Economy of Asia
|Economy of Asia|
|Population||4.2 billion (60% of the world)|
|GDP||Nominal: US$18.515 trillion (2010)
PPP: US$24.077 trillion (2010)
|Per capita: 7.9% (2010)|
GDP per capita
|Nominal: US$4,629 (2009)
PPP: US$7,041 (2009)
|3.37 million (2011)|
|Unemployment||3.8% (2010 est.)|
|Most numbers are from the International Monetary Fund.
All values, unless otherwise stated, are in US dollars.
The economy of Asia comprises more than 4.2 billion people (60% of the world population) living in 46 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 differing cultures, environments, historical ties and government systems. The largest economies in Asia in terms of both nominal and PPP gross domestic product (GDP) are China, Japan, Russia, India, Taiwan, South Korea, Indonesia, Philippines, Thailand, Malaysia, Singapore, Australia, Turkey and Vietnam.
Wealth (if measured by GDP per capita) is mostly concentrated in the East Asian territories of Hong Kong, Macau, Japan, South Korea, Singapore, Brunei, and Taiwan, as well in oil rich countries in West Asia such as Saudi Arabia, Qatar, United Arab Emirates, Bahrain, Iran, Kuwait, and Oman. Israel and Turkey are notable exceptions: both lie in the territory of Asia despite not often being counted as such, and are also extremely wealthy nations and powerful economies. 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.
- 1 Economic development
- 2 Asian countries by GDP
- 3 Trade blocs
- 3.1 Asia-Pacific Trade Agreement
- 3.2 Asia-Pacific Economic Cooperation
- 3.3 Association of Southeast Asian Nations
- 3.4 Closer Economic Partnership Arrangement
- 3.5 Arab League
- 3.6 Commonwealth of Independent States
- 3.7 South Asian Association for Regional Cooperation
- 4 Currency
- 5 Economic sectors
- 6 See also
- 7 References
Ancient and medieval times
China and India alternated in being the largest economies in the world from 1 to 1800 A.D. China was a major economic power and attracted many to the east, and for many the legendary wealth and prosperity of the ancient culture of India personified Asia, attracting European commerce, exploration and colonialism. The accidental discovery of America by Columbus in search for India demonstrates this deep fascination. The Silk Road became the main East-West trading route in the Asian hitherland while the Straits of Malacca stood as a major sea route.
Prior to World War II, most of Asia was under colonial rule. Only relatively few states managed to remain independent in the face of constant pressure exerted by European power. Such examples are China, Siam and Japan.
Japan in particular managed to develop its economy due to a reformation in the 19th century. The reformation was comprehensive and is today known as the Meiji Restoration. The Japanese economy continued to grow well into the 20th century and its economic growth created various shortages of resources essential to economic growth. As a result the Japanese expansion began with a great part of Korea and China annexed, thus allowing the Japanese to secure strategic resources.
At the same time, Southeast Asia was prospering due to trade and the introduction of various new technologies of that time. The volume of trade continued to increase with the opening of the Suez Canal in the 1860s. Manila had its Manila galleon wherein products from the Philippines were traded to Europe. The Philippines was the first Asian country to trade with Latin America via Acapulco. Tobacco, coconut, corn, and sugar trade was the most in demand during that time. Singapore, founded in 1819, rose to prominence as trade between the east and the west increased at an incredible rate. The British colony of Malaya, now part of Malaysia, was the world's largest producer of tin and rubber. The Dutch East Indies, now Indonesia, on the other hand, was known for its spices production. Both the British and the Dutch created their own trading companies to manage their trade flow in Asia. The British created the British East India Company while the Dutch formed Dutch East India Company. Both companies maintained trade monopolies of their respective colonies.
In 1908, crude oil was first discovered in Persia, modern day Iran. Afterwards, many oil fields were discovered and it was learnt later that the Middle East possesses the world's largest oil stocks. This made the rulers of the Arab nations very rich though the socioeconomic development in that region lagged behind.
In the early 1930s, the world underwent a global economic depression, today known as the Great Depression. Asia was not spared, and suffered the same pain as Europe and the United States. The volume of trade decreased dramatically all around Asia and indeed the world. With falling demand, prices of various goods starting to fall and further impoverished locals and foreigners alike. In 1941, Japan invaded Malaya and thus began World War II in Asia.
Following World War II, the People's Republic of China and India, which account for half of the population of Asia, adopted socialist policies to promote their domestic economy. These policies limited the economic growth of the region. They are being abandoned in India and reformed in China. In contrast, the economies of Japan and the Four Asian Tigers (South Korea, Taiwan, Singapore and Hong Kong) were economically successes, and the only successful economies outside of the Western World.
One of the most pronounced Asian economic phenomenons during this time, the Japanese post-war economic miracle, greatly impacted the rest of the world. After World War II, under central guidance from the Japanese government, the entire economy was undergoing a remarkable restructuring. Close cooperation between the government, corporations and banks facilitated easy access to much-needed capital, and large conglomerates known as keiretsu spurred horizontal and vertical integration across all industries, keeping out foreign competition. These policies, in addition to an abandonment of military spending, worked phenomenally well. Japanese corporations as a result exported and still export massive amounts of high quality products from "the Land of the Rising Sun".
Another amazing economic success story is that of South Korea's, also referred to as the Miracle on the Han River. The country was left impoverished after the Korean War, but it was able to recover with double digit annual growth rates. Many conglomerates, also known as chaebols, such as Samsung, LG Corp, Hyundai, Kia, SK Group, and more grew tremendously during this period. South Korea has now become the most wired country in the world.
Taiwan and Hong Kong experienced rapid growth up till the 1990s. Taiwan became, and still remains one of the main centers of consumer electronics R&D as well as manufacturing. However, unlike in Japan and South Korea, the bulk of Taiwan's economy is dependent on small to medium sized businesses. Hong Kong, on the other hand, experienced rapid growth in the financial sector due to liberal market policies, with many financial institutions setting up their Asian headquarters in Hong Kong. Till today, Hong Kong has been ranked as the world's freest economy for many years running, and it remains among one of the world's top 5 leading financial centers.
In Southeast Asia, economic development was fueled by the growth of the bamboo network. The bamboo network refers to a network of overseas Chinese businesses operating in the markets of Southeast Asia that share common family and cultural ties. The network expanded as Chinese refugees emigrated to Southeast Asia following the Chinese Communist Revolution in 1949.
This period was also marked by military conflict. Wars driven by the Cold War, notably in Vietnam and Afghanistan, wrecked the economies of these respective nations. When the Soviet Union collapsed in 1990-91, many Central Asian states were cut free and were forced to adapt to pressure for democratic and economic change. Also, several of the USSR's allies lost valuable aid and funding.
The Chinese economy boomed under the economic measures undertaken by Deng Xiaoping, in the late 1970s, and continuing under Jiang Zemin in the 1990s. After the liberalization of the economy of India, growth in India and China increasingly shifted the center of gravity of the global economy towards Asia. In 2007, China's economic growth rate exceeded 11% while India's growth rate increased to around 9%. One of the factors was the sheer size of the population in this region.. Surprisingly, this size of population was considered as biggest reason for lack of growth of economy by both governments earlier and both countries have taken strong population control measures to improve their economy.
Meanwhile, South Korea, Taiwan, Hong Kong and Singapore emerged as the Four Asian Tigers with their GDPs growing well above 7% per year in the 1980s and the 1990s. Their economies were mainly driven by growing exports. The Philippines only began to open up its stagnated economy in the early 1990s. Vietnam's economy began to grow in 1995, shortly after the United States and Vietnam restored economic and political ties.
Throughout the 1990s, the manufacturing ability and cheap labor markets in Asian developing nations allowed companies to establish themselves in many of the industries previously dominated by companies from developed nations. Asia became one of the largest sources of automobiles, machinery, audio equipment and other electronics.
At the end of 1997, Thailand was hit by currency speculators, and the value of the Baht along with its annual growth rate fell dramatically. Soon after, the crisis spread to Indonesia, Malaysia, South Korea, Hong Kong, Singapore and many other Asian economies, resulting in great economic damage on the affected countries (Japan largely escaped the crisis). In fact, some of the economies, most notably those of Thailand, Indonesia, and South Korea actually contracted. This later would be known as the Asian financial crisis. By 1999, most countries had already recovered from the crisis.
In 2001, almost all of the Asian and global Economies was affected by September 11 Attacks, with Indonesia and Japan was hardest. But, In 2002/2003, Asian and global Economies began to recover from 9/11 Attacks in United States.
In 2004, parts of Sumatra and South Asia were severely damaged by an earthquake and the subsequent tsunami. The tsunami wreaked havoc, causing massive damage in the infrastructure of the hit areas, particularly Indonesia, and displaced millions. For a short time, GDP contracted among nations such as Indonesia and Sri Lanka, despite massive inflow of foreign aid in the aftermath of the disaster.
Japan suffered its worst post-World War II economic stagnation set in the early 1990s (which coincided with the end of Cold War), which was triggered by the latter event of Asian financial crisis in 1997. It, however, rebounded strongly in early 2000s due to strong growth in exports, although unable to counteract China in 2005 after China gradually surpassed it as the largest economy in Asia.
In 2008, the Global Financial Crisis, triggered by the housing bubble in the United States, caused a significant decline in the GDP of the majority of the European economies but have spared the Asian economies, when at the same time also experience slowdown in the economic growths, particularly Japan, South Korea, and China, only to pick up back in their normal high growths at the end of the year.
The Arab Spring since 2011 had caused economic malaise in Syria, Lebanon and Yemen, amongst the most adversely affected nations in the Middle East. At the same time, in early 2010s, Iraq, Saudi Arabia, the United Arab Emirates and Kuwait registered high GDP growths in the years that followed due to increased oil prices and further diversification of exports, as well as rising Foreign exchange reserves.
In 2013, in a once-in-a-decade party leadership reshuffle in China (change of Hu-Wen Administration to Xi-Li Administration), the Chinese economy experienced a significant slowdown in the GDP growth, slowing down from the unprecedented decades of 9-10% annual growth to around 7-8%, which has significant effect in some developing economies, particularly in Southeast Asia and India, excluding the Philippines, which managed to grow at rates at par with China in the period 2012-2013. Philippines has been recently affected by the Typhoon Haiyan, the strongest storm on record, in November 2013, killing at least 5,200 and displacing millions more, although the disaster has a minimal effect on the country's economy by the dawn of 2014.
Asia's large economic disparities are a source of major continuing tension in the region. 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 large number cheap and amply available labor in the region, particularly in China and India, where large workforces provide an economical 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 heavily invest in military spending.
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.
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 ($284 billion, July 2010), Taiwan ($372 billion, September 2010), the Republic of Korea ($286 billion, July 2010), 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.
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.
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.
Asian countries by GDP
millions of USD
millions of USD
|GDP PPP per capita
|China (PRC)||9,181.377||13,395.396||9,844||East Asia|
|East Timor||6.147||25.772||21,705||Southeast Asia|
|Hong Kong SAR of China||273.658||381.918||52,722||East Asia|
|North Korea||28.000||40.000||1,900||East Asia|
|South Korea||1,221.801||1,666.755||33,189||East Asia|
|Macau SAR of China||22.100||18.470||59,451||East Asia|
|Papua New Guinea||15.973||19.828||2,834||Southeast Asia|
|Saudi Arabia||745.273||937.163||31,245||West Asia|
|Sri Lanka||65.833||135.979||6,531||South Asia|
|Republic of China (Taiwan)||489.213||929.495||39,767||East Asia|
|United Arab Emirates||396.235||272.027||30,122||West Asia|
Asia-Pacific Trade Agreement
The Asia-Pacific Trade Agreement (APTA), formerly called the Bangkok Agreement, is the only trade agreement bringing together China and India, in addition to Bangladesh and the Republic of Korea, among others. The Secretariat of the agreement is provided by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP). While the agreement covers only a limited number of products, members agreed in 2009 to implement a Trade Facilitation Framework Agreement aimed at streamlining trade procedures between members.
Asia-Pacific Economic Cooperation
The Asia-Pacific Economic Cooperation (APEC) is a group of Pacific Rim countries who meet with the purpose of improving economic and political ties. Although the initial intention was to create a free trade area covering all membership (which includes China, the United States and Australia, among others) this has failed to materialize.
Association of Southeast Asian Nations
The Association of Southeast Asian Nations (ASEAN) is a political, economic, and cultural organization of countries located in Southeast Asia. Founded in 1967, its aim is to foster cooperation and mutual assistance among members. The countries meet annually every November in summits.
The current member countries of ASEAN are Myanmar (Burma), Laos, Thailand, Cambodia, Vietnam, Philippines, Malaysia, Brunei Darussalam, Singapore and Indonesia. East Timor and Papua New Guinea is given an observer status.
In 2005 ASEAN was instrumental in establishing the East Asia Summit (involving all ASEAN members plus China, Japan, South Korea, India, Australia and New Zealand) which some have proposed may become in the future a trade bloc, the arrangements for which are far from certain and not yet clear.
The Asian Currency Unit (ACU) is a proposed currency unit for the ASEAN "10+3" economic circle. (ASEAN, the mainland of the People's Republic of China, India, Japan, and South Korea).
Closer Economic Partnership Arrangement
The Closer Economic Partnership Arrangement (CEPA) is an economic agreement between the People's Republic of China, the Hong Kong SAR government (signed on 29 June 2003), and the Macau SAR government (signed on 18 October 2003), in order to promote trade and investment facilitation.
The main aims of CEPA are to eliminate tariffs and non-tariff barrier on substantially all the trade in goods between the three, and achieve liberalization of trade in services through reduction or elimination of substantially all discriminatory measures.
The Arab League is an association of Arab countries in Africa and Asia. The Arab League facilitates political, economic, cultural, scientific and social programs designed to promote the interests of its member states.
Commonwealth of Independent States
The Commonwealth of Independent States (CIS) is a confederation consisting of 12 of the 15 states of the former Soviet Union, both Asian and European (the exceptions being the three Baltic states). Although the CIS has few supranational powers, it is more than a purely symbolic organization and possesses coordinating powers in the realm of trade, finance, lawmaking and security. The most significant issue for the CIS is the establishment of a full-fledged free trade zone / economic union between the member states, to be launched in 2005. It has also promoted cooperation on democratisation and cross-border crime prevention.
South Asian Association for Regional Cooperation
The South Asian Association for Regional Cooperation (SAARC) is an association of eight countries of South Asia, namely Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka and Afghanistan. These countries comprise an area of 5 130 746 km² and a fifth of the population of the world.
SAARC encourages cooperation in agriculture, rural development, science and technology, culture, health, population control, narcotics control and anti-terrorism.
South Asia Free Trade Agreement
The South Asia Free Trade Agreement is an agreement reached at the 12th South Asian Association for Regional Cooperation summit. It creates a framework for the creation of a free trade zone covering 1.6 billion people in India, Pakistan, Nepal, Sri Lanka, Bangladesh, Bhutan and the Maldives. It came into effect on 1 January 2006.
|This article's factual accuracy may be compromised due to out-of-date information. (January 2010)|
Below is a list of the currencies of Asia, including all fully Asian states plus Russia, with exchange rates between each currency and both the Euro and US dollars As of 7 March 2014[update].
Asia is by a considerable margin the largest continent in the world, and is rich in natural resources. The vast expanse of the former Soviet Union, particularly that of Russia, contains a huge variety of metals, such as gold, iron, lead, titanium, uranium, and zinc. These metals are mined, but inefficiently due to continued use of poorly maintained, obsolete machinery left over from the communist era. Nevertheless, profits are high due to a commodity price boom in 2003/2004 caused largely by increased demand in China. Oil is Southwest Asia's most important natural resource. Saudi Arabia, Iraq, and Kuwait are rich in oil reserves and have benefited from recent oil price escalations.
Asia is home to some four billion people, and thus has a well established tradition in agriculture. High productivity in agriculture, especially of rice, allows high population density of many countries such as Bangladesh, Pakistan, southern China, Cambodia, India, and Vietnam. Agriculture constitutes a high portion of land usage in warm and humid areas of Asia.
Many hillsides are farmed in a terrace method to boost arable land. The main agricultural products in Asia include rice and wheat. Opium is one of major cash crops in Central and Southeast Asia, particularly in Afghanistan, though its production is prohibited everywhere. Forestry is extensive throughout Asia except Southwest and Central Asia, with many of the items of furniture sold in the developed nations made out of Asian timber. Fishing is a major source of food, particularly in Japan.
The manufacturing sector in Asia has traditionally been strongest in the East region - particularly in China, Taiwan, Japan, South Korea and Singapore. The industry varies from manufacturing cheap low value goods such as toys to high-tech added value goods such as computers, CD players, Games consoles, mobile phones and cars. Major Asian manufacturing companies are mostly based in either South Korea or Japan. They include Samsung, Hyundai, LG, and Kia from South Korea, and Sony, Toyota, Toshiba, and Honda from Japan.
Many developed-nation firms from Europe, North America, Japan and South Korea have significant operations in the developing Asia to take advantage of the abundant supply of cheap labor. One of the major employers in manufacturing in Asia is the textile industry. Much of the world's supply of clothing and footwear now originates in Southeast Asia and South Asia, particularly in Vietnam, China, India, Thailand, Bangladesh, Pakistan, and Indonesia.
Asia has six important financial centers, located in Singapore, Hong Kong, Shanghai, Tokyo, Dubai, and Mumbai. India has been one of the greatest beneficiaries of the economic boom. The country has emerged as one of the world's largest exporters of software and other information technology related services. World class Indian software giants such as Infosys, Hindustan Computers Limited, Wipro, Mahindra Satyam and Tata Consultancy Services have emerged as the world's most sought after service providers.
Call centers are also becoming major employers in India and Philippines due to the availability of many English speakers. Here again India holds close to 60% of the trade share. The rise of the Business Process Outsourcing (BPO) industry has seen the rise of India and China as the other financial centers. Experts believe that the current center of financial activity is moving toward "Chindia" - a name used for jointly referring to China and India - with Shanghai and Mumbai becoming major financial hubs in their own right.
Other growing technological and financial hubs include Dhaka (Bangladesh), Chennai (India), New Delhi (India), Chittagong (Bangladesh), Pune (India), Bangalore (India), Hyderabad (India), Shenzhen (China), Kolkata (India), Jakarta (Indonesia), Kuala Lumpur (Malaysia), Karachi (Pakistan), Lahore (Pakistan), Metro Manila (Philippines), Cebu (Philippines) and Bangkok (Thailand).
- History of Asia
- Geography of Asia
- Commonwealth of Independent States
- World economy
- 1997 Asian financial crisis
- Economy of East Asia
- List of Asian and Pacific countries by GDP (nominal)
- List of Asian and Pacific countries by GDP (PPP)
- List of Asian and Pacific countries by GDP (nominal) per capita
- List of Asian and Pacific countries by GDP (PPP) per capita
- IMF WEO Oct. 2010 Retrieved on October 15, 2010
- Asian Millionaires Outnumber Those in North America, Report Says
- Professor M.D. Nalapat. Ensuring China's "Peaceful Rise". Accessed January 30, 2008.
- Dahlman, Carl J; Aubert, Jean-Eric. China and the Knowledge Economy: Seizing the 21st Century. WBI Development Studies. World Bank Publications. Accessed January 30, 2008.
- The Real Great Leap Forward. The Economist. Sept 30, 2004
- Chris Patten. Financial Times. Comment & Analysis: Why Europe is getting China so wrong. Accessed January 30, 2008.
- Murray L Weidenbaum (1 January 1996). The Bamboo Network: How Expatriate Chinese Entrepreneurs are Creating a New Economic Superpower in Asia. Martin Kessler Books, Free Press. pp. 4–8. ISBN 978-0-684-82289-1.
- World Bank China Office Research Working Paper No. 9 - China Through 2020: A Macroeconomic Scenario
- "Asia has the world's most billionaires: Survey". Retrieved March 11, 2013.
- International Monetary Fund, World Economic Outlook Database, April 2014: Nominal GDP list of countries.