asia-post_v02-01

In the quarter-century up to 2013, the six Asian nations now in the G20 saw their share of world GDP grow from 20% to 31%.

Over the same period, the G20’s four European Union countries saw their share fall from 20% to 12.7%.

By the region’s own standards, last year was not good for economic growth in emerging East Asia – GDP expanded by only around 7%. Yet the region accounted for 40% of all world GDP growth. That was while the euro-zone economy was contracting by 0.4%.

From 2000 to 2011, China’s share of world R&D expenditure leapt from 3.9% to 15.3%. Spending on research and development by EU member states dropped from 26.6% to 22.9%.

There’s a seemingly endless supply of such statistics indicating that when EU and Asian leaders meet in October for the ASEM summit in Milan it will be clear which side is on the economic ascendency.

Is Asia’s rise a threat or an opportunity for Europe? Has the crisis pushed Europe into irreversible decline? Or can Europe bounce back to take advantage of a trade relationship with Asia that’s at €1.37 trillion and growing?

Earlier this month, our partner think-tank, Friends of Europe, held their Asia Programme conference, gathering high-level speakers from Europe and Asia for talks on the future of the relationship. We took contributors’ questions to some of the experts and policy makers attending.

Aleksander asked if the European economic crisis weakened the EU’s position in the eyes of Asian powers? We put his question to Marina Durano, Assistant Professor of Economics at the University of the Philippines-Diliman. This is her reply:

Writing in from Spain, Nacho thinks that the fast-growing Asian economies represent the future, whilst Europe is doomed to become an economically-backward tourist destination. Is he right to be so pessimistic? Here’s the view from Nay Aung, founder of Myanmar’s online travel agency Oway.com.mm:

Nikolaos from Greece is worried about high unemployment rates in Europe and believes Europe’s industrial base has shrunk because companies have moved their factories to low-income countries, including in Asia.This is the reply from David O’Sullivan, Chief Operating Officer at the European External Action Service:

What do you think? Is Europe condemned to lag behind new emerging powers in Asia and elsewhere? How can EU nations regain their competitive edge? Can Europe maintain its social model in a globalized world economy? Let us know your thoughts and comments in the form below, and we’ll take them to policy-makers and experts for their reactions.



67 comments Post a commentcomment


  1. avatar
    Paul X

    As long as Europe continues to shackle it’s businesses with protectionist legislation and Green policies that Asia does not have then yes…. nothing could be more obvious

    • avatar
      Paul Odtaa

      Germany is a country with very strong Green policies – which puts their industry years ahead of the competition. They are designing environmental products for twenty years ahead. As Asia becomes more affluent then the market for these type of products increases dramatically.

      Also Germany has recently tightened up their building regulations – new German houses and refurbished older houses will require 20-30% less energy – which will boost their economy by not needing to import energy and boosts the local economy by creating tens of thousands of jobs in the local economies.

      Protectionism – you try and sell something to China.

    • avatar
      Kroum G. Balabanov

      A part of Asia’s “competitiveness” can be easily attributed to currency manipulations (China & Japan), another part – to failure to cost properly resources used and yet another – to lack of labor rights (China) &even holidays, yet another – to forced savings due to lack of a credible pension system or healthcare insurance (China again, Japan & Korea for decades). Besides, Asia is not a monolith, Japan, Korea, Taiwan, HK-SAR & Singapore are advanced, knowledge based economies – they won’t grow fast for ever (actually Japan has only just recovered from two decades of stagnation). China & India are not in that league – they are basically efficiency based & they have a lot of catching up to do, though there are also signs that China is halfway across to the knowledg based ones too. The most competitive economies are thosefrom the North of Europe plus Switzerland, Korea, New Zealand & Singapore. I think Europe should follow rather the Scandinavian-German Model (Mitbestimmung Capitalism) yet based on UK style flexible labor markets & friendly business environment. Absolute Cost advantage competitiveness does not matter as much in the area of innovation. In manufacturing, where we decide to keep it, we may be still competeitive, because German of French or Belgian workers have the highest labor productivity. In other areas, it would suffice for the European industries to be relatively cost competitive, in comparison to other goods or industries.

    • avatar
      Paul X

      The fact of the matter is products from China are cheap, no-one can deny that…and if you visit China you will find out why, go to the industrial areas and you cannot step outside the door without coughing on pollution.Their businesses do not have the same costly regulation that ours do, add to that copious amounts of cheap labour and no way can we compete with them on price

      As for innovation, my company makes quite a specialist product and we are one of the top names in the business, but look on Ali-baba and you can find identical looking (even using our name) products for sale at a fraction of the price, made in China. We have obtained one of these benchmarked it and it is crap for build quality and performance, but the Chinese don’t care as long as it works, and they sell 10’s of thousands to their own internal market

      This is why we cannot compete with China and why we struggle to break into their market and it doesn’t look like anything is going to change in the near future

    • avatar
      crayven

      As long as Europe continues to shackle it’s businesses with FREE TRADE legislation and non-green policies.
      IF “Asia does not have them” then Asian DOES NOT GET TO EXPORT HERE!

      Any…bloody…questions, “asia” ?
      Of course a country of SLAVES works cheaper than HUMAN BEINGS !

      Impose on China OUR standards if they want to export here.
      I am SICK AND TIRED of buying “made in China”, i want Made in the EU”.
      If the capitalist bastards won’t do it out of kindness….then we must FORCE them to do it !

  2. avatar
    Nico Selleslags

    Don’t interfear with the nation state’s in europa for starters! The diversity and competition between them are the key to development in europe.

  3. avatar
    Perttu Saraniva

    European economy is not so competitive as in Asia. Asian make products with cheaper costs. What Europe can do is to invest on reforming education. Big difference of educational qualities in different countries. Challenges for employees to work in different countries, need of language skills and recognition of diplomas. University diplomas might recognized in different country, but how about vocational education?

  4. avatar
    Nadezhda Ogden

    Bring the manufacturing back to EU. It will create jobs , boost the economy , decrease economic dependencies from Asia.
    It is the greedy commercial giants that are draining the eu economy, the end customer would pay the ssme price for a product if it was made in eu. The low cost Asian labour payd for managers ridiculous bonuses.

    • avatar
      crayven

      THIS !
      +1 ( if there was such a thing on this site )

  5. avatar
    Mirko Celii

    Stop thinking that “the more you export, the better”, every nation has to think on its own, to goal has to be to maximize internal production, to export only the exceeding goods and to import the ones you cannot produce. That’s it

  6. avatar
    Abbymerey

    The thing is, you can never stop ASIA’S success, all you can do is try to strive the way they are striving. It’s a common sense that we coined the term “developing countries”, there will come a time that they will finally be called “developed” too and those already achieved this title should be aware that good maintenance is necessary, good policy, and good governance is a must. You can view others success as an opportunity rather than a threat. So EU, take advantage and it’s time to review your unrealistic policies. We all have big thinking brains, but sometimes you have to address issues as simple and doable as it can be.

  7. avatar
    Stefanescu Dan

    am rezolvat : China -?i reduce excedentul comercial (nu are ce s? mai fac? cu banii) ,evident import?m mai pu?in de la ei ?i export?m mai mult ( din teza de Dr.Jonascou -macrostabilitate pe terra) ! Pot s? o scriu direct la Bruxelles Mr.J.C.Junker?

  8. avatar
    Fran SP

    I hope so. Ilimitated groth in a limitated planet (sources) is sure disaster.

  9. avatar
    Nikolaos Sotirelis

    What you forgot to say, is that nearly all of the companies that activate in China, are Western interests and plenty of them European!
    You’ve allowed the transportation of productivity to Asia and transform Europe to a consuming continent, with the exception of the German production! (???)
    All you’ve got to do, is to force enterprises to return and to overtax Asian products! To share equivalently the production all over Europe and to accomplish the economic integration!

    • avatar
      crayven

      Yes, yes, YES !
      This, right here.
      Impose EU standards on Asia:
      -workers rights, fair wages, vacation with pay, pensions.
      And you’ll see THEIR costs go up and become less competitive.

      We not only ‘can’t” but we DON’T WANT and SHOULDN’T have to compete with SLAVE WAGES !

  10. avatar
    Stefania Portici

    competitiveness’ competitiveness … ‘, always competitiveness’. This competiticvita ‘that crushes dirirtti social. When the rights and social justice? So we want this and we would like to achieve

    • avatar
      Tarquin Farquhar

      @Crayven
      DREAM ON!

      The EU, sorry I mean the Blood Brothers (France and Germany) tried to impose sanctions on China regarding solar panels last year. In the end, China won!

      China, ASEAN and Greater India are each too big for the EU to ‘impose’ standards on. Perhaps the TTIP is the first step towards an Anglo-Saxon bloc that can properly challenge the new 21st century Asian monoliths?

    • avatar
      proactive

      @David……your boldness unlocks a smile! Try, test & label yourself with the more noble & honest word “Anti EU David” & see if our EU watchmen block your blogs for running an “anti EU” campaign? Just for the fun of it!

  11. avatar
    Jaume Roqueta

    we could end sendig weapons to Israel… is this the kind of economic development… we are rulled by mureders and bastards!. go to hell europe… shame on humans

    • avatar
      Tarquin Farquhar

      @Giacomo Pastorella
      LOL!

    • avatar
      Marcel

      Has it ever even occurred to any of these politicians that economies cannot grow forever? Yes that is correct, in real terms GDP growth cannot last forever.

      In fact, I’m willing to go as far to say that not only is the financial economic system of the western world unsustainable, but it never has been sustainable. The western financial economic system has always been predicated on perpetual economic growth (impossible) fuelled by perpetual population growth (impossible) and perpetually expanding debt (unsustainable).

      I’m arrogant enough to declare that most of what people learned from economy books from the 50s-60s-70s can be thrown in the trash can without further consideration. We’ve lived in the era of population growth, and that is about to end this century, if estimates are correct.

      Take the example of Japan, its population isn’t growing, and yet for some reason analysts and economist seem totally baffled that Japan’s economy isn’t growing. Well of course it isn’t, no population growth = no real terms GDP growth.

      But who’s willing to vote for what is needed to fix the mismatch between a system based on perpetual growth and a system that would actually sustainable? Not many, I can tell you.

      No, the rest of the world wants its share and will no longer agree to live in disproportional poverty so the western world can live in disproportional wealth. I am convinced a paradigm shift is happening and economic power is slowly slipping away from the western world, and this process is to a large degree not reversible.

      So, what prospects does Europe have, even if you were to imagine it without the EU? Not a whole lot, I would say. An ageing population (mostly barely growing), virtually no resources (when compared to the rest of the world) and a widely spread sense of entitlement. We simply got used to being able to enjoy the resources of other parts of the world. And guess what, increasingly they’re gonna use them themselves.

      France of course tries to stem the tide by tying its former colonies in economic-monetary deals that benefit France and the local elites in those colonies, but are for all intents and purposes designed to keep the former French colonies disproportionately poor so France can be disproportionately rich. Amongst the French elites, post-empire syndrome is alive and well. And France isn’t the only one doing this, however it is the most blatant example. Or did anyone seriously think France intervened in Mali and Central African Republic out of humanitarian concerns? It’s resources!

      And the flood of ‘refugees’ is only going to increase, more and more people wanting a part of the limited pie, meaning of course that for most people, their share is going to decrease.

  12. avatar
    Paul Odtaa

    Europe can’t compete on growth for the following reasons:

    1) Asian wages are a fraction of European wages.
    2) Regulation is virtually non-existent.
    3) The average Asian is much poorer therefore as their living standards improve they will grow much faster.
    4) Asia has a lot more people.

    As the average person in China or India’s life style improves they will demand more and buy more. This builds their internal economies.

    It is cheaper to set up a factory and therefore high volume products are much cheaper to make – even where transport costs and time are taken into account.

    Is this bad for Europe or not?

    I think it is good for the following reasons:

    1) There is a rapidly growing market for European goods and services throughout Asia.
    2) Germany in particular shows that even with very expensive start up costs and labour they can produce sophisticated industrial products for the rest of the world.
    3) Europe has some of the world’s leading knowledge based and research based industries – which means Europe should be working on more co-operation between states, more support for education and development of products from ideas.
    4) In my opinion European way of life with a good Work/Life balance would be most attractive to the majority of people in the world.

    Yes the GDP of Europe as a percentage of world GDP will get smaller as China and India and others expand their economies.

    But if we sort out the current economic mess – which is happening – very slowly I admit. Get people into sustainable jobs, focus on what we do best then Europe will be a great place to live.

    • avatar
      Tarquin Farquhar

      @Paul Odtaa
      1) Agreed.
      2) Agreed.
      3) Hmmm, Northern EU yes – the rest no.
      4) The Anglo-Saxon countries rate higher.

      The EU is too small both geographically and demographically for it to be a success – it will need to join another bloc if it is to have any influence in the world of the ‘blocs’ eg AU, ASEAN, China, Greater India etc etc

    • avatar
      Marcel

      1. Europe hardly makes anything, and services will be done locally
      2. only in a very limited number of products such as cars
      3. not really, for example for us there is little purpose in cooperating with Greece
      4. this way of life cannot be exported to the rest of the world because the resources simply don’t exist

  13. avatar
    Rudi Spoljarec

    Asian development is not the treat to Europe , it has allready ruined economies of those who were not prepared. Specially south european countries . Asians work more than us, and we want only to buy from them ,increase the price and earn high profit . We have to bring back home all the production , as it was on the level of 1990.

    • avatar
      crayven

      UKIP parrot?

    • avatar
      Tarquin Farquhar

      @Crayven
      Do you get paid by the EU/EC/EP to post on this forum or do you work for the EU/EC/EP in any way, shape, form or capacity by any chance?

    • avatar
      crayven

      THIS COMMENT HAS BEEN REMOVED BY MODERATORS FOR BREACHING OUR CODE OF CONDUCT. REPLIES MAY ALSO BE REMOVED.

  14. avatar
    ironworker

    Research – results – new technologies – revolutionary products – marketing – sales – money – Research.
    Or, keep giving a “face lift” to any “new” made in Europe product and see if Asia can be beaten…at their game. I doubt.

  15. avatar
    Michalis Pillos

    1. A true EU Federation
    2. Educational Infrastructure with a Focus on Innovation & social coherence
    3. Strategic Planning of states by core competences
    4. Enjoy progress in 20 years or so…

    • avatar
      Tarquin Farquhar

      @Michalis Pillos
      1. LOL!

      2. Hmmm, on the lines of the ‘Hitler Youth’ perhaps?

      3. Corruption, bribery, misfeasance and malfeasance should NOT be core competences.

      4. Wow! 20 year plans!! Even the Chinese only have 5-year plans.

    • avatar
      crayven

      THIS COMMENT HAS BEEN REMOVED BY MODERATORS FOR BREACHING OUR CODE OF CONDUCT. REPLIES MAY ALSO BE REMOVED.

  16. avatar
    Tarquin Farquhar

    @DEBATINGEUROPE
    There are only 4 EU member nations in the G20 – Germany, UK, France and Italy.

    • avatar
      Debating Europe

      @Tarquin

      You’re absolutely right – we have changed this now.

  17. avatar
    catherine benning

    First, we should include Australasia and be looking into what is going on in there as we are tied into them tightly. The significance of this move to blindfold their people and the world to the real force behind the banking thieves is more disturbing to Europe and its people than what China may or may not be up to.

    Read all about it and guess what is at the back of it.

    http://www.theguardian.com/world/2014/jul/30/wikileaks-australia-super-injunction-bribery-allegations

    Then you can hear all about it. Or, can we?

    http://www.youtube.com/watch?v=l8zyy9IlxGw

    • avatar
      catherine benning

      @ debating europe

      Why has this post above been held in moderation endlessly as it goes with the addendum that follows and is shown? Your action doesn’t make sense as it is important knowledge and makes no reference to anyone.

  18. avatar
    Nando Aidos

    So what? What is the problem of lower “economic development”?
    Why not develop “social capital”?
    Why not develop “sophisticated know how”?
    Why not develop “quality of life”?
    Why not produce all we need and thus reduce the dependency on foreign currency?
    … etc… etc… etc…
    I am not talking about “isolationism”. I am talking about being the best in what we (European countries) do best and forget about these “inflamation” (not information) statements by the so called “experts”.
    As someone recently told me – living in Europe is a privilege!
    Just look at all the world people trying to migrate to Europe!
    Doesnt that say something?

    • avatar
      Tarquin Farquhar

      @Nandos Aidos
      SOME of what you have said is laudable BUT would be a tad difficult to implement, at least at present.

      Unfortunately, in the 21st century power is GENERALLY exerted by economic means nowadays – this is the whole existential purpose of the EU.

      BTW, living in Europe is NOT a privilege it is an accident [or indeed incident] of nature for the BULK of its inhabitants.

  19. avatar
    proactive

    Doomed! Greed shifted the production base to Asia- EU will grow into a sanctuary of the barefoot & “do gooders”!

    Q: what was the original purpose of the EU?
    A: an economic and political partnership between trading members!

    The founding six countries signed the Treaty of Rome on 25 March 1957 in order to build a European Economic Community (EEC) based on a wider common market covering a whole range of goods and services.

    Q: Where is the EU today?
    A: In a mess & crisis! Deviated from its core- like an exploding cluster bomb!

    Just a viewpoint- from many others: the Konrad-Adenauer-Stiftung
    http://www.kas.de/brasilien/en/publications/35393/

    While the EU irritates & threatens many, counting beans & misleads its own citizens, ~50% of the globe’s population are busy structuring a different trading block- with the biggest resources on earth- in competition with an unequal partnership- the US/EU.

    EU Integration has gone too far & of track! Most politician need to go & search for their lost moral compass as well!

    I call for a total EU recall!

    • avatar
      Tarquin Farquhar

      @Proactive
      Agreed. The EU both demographically and geographically is TOO small to compete against China, ASEAN, Greater India or Latin America – it must join [as a junior partner] with the US to have any chance of influencing the world.

    • avatar
      proactive

      @Tarquin,
      Yebo! As long one can teach the Wall street gamblers a lesson they never forget!

    • avatar
      crayven

      THIS COMMENT HAS BEEN REMOVED BY MODERATORS FOR BREACHING OUR CODE OF CONDUCT. REPLIES MAY ALSO BE REMOVED.

    • avatar
      proactive

      The issue of a coming economic triumph of Asia/BRICS+ over the EU mislead Europe, is far removed from the dynastic triumph of the crown of Aragon over Spain!

      The feudal EU royals might already have a “Union of micro states” in mind- between all their principalities like Monaco, Luxembourg, Lichtenstein etc- and than compete who will house most of the richest, greatest gamblers, none working & non taxpaying people and greatest tax havens on earth? The ultimate paradise!

      In the end, it may even be cheaper than the ever growing army of equally self-serving, overpaid but only common politicians!

  20. avatar
    Marcel

    Has it even occurred to any of these politicians that economies cannot grow forever? Yes that is correct, in real terms GDP growth cannot last forever.

    I’m willing to go as far to say that not only is the financial economic system of the western world unsustainable, but it never has been sustainable. The western financial economic system has always been predicated on perpetual economic growth (impossible) fuelled by perpetual population growth (impossible) and perpetually expanding debt (unsustainable).

    I’m arrogant enough to declare that most of what people learned from economy books from the 50s-60s-70s can be thrown in the trash can without further consideration. We’ve lived in the era of population growth, and that is about to end this century, if estimates are correct.

    Take the example of Japan, its population isn’t growing, and yet for some reason analysts and economist seem totally baffled that Japan’s economy isn’t growing. Well of course it isn’t, no population growth = no real terms GDP growth.

    But who’s willing to vote for what is needed to fix the mismatch between a system based on perpetual growth and a system that would actually sustainable? Not many, I can tell you.

    No, the rest of the world wants its share and will no longer agree to live in disproportional poverty so the western world can live in disproportional wealth. I am convinced a paradigm shift is happening and economic power is slowly slipping away from the western world, and this process is to a large degree not reversible.

    So, what prospects does Europe have, even if you were to imagine it without the EU? Not a whole lot, I would say. An ageing population (mostly barely growing), virtually no resources (when compared to the rest of the world) and a widely spread sense of entitlement. We simply got used to being able to enjoy the resources of other parts of the world. And guess what, increasingly they’re gonna use them themselves.

    France of course tries to stem the tide by tying its former colonies in economic-monetary deals that benefit France and the local elites in those colonies, but are for all intents and purposes designed to keep the former French colonies disproportionately poor so France can be disproportionately rich. Amongst the French elites, post-empire syndrome is alive and well. And France isn’t the only one doing this, however it is the most blatant example. Or did anyone seriously think France intervened in Mali and Central African Republic out of humanitarian concerns? It’s resources!

    And the flood of ‘refugees’ is only going to increase, more and more people wanting a part of the limited pie, meaning of course that for most people, their share is going to decrease.

  21. avatar
    crayven

    Yes. Yes we are doomed.
    Because our leaders SIMPLY DON’T GET IT.
    ( I initially wrote an extensive explanation as to what can be done – realistically at this stage – but i feel i am wasting my breath.
    We are becoming that SHITHOLE called “America” where workers are driven to poverty and corporations dictate the rules our leaders enforce.

    GOOD JOB!

    • avatar
      Tarquin Farquhar

      @Crayven
      The EU threatened its own existence when it let in half of the Southern EU basket case nations.

      UNLESS same are updated, civilized, upgraded, uprated and ‘de-extremized’ the EU will never be able to compete with any of the LARGER trading blocs current or soon to be.

    • avatar
      crayven

      @Tarquin : I swear if i meet you on the street i’ll punch you out.
      1. Let’s not forget WHERE your “precious” northern EU exports its crap to, bastard!
      2. WE in the south gave you DEMOCRACY you slimy bastard, you got a lot of nerve telling us we need to be ‘civilized” when we fought invader after invader to keep your soft derriere away from speaking TURKISH now.
      The reason we can’t compete with bigger blocks is :
      a) lack of political INDEPENDENCE of our leaders in the EU to impose tariffs and taxes – the WTO be damned !
      b) morons like you, and that Paul X who do everything to sabotage the EU from within because “my little elf in my ear tells me poor people should die off and helping them is socialism, hurr durr”.

      THOSE are the problems. Not “the uncivilized south”.
      We aren’t the AMERICAN south, in fact some of us here are more “civilized” than you supposed northerners. You’re just more arrogant.

      If your economies would be in the deep and we would have bailed you out, you would be begging us to help you.
      Imstead of realizing it was sheer CHANCE your economies didn’t go under you ARROGANTLY display that smugness to all southern Europe. No wonder we can’t stand you!

    • avatar
      Tarquin Farquhar

      @Crayven
      I AGREE with you that the EU’s economic development is doomed UNLESS it can join with another larger trade bloc in order to wield SOME influence [at least] in the 21st century of mega-blocs.

      PS: Please refrain from making aggressive postings as you NOT only lower the IQ of the whole forum BUT you reinforce an oft-touted stereotype about civility [lack of], temperament [too much] and decency [non-extant] associated with a certain ‘type’ in the Club Med Axis.

      PPS: Please also stop making sexualised comments about my bottom – I am flattered BUT please lets just concentrate on the subject at hand and think about matters above the waist rather than below same.

  22. avatar
    crayven

    Greece, Italy and the “southern Europe” all PAY to sustain YOUR CROOKED BANKS.
    If we stop paying your banks and economies are DEAD.
    SO i’d keep my mouth SHUT if i were you.

    • avatar
      Paul X

      Do I detect a certain lack of “Joie de vivre” in your posts?

    • avatar
      Tarquin Farquhar

      @Crayven
      A Northern EU combined with the US could quite possibly succeed in an economic world of mega-trade-blocs to be dominated by the likes of China, Greater India, ASEAN etc

      Indeed, perhaps SOME of the Southern EU nations could quite possibly ‘combine for success’ [using metrics such as toilet paper, cutlery, pencils, loofahs, shoe polish, electricity etc] with countries of a similar ilk like Pakistan, Nigeria, North Korea, Iran, Iraq, Afghanistan, Niger, Somalia, Sudan and Outer Mongolia.

      Unless the Southern EU nations can raise their economic game, they should be kicked to the non-EU kerb.

    • avatar
      Marcel

      No one is forcing them to stay in. Why don’t they leave if they think it is so bad for them?

      I’ll tell you why, because they think that in the end, they can make others pick up the tab, then Germany can pay and they can live the high life again like during 2000-2008.

      Or maybe they’re too chicken to overthrow their governments, I for one do not understand why Greeks do not rise to overthrow the criminal Samaras junta.

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