Introduction
Asia has been on the rise in the global economic front due to its large population, integrated manufacturing, and strategic information technology incubation. These factors are significant in supporting and sustaining steady economic growth. This paper supports the assertion that the decline of western hegemony is associated with Asia’s ascendance as the leader of the global economy.
The Ascendance of Asia as the Leader of the Global Economy
Countries operate around different political regimes with unique policy formulation, implementation, and review that affects the business environment. These policies are aligned by policymakers toward self-interest protection and profit optimization. Since the beginning of the new millennium, Asian economies such as India and China have become economic powerhouses in terms of an aggregate investment portfolio and economic growth. The systematic and consistent rise is attributed to political and economic policies, which also double as a source of tension between the west and the Asian giants (Xing 24). Considering the past and current economic performance of many countries in Asia such as India and China against past and present economic performance of western economies, it is to predict a shift in economic power from the west to Asia as the Asian economies continue to position themselves as the next economic powers.
The continued shift of economic power from west to Asia is due to the invaluable role of innovation, quality, competitive productivity, infrastructure, business incubation, and a large ready market. For instance, Asian economies such as India and China have experienced simultaneous takeoff as China assumes the role of a manufacturing giant. At the same time, India takes the role of leading technology and service industries. India has a better banking industry, while China’s competitive market continues to lure more investments.
Though China is ahead of India, this trend might change shortly due to its younger workforce (Xing 35). The increasing economic power in the two giants is related to India and China’s ability to complement each other. Besides, consumers are rising in the two countries. Currently, India and China have more than 500 million internet and cellular phone users besides arise in the young professional in the fields of engineering, finance, and life sciences, which are market-oriented.
The shift has resulted from increasing business and knowledge base in China, India, and other Asian economies due to their large population and resent economic growth and expansion strategies. For instance, China is establishing massive industrial parks catalyzed by a robust population of skillful citizen and first-class infrastructure. India is becoming a global ICT center supported by highly skilled youthful workers. They are developing first-generation technological applications and quality innovations at competitive market rates as compared to the counterparts in the western world (Ikenberry 26).
Even though the US had the highest global gross domestic product of 26%, which is more than the GDP of India and China combined, it is estimated that the trend will change by 2025. China and Indian economies’ GDP will rise to 28% and 17%, respectively (Jagdish and Panagariya 124). This is because the eastern countries such as China, India, and other Asian economies have not stretched their factors of production such as labor, technology, and the market as compared to the US. This means that the shift will continue as China, India, and other Asian economies become more competitive than the US in terms of skills, cost of production, and readily available market (Xing 39).
The youthful and innovative Indians, Chinese, and other Asians are very optimistic that the economic shift will propel the Asian countries to become the new global business and innovation leader. The youths in the Asian countries such as China and India are well-positioned to tap into the underutilized knowledge skills to acquire competitive standing in business incubation and expansion since China, India, and other Asian economies have a very large population that will provide the much needed ready market for the technology-based products creating the youths.
The motivated generations of youthful Asians such as the Chinese and Indian citizens are likely to transform China, India, and other Asian economies into the next United States by utilizing the current enormous technological and business capacity that is supplementary to create the first high quality and innovative incubational business opportunities (Ikenberry 29). These changes will test industrialized nations’ true commitment to global and open trade since the surplus production, competitive cost of production, and high-quality, innovative products will be exported to all corners of the globe (Xing 72).
At present, most international businesses prefer Asian economies such as China and India. This choice of location is as a result of the largely untapped market of these economies and regions surrounding them, the friendly regimes with direct intervention in business activities, massive cheap and readily available labor, and friendly business regulation policies on investment and business functioning based on acculturation. Despite being at the same level in comparative analysis with most Western economies, Asian economies are currently playing a bigger role as retail business leaders and industrialists since the cost of doing business in the western economies is very high (Xing 84). Reflectively, the existence of abundant, cheap, and sustainable labor supply gives Asian economies an upper hand in the competitive market and ensures their survival and sustainability in the long run. For instance, China, India, and other Asian economies have a pool of cheap, innovative, and skillful labor force that can support mass production at sustainable cost as compare to the western economies where labor laws and other regulations have made the cost of labor unrealistic (Ikenberry 32).
Conclusion
From the above reflection, it is apparent that the declining western hegemony can be associated with the ascendance of Asia as the leader of the global economy due to numerous competitive advantages such as large population to support consumption economy, affordable cost of doing business, and large untapped markets against the shrinking of economies in the west that have been stretched to their limits over the years.
Works Cited
Ikenberry, John. “The Rise of China and the Future of the West: Can the Liberal System Survive?” Foreign Affairs 87.1 (2008): 23-37. Print.
Jagdish, Bhagwati, and Arvind Panagariya. Economic Reforms: How They Produced Inclusive Growth, London, UK: Oxford University Press, 2012. Print.
Xing, Li. The Rise of China and the Capitalist World Order, Farnham, UK: Ashgate Publishing, 2010. Print.