The Asian Century: An opportunity for innovation over isolationism
In the words of Bob Dylan: The Times They Are A-Changin’. Last year delivered two historic changes in the West: Brexit and the election of President Trump. The implications for international tax, trade and immigration are great. But from the Asian perspective, it is doubtful that these changes are for the greater good.
This new era in Western politics coincides with the Asian Century, the region’s race for growth. By 2050 Asia is expected to be as wealthy as Europe on a per capita basis and the signs of progress are already evident. After all, it’s Asian companies that are going global and Asian companies that are increasingly featured on the Fortune 500 list. Take the 2016 list, for example: China alone offers over 100 companies, three of which rank among the top five.
From this position of strength, we see more foreign direct investment (FDI) by Chinese companies in the US. A recent report by the Rhodium Group, which examines FDI between China and the US, states that the volume of investment across industries has grown dramatically—on average more than 30% annually from 2011 to 2015. Yearly flows soared from less than $5 billion in 2011 to more than $15 billion in 2015—and are on track to double from that level in 2016. In 2015, Chinese FDI in the US exceeded US flows into China for the first time.