2. Power shift:
“In the aftermath of the global financial crisis, there doesn’t seem to be anyone willing to challenge the assertion this will be the Asian century”. So writes Michael Wesley, the Executive Director of the Lowy Institute in the Sydney Morning Herald this past September. Barack Obama described it this way during a recent visit to Indonesia: “Asia is home to three of the world’s five largest economies…we cannot be shut out of these markets.”
3. Complex, interconnected, competitive landscape defined by regionalisation:
The difficulties for Australian companies operating in Asia are well documented. Poh Lee Tan who is the Asia-Pacific chairman of Baker McKenzie has pointed to the increasingly competitive landscape which makes life more complicated for establishing and developing business in the region. Our political processes often causes us to underestimate influence on the long term and overestimate in the short term. We live in an increasingly complex and interconnected world, which is being defined by a new era of regionalisation. An increasing interest in foreign ownership from the region of Australian businesses- an opportunity or threat?
4. China’s growth and transformation:
Much has been written about the speed and scale of China’s “Great Transformation” presenting it as “a 21st century gold rush”. We are struggling to comprehend its implications for us as a country. In the next 20 years, if China’s GDP grows at an annual rate of 7.7%, then by 2030 China’s economy will be at least four times the size it is today. The ties we are building with China, and the impact of China’s role on our position in the world, will affect all Australians in one way or another. As China grows, so Australia will grow too. Conversely, the risks of lower than anticipated growth are a higher severity. Gross Domestic Product slowed to 9.6% in Q3 from 10.3% in Q2 from 11.9% in Q1. Are the cracks beginning to show and what will the impact and legacy of the global financial crisis in Asia?
5. Regional hubs within the global economy:
What do we know about the fast emerging influence of countries like South Korea which boasts an important market in the global economy with strong trade ties across Asia? How will the Free Trade Agreement being negotiated between Australia and Korea influence future opportunities and challenges? What does this mean for the traditional hubs in places like Singapore and Hong Kong?
6. Regional instability:
Recent provocation from North Korea shows the potential for instability in North Asia. Is it possible to separate geopolitical issues from business and commerce decisions, noting the continuing influence and ramifications the catastrophic events of 9/11 had on global security and business? Instability in the Asia-Pacific region along with terrorism remains a highly significant and politically influenced risk for Australia in both of impact and probability.
Kevin Rudd when prime minister in May 2009 issued a stark warning to leaders across the Asia-Pacific: “act now to build better regional cooperation or risk conflict on the scale of that experienced by Europe last century”. He argued that managing power relations in the context of the rise of China and India would be “crucial for our collective future”. His warning that the region faces a choice to either “sit by and allow relations between states to be buffeted by economic and strategic shifts and shocks”… “or seek to build institutions to provide anchorage for stability able to withstand the strategic stresses and strains of the future”. Kevin Rudd’s warning possibly reflected his own bias toward his proposed Asia Pacific community initiative which was described as “dead in the water” by a senior Singaporean diplomat when first announced in June 2008.