Saturday 17 October, 17.30 until 18.45, Pit Theatre, Barbican Eye on the World
Until recently, the standard talk about the global economy was of a ‘two-speed rebound’ from the recession following the financial crash. The rapid recoveries experienced by the emerging economies were contrasted with the sluggish recoveries in the advanced economies of America, Europe and Japan.
More recently, however, the talk is of a great unraveling of the emerging markets story. The IMF set the tone earlier this year when it argued that trend growth rates in emerging-market economies are already in decline and are expected to fall further in the medium term. China’s decades of double-digit growth are now perceived as ancient history, with its growth rate is expected to fall from around eight per cent in 2013 to just above six per cent in 2016. More fundamentally, it is argued that East Asia is starting to hit the buffers of the ‘middle-income trap’, whereby developing countries often struggle to make the transition to self-sustaining economic growth based on rising productivity rather than cheap labour. On top of this, China may be fast approaching the point when its previously apparently inexhaustible supply of surplus rural labour dries up and industrial wages rise rapidly. Combined with an ageing and declining workforce, this is forecast to lead to slower growth, reduced investment and a loss of export competitiveness.
Nevertheless, others argue such concerns are overblown. Many East Asian economies have developed much broader bases of production than they had 30 years ago. Most have been able to build up large foreign-exchange reserves. The experiences of the original East Asian ‘Tigers’ – Singapore, Taiwan, Hong Kong and South Korea – seem to show the middle-income trap is not insuperable. Whatever economic stresses China is facing, it has confounded the sceptics many times before. China has already started to move away from a reliance on cheap labour, turning to research and development and innovation as the next drivers of productivity growth.
Did the world get too carried away with East Asia’s economic miracle? Was its economic rise a simple case of catch-up and favourable demographics? Is this stage over? Has the forecast rebalancing of the world from West to East also been exaggerated? Or is it the case that as wages rise, particularly as it produces ever more sophisticated and higher-value goods, this will provide the market to drive regional economic growth into the future?
journalist and author, Ferraris for All: in defence of economic progress and Cowardly Capitalism
professor of international politics, University of Warwick; associate fellow, Chatham House Asia Programme, Royal Institute of International Affairs
author, All Under Heaven: China’s Dreams of Order; speaker; adviser
Professor Alan Hudson
director of leadership and public policy programmes, University of Oxford; visiting professor, Shanghai Jiaotong University
management consultant, Across Associates Consultants; lecturer, Mejiro University
science and technology director, Academy of Ideas; convenor, IoI Economy Forum
Prime Minister Shinzo Abe this week passed the 1,000th day of his second tenure as prime minister, which began in December 2012. On Thursday, he officially began a new three-year term as president of the ruling Liberal Democratic Party.Wall Street Journal, 24 September 2015
The stabilisation of Japan’s stock market since 2012 is built on more secure foundations than these worries might suggest.Tom Stevenson, Telegraph, 12 September 2015
Despite China’s recent troubles, the prospects for its entrepreneurial private sector remain bright.Vijay Vaitheeswaran, Economist, 12 September 2015
The country is now going through a crisis of transition, unparalleled since Deng Xiaoping.George Magnus, FT, 21 August 2015
For all the talk of a possible bubble in US technology stocks, the rise in the Nasdaq over the past year is dwarfed by the surge in the Shanghai and Shenzen stockmarket indices.Daniel Ben-Ami, Fundweb, 29 July 2015
This book traces the impact of the global financial crisis on East Asia, and the way that key regional states responded to the crisis.
Shaun Breslin (ed), Routledge, 27 April 2015
Contrary to Smith’s assertion, a cursory revision of the titanic economic growth of the late 20th century developers, namely Japan, South Korea, and Taiwan, clearly reveals that economic growth in those countries has been due to anything but non-state intervention.Masoud Movahed, Harvard International Review, 26 October 2014
We should celebrate the spread of wealth and modernity in the developing world, while recognising that a great shift in global power is not imminent.Stuart Simpson, spiked, 21 February 2008
follow the Academy of Ideas
Keep up to date with Academy of Ideas news and events by joining our mailing list.