeping giant that’s been getting ready to become the epicentre of power on the global stage. And, while Western nations have dropped the ball after the coronavirus outbreak, it is the nations in the East whose societies have proven themselves to be robust enough to face the new reality of collapsing economies, increased demands for healthcare, and an environment that is starting to fight back.
We know that no one ever seizes power with the intention of relinquishing it. Power is not a means; it is an end.
George Orwell, 1984
In the world that we all grew up in, and indeed for the last 500 years, the West has been the epicentre of global politics and commerce. Christianity is a global religion that was spread around the world throughout various European Empires. Spanish, French and especially English are the mediums for global commerce, diplomacy and scientific research. The lightbulb, the internal combustion engine, railways, penicillin, the Internet… all of these are Western inventions. All of the major international institutions, such as the IMF, the World Bank, NATO and the European Union were designed by the West and are an expression of Western dominance. And, of course, the world has not only benefited from Western dominance, but the West has brought about a lot of negative developments that define our modern world. Climate change is a child of the Industrial Revolution, born in Europe, raised in the United States and propagated all over the rest of the world. The millions of deaths from two World Wars were suffered at the hands of weapons that were designed by the West, without even mentioning the calamitous Western invention of nuclear weapons.
However, the world is being remade. And this story starts with geography.
Geography, the nature and relative arrangement of places and physical features, has been a permanent feature of our society throughout history. However, as we know, technology in recent years has rendered many geographic constraints invisible. For example, we can conduct business over video calls, transferring information over the Internet. No longer do we have to travel long distances to deliver newspapers. Communication from one end of the world to the other is seamless. However, as technology propagates throughout the world, the construction of societies and competition between them returns to one basic fact that defined our societies for millennia. The civilisation with the biggest population produces the most.
Something that we take for granted today is that China and India have massive populations, but we rarely ask ourselves why. China and India account for roughly 37% of the entire global population of 7.7 billion people, with China being home to about 1.4 billion and India roughly 1.3 billion in 2019. British economist, Angus Maddison compiled data sets with rich geographic data over centuries and throughout history that shows us that India and China have had the lion’s share of the global population for an incredibly long time.
So why do these countries play host to such massive populations? The answer is far simpler than you think.
The Tibetan Plateau, a 2,500,000 square kilometre expanse of glaciers and the largest fresh water source on the planet. It is five times the size of France and is referred to as the “Rooftop of the world”. It is the water source for the Wei River and Indus River valley that China and India were built upon. For a very long time, the world’s societies were built along rivers with massive capacities, rich in silt, such as the Wei River and Indas River Valley. These water sources made agriculture on a massive scale possible, which made massive populations possible and this made cultures and civilizations possible. Indeed, if you look at population density maps for India and China today, you will see that the most densely populated areas are still situated near the Tibetan Plateau’s headwaters and drainage basins.
The combination of massive populations and political order built huge armies and these armies are what shaped India and China. The countries were built by this plateau.
Returning to the rich data collected by Angus Maddison, you will see that the share of the global GDP attributed to India and China looks incredibly similar to their share of the global population.
However, in the mid-1800s things started to change.
Throughout the centuries, China and India accounted for roughly half of the world’s wealth. Why? Simply because farmers all over the world until 1820, it turns out, were all roughly equally productive. So the more people a civilization had, the more they produced. Yet this all changed after the Industrial Revolution. Europe was able to convert their industrial power into bigger outputs. Through expansion and colonisation, they were able to secure critical trade routes to Asia, which were incredibly important due to the mountain-laden land routes that separate Asia from Europe, particularly the Himalayas.
By 1952, China and India only accounted for about 10% of global GDP. The US went from practically nothing in 1820 to become the greatest producer due to railway networks and rapid industrialisation. Europe kept pace, but Asia declined. However, as India and China started to Industrialize, after India won its independence and The Great Leap Forward (Second Five Year Plan) was implemented by China’s Chairman Mao Zedong, you start to see India and China rise due to the technology and industrialisation that reorganised their economies. People became almost as productive in the East as they were in the West. And in equally productive worlds, it is those with the largest populations that produce the most.
With 60% of the world’s population living in Asia today, Asia had a larger economic output than any other continent in 2019, according to The IMF.
Looking back in history, again, the first sign of an Asian resurgence can be found in Japan. In 1945, Japan was in ashes, following their loss in World War 2. And, through various economic programs and through efforts to modernise its destroyed infrastructure, Japan turned into an economic powerhouse three decades later, with levels of prosperity equal to that of the West and, until 2010, it was the world’s second largest economy. In fact, during the 70s and 80s, there was a massive panic throughout Europe about how Japanese exports would kill jobs in Europe.
However, in the 1990s, Japan fell into a deflation trap, a period of economic stagnation often referred to as the Lost Decade. It was a period of economic hardship that Japan has only fairly recently emerged from.
The next example of Asian excellence comes in the form of South Korea. After the Korean War ended in 1953, South Korea had an income per capita that was roughly equivalent to that of Ghana. Today, that figure stands at $40,000 and South Korea has the 12th highest nominal GDP in the world, a figure of over $1.6 trillion. And most of us see the success story of Korea’s economy in our everyday lives with automobile manufacturers Hyundai and electronics manufacturers like LG and Samsung being just some of countless South Korean brands that have massive market shares in many industries today. However, some of the most important developments in Asian economies have only occurred over the last 30 years.
The massive changes in Asia will not be found in the developed economies of Japan and South Korea, but rather the developing powerhouses, China and India. Their massive share of the population, again, is very significant to this story.
Since 1978, two years after Chairman Mao died and economic reforms were put into place, China has averaged roughly a 9% annual growth rate. China’s GDP in 1979 was $168 billion. Today it is $13.61 trillion (81 times larger). And not only has output increased, trade has been a significant factor. As recently as 2006, the US was the top trade partner for 127 countries, while China was the top trade partner for 70. Today, the US is the top trade partner for 72 countries, while China is the top trade partner for 128 countries.
And this story doesn’t end there. China has, by far, the world’s largest cash reserves, with over $4 trillion in reserves. It is also the United States’ top creditor and accounts for about 5% of the US National debt (about $1.2 trillion), while Japan accounts for $1.1 trillion of US debts. Beyond this, China’s military spending ($237 billion) is roughly one third of that of the US ($750 billion), and that gap is closing quickly. Saudi Arabia is far, far behind in third place, spending $67.6 billion on their military, while you may be surprised to see India in fourth place on $61 billion.
So what does this all mean?
The US is now going to have to take much bigger risks if it wants to defend its allies in the Asian region, such as Australia, South Korea, Japan etc. China has the military might to exercise its authority over the region and the control that it has over the South China Sea (the nine-dash line), which is at the heart of trade routes for almost every South-East Asian nation, is an example of this. Not to mention, the airspace over the East China Sea is under Chinese control and it makes up for a huge defence exclusion zone, and planes have to get clearance from the Chinese government to enter that airspace.
This tactic to control strategic choke points for trade routes across the Indian and Pacific Oceans is not only almost identical to the strategy taken by colonial empires, but also shows China’s confidence in its ability to defend itself against its adversaries.
The story of India’s rise is one with a marginally slower growth rate (6.16% on average from 1951-2019). And India is also a very poor country, with the World Bank estimating that 23.6% of it’s population falls below the poverty line.
But, if you move the growth rate timeline back to the 1990s, when various economic reforms were introduced, you will find that it actually rises to about 7% (although, lately it has slowed down like China’s). And while almost 60% of Indians live on less than $3.10 a day, 271 million people were lifted out of poverty in India in a decade. And, still, European and American countries would kill for growth rates that are even half of India’s. Militarily, India is the world’s fourth largest spender, and all of this shows that we are returning to an economic pattern that has prevailed throughout history – a new shift in the global climate, where power shifts back to Asia.
And this isn’t necessarily a good thing, especially because of climate change and the consequences of larger industrial outputs. Furthermore, a rising Asia could create fractures and conflicts throughout the region. India, Japan, Vietnam, Indonesia and Australia are all concerned about the rise of China and are already forming military coalitions to exchange intelligence in order to placate China’s military influence. In the past, it was the Tibetan mountains that kept China and India from ever engaging in military conflicts of a massive scale, but as the geographic barriers have faded into irrelevance through nuclear weaponry and airborne conflict, there is the threat of a major war breaking out, the likes of which we’ve never seen. However, China and India are just two nations on a far larger continent.
Asia at the center of the world
Asia, for the last 500 years of colonialism, all the way up to the end of the Cold War, has largely fallen off of the map. However, over the past 4000 years, most of the major empires were Asian. From the Indus empire to the Babylonians, the Zhou and Tang dynasties, to the Byzantine Empire, to the the Khmer and Mongolian Empires, Asian empires from East to West, North to South, have been dominant throughout the course of history right up until the mid-colonial era. It’s cultures and commerce were dominant way of life that ruled all along the golden age of the Asian Silk Roads. Even today, it is impossible to understand the essence of Asian societies without taking into account the flows of ideas across the great Asian expanse.
And now, after 500 years, Asia is able to recover its lost essence. China and India’s populations dominate the global share and will continue to do so for many years, as the global population is set to plateau at about 10 billion people. Indeed, more than five billion of those people live in Asia.
However, even though most people tend to focus on China, it doesn’t singularly represent the whole of Asia. There are more than three billion Asians that don’t live in China. The correct way to understand the Asian evolution is not through the distinct blocks within it competing with one another, but rather through waves of mutually reinforcing growth.
Japan’s modern resurrection which has taken it to become a $5 trillion economy was able to stimulate the growth of the “Tiger economies” (South Korea, Taiwan, Hong Kong and Singapore) into a set of economies who have a collective GDP of $5 trillion. Together, all of these countries, through trade relationships, have been able to drive China’s economic miracle over the last 40 years that has resulted in a $13 trillion economy. And history doesn’t stop there.
Since the turn of the 21st century, the South and South-Eastern economies (Pakistan, India, Bangladesh, Myanmar, Thailand, Indonesia, Vietnam and the Philippines) have all amassed the means to build a collective GDP of over $6 trillion through their young, dynamic societies. If they grow as quickly as China has since its economic reforms, they will match China’s current GDP by 2028. So, how exactly is Asia’s massive wave of growth unfolding?
Just like Japan, Singapore, Hong Kong and Taiwan were leading investors in China’s economic miracle, all of those countries, as well as China are leading investments into the next wave of Asian growth.
The Belt and Road initiative is the largest coordinated infrastructure investment program in all of human history. For many, it is the centerpiece of a new golden age of Silk Road. For others, it is seen as a plot by China to dominate Asia…
Infrastructure is quite simply the essential platform for countries to grow and modernise. Not only is India spending vast sums of money on its own infrastructure, but it’s the largest recipient of loans from the Beijing based Asian Infrastructure Investment Bank. When an empire invests in its colonies’ infrastructure, it helps them to build and modernise. China has learned lessons that took colonial powers 300 years to learn in a fraction of the time.
And, more pertinently, Pakistan, Myanmar, Malaysia and the likes are already starting to renegotiate their deals, from which they will benefit more, not the other way around. The Belt and Road initiative will restore Asia to its natural state of multi-polarity, with respectful autonomy exercised across all Asian civilisations.
Thanks to the power of connectivity and trade agreements, Asia is truly integrating like never before. Countries all across Asia are developing new relationships with other countries far across the region, trading in energy, food, goods, technology, labour and capital. And what’s truly crucial is that Asian countries are trading much more with each other than any other region in the world, making it incredibly self-sufficient. And, as the US-China trade war plays out, China will merely accelerate trade with other nations to make up for the shortfalls from future deterioration in its dealings with America. Asia is becoming more and more self-sufficient with each passing year.
In years gone by, it was Asia that would produce for the West, but now Asian economies have become so large that it is the West that is producing for Asia. Asia is slowly stitching itself back together.
All of the busiest international airline routes in the world are between pairs of Asian cities. This means business travellers, entrepreneurs, students and tourists are criss-crossing the region in growing numbers. And all of this has led to a significant intermingling among Asian people. For instance, Japan has never had more foreign migrants than it does today, which shows exactly how Asia has truly become the land of opportunity in the 21st Century.
The fall of the West
You could be forgiven for thinking that the current economic crisis that the world is facing is a result of the coronavirus outbreak. But you would be wrong. Major media outlets will have you believe that nobody’s at fault for this freak event; that it’s an outlier. Then they will turn around and tell you not to trust China’s state-owned media (which you really shouldn’t), but won’t disclose who owns their private media corporations and what those owners will stand to lose if you find out about how their speculative lending, how their rigging of the stock markets, political offices and every major facet of society has all led us to the point where the coronavirus is merely the catalyst to an inevitable collapse. The shrinking of governments and monopolisation of industries around the world stretches back for more than a century. The Rockefeller family’s influence over American politics, industry and banking dates all the way back to the late 19th Century, and countless other oligarchs, such as the Koch Brothers (owners of Koch Industries) and the Walton family (owners of Walmart), have followed similar templates to the Rockefellers. This isn’t even detailing the enormous influence that people like Jeff Bezos, Mark Zuckerberg and Bill Gates have over almost the entire world simply due to their tech platforms. And in other parts of the Western World, such as the EU, power has been consolidated in similar ways, albeit through political avenues rather than the hand-to-mouth, blatant and unabashed system of legalised bribery that rules the US.
In reality, even though the West claims to be a bastion of freedom, there is very little freedom left. Money talks and democracies don’t speak for the people anymore. They exist to serve a nations wealthiest, its most influential and its most ruthless people. And worse yet, the solidarity between Western nations, such as the EU member states, as well as the various allies within NATO, doesn’t seem to truly exist anymore. The Western Bloc that resisted the expansion of the Soviet Union and its satellite states during the Cold War is a distant memory. Rather, Western states appear to be more interested in isolationism, rather than co-operation. Profits have been prioritised over quality of life and the value systems set in place by the likes of John Locke, Thomas Jefferson, John Stuart Mill and Immanuel Kant have been lost in translation.
The great leaders of the 20th Century like Franklin D Roosevelt, Winston Churchill, John F Kennedy and Nelson Mandela just don’t exist anymore. Perhaps an entire generation of unchallenged freedoms, reality television, social media and the Kardashians is what numbed our senses to the point where we have come to accept a social order where business interests take precedent in political decision making above the preservation of human life. Our unmitigated freedom, underpinned by widespread mistrust in our governments has also created a culture of defiance where people refuse to vacate the streets and to stay home while a contagious virus sweeps across the planet – a display of defiance which is so counter-intuitive that I wouldn’t know where to begin. Can you imagine if, in World War 2, sirens went off and people were told to get inside bomb shelters, they just defied the governments orders? They’d be killed in an instant. There weren’t cries of conspiracy or selfish complaints about social isolation, people just listened and did what they were told to do because it was necessary. Oh, how that generation of heroes must be rolling in their graves at the sight of today’s citizens of the world running amok in the middle of a global pandemic…
So where can we find the answers to why this crisis of leadership and social incoherence exists? The clear answer can be found in a time that remains fresh in our memories… 2016. Two incredibly important elections that may come to define our generation took place that year. The first was the referendum for Britain to leave the EU (Brexit) and the second was the election of Donald Trump into the White House. The outcome of both of those elections were symptoms of a shift to conservatism, manifested in general xenophobia and a collective desire to shrink the size of governments. Islamophobia and the sham War on Terrorism drove fear into the hearts of the British and American people, while the economic pains that people were facing forced their hands to make dramatic decisions when they took to the ballot boxes. And this story actually stretches even further back, nine years prior.
2007 marked the first year of the global financial crisis, which was the most serious financial crisis since the Great Depression of the 1930s. Here, I’d like to note that World War 2 began less than a decade after the Great Depression and there certainly was a correlation between the two – especially in terms of what happened in Germany, which was already suffering from hyperinflation due to the Treaty of Versailles and unmanageable reparation payments for its role in World War 1 – it was the great fake populist rhetoric that allowed Adolf Hitler to come to power and seize control of the nation.
However, the global financial crisis was really fought over two fronts in 2007/08 – the first front being through the housing market bubble that led to the collapse of the American economy, caused by market deregulation on behalf of the Bush administration – and the second front stemmed out of the Greek government debt crisis, which stems out of the failure of financial oversight in the European Union where Greece was able to accumulate a lot of debt without any noteworthy safety mechanisms. The crisis in America dealt the Greek economy an unexpected blow and it was staring down the barrel of a gun that was the longest recession of any advanced capitalist economy to date. Any monetary policy practiced within Greece itself was rendered ineffective due to a host of consequences that stemmed out of irresponsible borrowing, and its crisis led to a contagion throughout the Eurozone. All of the 27 member states were forced into austerity measures after their smooth sailing in the post-Cold War era that brought together a series of trade agreements leading to unprecedented levels of prosperity in the region.
And make no mistake, Europe was and still is a collective economic powerhouse today, with a GDP of $18.8 trillion, but the intra-trade agreements (somewhat similar to those that are the backbone of Asia’s resurgence) that date back to the 40s, right after WW2, are under significant threat, not least due to Brexit. Britain has always had one foot in and one foot out of the Eurozone and it never took on the Euro as its official currency, breaking the trend with every other EU member state.
However you look at it, the EU has never recovered the influence and economic successes that made it such a significant political and economic body in the early 21st Century and it’s unlikely that it ever will. And, of course, amidst the Eurozone crisis, the Syrian Civil War and the Arab Spring took place, the former of which is still ongoing. Displaced citizens of the War torn regions created the perfect platform for the leaders and investors who made the mistakes that truly led to the global financial crisis to take on xenophobic rhetoric and blame refugees for the lowered standards of living – a convenient cover-up.
Nonetheless, today North America and, across the Atlantic, European nations are far weaker than the superpowers they were after the Cold War 30 years ago. The abandonment of fair, mutually beneficial trade agreements, the lack of political cohesion, the “America First” style isolationism and rampant xenophobia have resulted in divided nations that were willing to turn to Donald Trump and Boris Johnson to enforce the short-sighted political will that has taken over the countries.
While Asian nations have grown at rapid rates and accelerated trade between each other, Western nations have been growing at glacial rates (US grew at 2.9% in 2018 and Germany grew at 1.5%, for example) or even contracted (the entire EU looks set to contract by 7.1% in 2020, it’s worst contraction since World War 2) and trade agreements are falling apart (Brexit, NAFTA).
And here’s the real kicker, while multi-national corporations listed on the major stock exchanges receive huge sums of money in bailouts to stay afloat, the standard of living in the West is not improving. The Federal minimum wage in America has not risen in over a decade and wages in general haven’t kept pace with inflation (“real wages”) since the 1970s. The value of the dollars paid to employees after being adjusted for inflation has slowed compared to overall economic productivity. So for all of the fantastic technological advances in the United States, the standard of living hasn’t actually improved in almost half a century. In Europe, this is different, thanks to their more socially conscious economic structures, and there has actually been a rise in real wages recently, for reasons that are not yet clear, but it must also be noted that Europe is coming off of a low-base and they still haven’t recovered the level of prosperity that existed at the turn of the 21st century.
So, all in all, standards of living have fallen, trade agreements are ending and social cohesion is on the decline in the West. For almost the exact same reasons that The East is growing, The West is on the decline.
COVID-19: The king-slayer
Again, the coronavirus may go down in history as the cause for the global economic collapse, but the truth is that the global economy has been built on a house of cards. The coronavirus outbreak was merely the straw that broke the camel’s back for top-heavy economies, run by an oligarchic political order. Say what you want about the authoritarian natures of the East, particularly the Chinese Communist Party, there is very little that actually sets them apart from the West. The West is simply more discreet about their unchallenged authority and the stranglehold over the media narrative exemplifies the subtlety of their rule. The average person in the West has about as much political influence/autonomy as the average person in the East. The East is just more open about the way they exert their near total power over the governments… and their leaders aren’t fools, unlike the reality TV star that has access to nuclear weapons in the USA.
The distinct differences between the tactical acumen of the Western and Eastern political figures when dealing with COVID-19 is as clear as daylight. While SARS (8,096 cases – 774 deaths) and MERS (2,519 cases – 866 deaths) are still fresh in the minds of Asian and Middle Eastern countries and health crisis measures had already been put in place following those respective outbreaks in 2002 and 2012, the worst pandemics the West has had to face in the 21st Century were the 2009/10 N1H1 (swine flu) and the Ebola outbreak of 2013/14. N1H1 resulted in a total of 18,449 of pediatric deaths from 1,632,710 cases in the US and the Ebola outbreak led to one death out of a grand total of seven cases shared between the United States, Spain, Italy and the UK.
While America was unable to handle N1H1 and were lucky to dodge the Ebola bullet, which hurt West Africa more than anyone else, the debates have raged on about universal healthcare and whether it’s worth the costs. While Canada, Australia, New Zealand and South Korea have flattened their curves with relative ease, the US’ is only rising. However, nobody has asked the question “how are you going to pay for it?” when big corporations are given trillions in bailouts following the outbreak. And it’s in the UK, who have extensively argued over cutting NHS funding for several years that are suffering in Europe, while countries with well-funded systems like Denmark, Iceland and Norway that have fallen on the lower end of the spectrum for confirmed cases in Europe. There is a very compelling argument for the “strong state” when it comes to handling the coronavirus and pandemics like it that may well become part of our everyday lives around the world in the not-so-distant future.
And, again, this is where the East completely blows the West out of the water in their ability to contain the spread of the pandemic. Below is the cumulative curve for confirmed cases of the coronavirus in China, South Korea, Vietnam, and Hong Kong:
Now compare the progression of their cumulative cases in comparison to the United States, Italy, Spain, Germany, France and the UK:
A picture is worth a thousand words and the graphs above says it all. There are countless factors that need to be taken into consideration when analysing why COVID-19 has affected the West far worse than the East and, many will consider wild conspiracy theories, but the reality is that Western nations and Eastern nations are structured very differently and the Eastern societies are far more capable of withstanding such a crisis. And, let’s not forget, history doesn’t end here.
There will come a time when the coronavirus pandemic comes to an end. Yet, for the East, whose curves are all flattening it will reach its conclusion far sooner than in the West, whose curves are going in quite the opposite direction, on a sharp incline.
Western economies will be shut down far longer than those in the East, households will suffer even more and even the freedoms that we are so boastful about in the West will fall by the wayside.
Our freedom of movement has already been restricted in the name of slowing this virus and who knows what will come next. And our every-man-for-himself approach to international co-ordination – the decline of NATO and the EU, as well as the impotency of the UN – will leave us all stranded in an isolation without a semblance of international co-operation. Asia, meanwhile, will have the opportunity to flaunt its self-sufficiency and will only rely on itself for both the production and the consumption of goods and services. By the time Western economies reopen, they will have fallen behind and the subsequent recessions or depressions will render them mere onlookers as Asia becomes the new centre for opportunity, influence and power.