Well, ladies and gentlemen, a very warm welcome on behalf of the ifa Germany's oldest intermediary organization for international cultural relations. For our online talk today, Asian 21st century, this online talk is taking place within a series of totally glocal Stuttgart talks, Stuttgarter Weltgespräche. In this series, we discuss urging questions on the relationship between global and local. Focus is on successful examples of cooperation, distinct scope of action and social inovation. In times where more and more people feel, I would say helpless with the effect of globalization, transnational collaborations seems more important than ever. Today, we are talking about the Asian century. After this so-called European 19th century and the American 20th,
it's the 21st Asian? We will discuss which role Asia plays within the future world order. Where is Europe within global developments? Can growth in Asia lead to more global justice? Which contribution can country policy have to strengthen our relations at cultural understanding towards Asia? So, as you see, we have an exciting seventy-five minutes ahead in our talk, a lot of questions to be answered, ladies and gentlemen, once again welcome, and great to have you here with us today. For those who don't know me yet, my name is Corinna Egerer. I'm a professional presenter and moderator in business and politics topics. And I have the great pleasure to guide you through our short program today. Before we start, I do have just a few organizational details for
you at the event, as I said, it will last about seventy-five minutes, and we are recording this event. You can ask questions any time, and that's possible via the chat. And I do want to encourage you to do so, because we certainly want to make sure we answer the questions that you have. So use the chat button on the bottom of your monitor, and just type in whatever you want to feel, or you feel like want to know, and I'll try to pick up as many as I can during the talk. Well, let's get started. First of all, I'd like to give the word to Dr. Odila Triebel, she is head
of dialogue and research at the ifa. Dr. Triebel Thank you Corinna. Dear Parag Khanna, ladies and gentlemen, I warmly welcome you on behalf of ifa, the Institut für Auslandsbeziehungen to today's discussion of the topic, the Asian 21st century? Today, Asian countries occupied leading positions in the global economy, and are becoming ever more politically relevant. Global historians might add, they do it again. However, while geopolitical narratives between East and West shape our perspectives, the world is facing a variety of common challenges, such as global warming and the tackling of technology challenges in our daily lives. Especially in the financial and economic sector, our structures are
intertwined already, enabling close ties, but also vulnerabilities at the same time. Therefore multilateral cooperation at eye level in different sectors, such as economy, science, cultural heritage, arts should be achieved. And the first step for cooperation is, as we believe, dialogue, that is what we try to enforce. As an intermediary organization for cultural policy, ifa makes a contribution by representing a cultural concept that understands culture not as a haven of withdraw, but as a space of openness. Organizations, federations of States, such as the EU, national governments, as well as regions and cities are integral for shaping this coexistence. It is particularly important to include civil society in this process of political participation. And this is our intention to provide such an occasion in such a space here
today. With today's event, we cordially invite you to participate in the discussion about Asia's past, present, future, and its role in the world, with us together. We are delighted to welcome today Parag Khanna as our expert to this talk. In this, as mentioned, in the series called Total Lokal in German, translated totally glocally, die Stuttgarter Weltgespräche. I would also like to thank our team at ifa for organizing and coordinating today's event.
I wish us all a stimulating, exciting, and informative event, and give the floor now back to Ms. Egerer and I'm looking forward to your questions. Thank you very much. Thank you very much Odila Triebel. And yeah, I'm looking forward to an exciting talk and talking today to Parag Khanna. He's a leading global strategy advisor, political scientist and bestselling author, ladies and gentlemen. He's founder and managing partner of Future Map, a data and scenario-based strategy consulting firm, and he worked for the World Economic Forum in Geneva, and was advisor to the program Global Trends 2030 of the national intelligence council in the United States. I would say he is a true global citizen. He was born in India, grew up in the United Arab Emirates, Germany and the United States, studied in the UK and in the US, and during the past year has lived both in the US, and now in Singapore.
In addition, he has extensively traveled 150 countries, and I would say he loves the top. Not only that he has climbed numerous 20,000 plus peaks, foot plus peaks, he has also reached the top career wise. He was named one of Esquires 75 most influential people of the 21st century and frequently appears in the media world wide. You received the OECD future leaders prize, and was awarded young global leader of the World Economic Forum, and as fellow of the Robert Bosch Academy.
His book, "The Future is Asian: Commerce, conflict and culture in the 21st century", was just published in 2019. Welcome Parag and a pleasure, and an honor to have you here with us today. Welcome. Thank you. Thanks so much Corinna, pleasure to be with you. So, as for a procedure, before we start our talk, we will just do a small poll now, just to know who's with us. Ladies and gentlemen, you are asked now, you see on the window on your screen, a little poll. And after that, we will start our discussion, Parag and I. And as I said, I'll pick up the questions via the chat any time. So, you should see our poll right now. Yes, it is on the screen. And the question is, from which part of the world are you watching our
event right now? We're interested where you're based. Oh, that looks very European. Now, we're getting more to Asia, that's very interesting. And the second question is, which sector do you work in? So we're eager to see from which parts, not only of the world, but from which sectors you join us today, and look for the results that we will probably get. And// Well, let me... can I ask you a quiz question while they're answering the poll? Yes, sure.
Corinna, who coined the word glocal? Where does the word glocal come from? Who invented it? I frankly, I don't really know, it's being used everywhere. What's the answer? You can use it in German, we say Glokal, you say it in English, don't you? It's global and local, so// Does anyone else know from your team, anyone? No. We certainly know that we didn't invent it, but we came up with this for the series, because we do a lot, and we thought a lot about, and wrote about the intersection of both, and the interdependency of the 21st century living condition.
And so that's why I love this combination. It's a great word. It was one of two people, and I'm not sure which, but they were both political scientists, both recently passed away. One is Benjamin Barber, a political theorist who was very famous for his work on democratic theory, cosmopolitanism, or James Rosenau, who was an international relations theorist. They both used the word going back to the early 1990s, even the late 1980. And I was a huge admirer of both of them. I think it was more of Benjamin Barber, but//
I think so too/ for this text. All right. Well, interesting question. And now we have the results of our poll here. 86 percent come from Europe, and 14 percent come from Asia, none from the other continents. And we have 36 percent from NGOs and 29 percent from universities, then followed by government and think tank organizations. Well, thank you very much, ladies and gentlemen for that, very interesting. And once again, good to have you here with us. Parag, let's get into our discussion. As I said, the title of your book book is "The Future is Asian: Commerce, conflict and culture in the 21st century". So, this is a question back now, how you get to that topic actually?
Well, it's in a way very intuitive, I've been living in Asia for the last seven years or so. And this is probably the third book that was written entirely while living in Singapore. So I think that, you know, it's not the first time that I've been writing about Asia as a geopolitical entity or region, as the center of gravity in the world. In many ways that's what, you know, students or people roughly my age or younger, we've grown up already with Asia being a big part of the curriculum, in economics and in geopolitics. So what the reason though, why I wanted to write a book specifically on this topic, is because I felt, and this is of course the case with anyone who writes a book about something, you see the gaps, you see the weaknesses in the literature. So some obvious ones are that most books about Asia are basically about China. So that was a huge gap. People talk about Asia as if it's just China,
or China plus. And I thought to myself, well, there are about four and a half, or five billion people in Asia, only one point four billion of them are Chinese. What about the rest? Obviously having been born in India, that's more than just a passing interest. Yeah/ sorry. No, go ahead.
And the second big gap is that people have not treated Asia as a system. We talk about and write about Asia as if it's always being shaped by the United States, or in the colonial era by Europe, or in the framework of US led alliances by Japan and Australia. But we've never really tried to construct an inside out appreciation and understanding of the dynamics of the Asian system.
In international relations we use this word system, not just, in a very formal way, it has a very formal definition. And there's, quite frankly, never been a book about the Asian system, literally never. And a system again is where the units, the countries, the States, the empires have more intense relations with each other than with the rest of the world. Now, those,
it can be a violent system or a peaceful system, it doesn't matter. The definition of a system is not normative. It can/ you could have war constantly. Europe, the vast majority of European history is the history of a conflictual system. Europe has been a conflictual system for millennia. It's only been a peaceful system for the last couple of few decades. But it's been a system for centuries. Asia has not been a system because of colonialism, because of the cold war. It's been geographically continuous, but India had more to do with Britain, and Japan more to do with America, and Australia more with Europe. It didn't really have a gravity pulling itself
into each other, and that is now the case. For the first time in 500 years Asia is truly a system. So I wanted to also make that very, very concrete. So those are my two motivations. Very interesting. When you say a system, is that what you mean when you talk about a European and American or an Asian century? Or is that, is there more to a system? Well, I wanted to be clear that, even if Asia never influenced the rest of the world, there is still an Asian system. So it's worth discussing the Asian system, because Asia is the majority of the human population, and about half of the global economy. So Asia does not have to influence the rest of the world directly to be worthy of study, Asia is much of the world.
And I/ obviously from a Euro centric or Western centric standpoint, that's a bit of a shocking statement, right? Because I'm obviously saying that the Atlantic world, the Western Alliance, and sort of Western civilization, if you will, or the West taken as a cultural is not the center of the world. For Asia, Europe's the periphery, you are the periphery, America is the periphery. America is not the center, Europe/ so it might, might be quite stunning, for people to hear that. But it's also irrefutable facts. I mean, these are facts, right? It's not a debatable point that five billion people live in this greater Asian region, it's just a fact. Not a debatable point that half the world's GDP is here, that's a fact. So I wanted to, again, write that inside out. And the funny thing is that Asian Asians, people who are born and raised here,
in this region, don't write things like that, because they don't actually care to think about that rest of/ the fact that they have not written that is evidence that it's true, because they don't actually care about the rest. They don't actually spend much time caring what Europeans think about them, or what Americans think about them. So I think I came here as an American to write about the inside out Asian view, because Asians are too busy being Asians, and living in their Asian universe, which is the world really, as far as they are concerned.
And there's a historical point that I think is worth mentioning here, that's very much about Europe. If you remember the early centuries of global colonialism, or globe, the expansion of global trade in the 16th century, with the Portuguese and the Spanish empires, remember that geographically speaking, European kingdoms and monarchies are very, very small states. They were just, very remote provinces from a global standpoint, right. What made European micro States and kingdoms into global empires was, of course, to have a presence in Asia, and to make their trade hubs in Asia, and to establish colonies in Asia. So the reason that particularly Portugal and the Netherlands, and then Britain became global empires, is because they became Asian empires. Of course, North America comes in as well, but you
cannot be global unless you are Asian, right? You cannot pretend that you are globally influential, or globally significant as a company, or as a country, unless you have a real influence in Asia. So it's always been part, by always I mean, five, 600 years, if you're not relevant in Asia, you're not actually global. So I think that's an interesting glocal point. you are just local, unless you are a presence in Asia. But again, the reverse is not true. Asians don't have to dominate South America to be global, because to be very blunt, South America, or Africa, are not as important as Asia, right? Asia again is where the center of the world population and the economy is. So I'm not trying to disparage any region. I'm trying to quantify what we mean when we say global or influential. So it's a very interesting turning of the tables,
and I don't do it to be rhetorical because that's not my job. I'm not a politician, I'm an analyst. And I'm analyzing, why Asia is the way it is, what it has meant historically and what it means today. And yes, to some extent, maybe I'm reflecting how Asians view the world. And I may even
dangerously be giving them some ideas about the confidence that they could have, or should have about their role in the world. But in a way, this is the way it already is. One thing I'm asking myself when you use a term like the Asian century, and before that the European or the American century, is there something like a transition point, or a starting and finishing points? One gets started, the other is over, where do you see that? It's a great, great question. So, I/ there's two answers. The first is that there is definitely no formal, if you will, turning point in this/ I mean, sort of yes and no. The thing is that everyone would set it differently. And for me, I try to amalgamate and kind of think about transitionary periods, rather than points. Some would say that it's much easier to identify the point at which America became the dominant global power, it's the end of World War II, and it's the Suez Crisis of 1956. So you have a two
decade period where clearly great Britain's role was shrunk immensely, and America's role became completely, globally dominant. By the end of World War II, the United States represented 50 percent of global GDP. So there you can identify a very narrow period. When it comes to Asia, I like to think of it definitely/ again, starting points and momentum generating and so forth, obviously the rise of Japan. Japan by 1975 was already the world's second largest economy, and as you probably remember, Americans used to fear Japan as their great rival, not as a military one, just as an economic one. So by the 1970s, you already had rising sun, Asia rising.
And that was before China, right? China at that point was still a completely feudal, agrarian, province and politically, not only communist, but utterly Maoist authoritarian. And then in the late 1970s, you had a major China transition. So you had Japan, the tiger economies, like South Korea, the China's rise, and all of that was before the end of the Cold War. But just because Asian States were becoming important, it doesn't mean that it was the Asian century. But the question you rightly ask is, what about the actual anchoring of the global system around Asia? And I would say that certainly the beginning of the process would be the collapse of the Soviet Union, because without the collapse of the Soviet Union, Asian/ and the end of the Cold War, Asian countries could not focus more on their internal relations and their external relations. So the
building of the Asian system definitely really kind of begins with the end of the Cold War. But in terms of becoming an obvious day-to-day fact, you might say it was in the last ten years, when China surpassed the United States as the world's largest economy in PPP terms, when you had the announcement of the Belt and Road Initiative and the creation of the Asian infrastructure investment bank, when the internal trade within Asia surpassed Asia's trade with the rest of the world, that was also 2014, 2015. All of these things happened in between 2014 and 2016, some of these very significant milestones. And that's actually just when I started writing this book.
But again, the term Asian century is, actually dates back to the 18th century, with Napoleon talking about China. And even in the late 19th century, there were forecasts about what the Asian century might look like and who would lead it. But I will differentiate myself very clearly from those people, because I never say that the rise of Asia means the decline of the West, ever. Okay.
I have said that the West is not the center of the world, I have not said that the West is not important. As far as I'm concerned, the world is multipolar. When you look at the structure of power economically and its economic foundations, which is by far the most important component of power, the world is clearly multipolar. It's an American, European and Asian world, roughly equal, with Asia a little bit heavier, but obviously with a lot more people, but the world will remain multipolar for a long time. So the difference between the transition from a European world to an American world, or an American world to an Asian world, is that Asia is not destroying the West, it's not superseding the West, it's not eliminating the West, it's not conquering the West. None of those things are happening. And I liken it to just an additional layer of paint. The world, the entire planet earth has a European
layer of paint, a coating of European paint. We have sovereignty, we have democracy, we have modern political institutions, we have our borders, everything about the organization of the planet is European, in so many ways, and it has not gone away. And we have an American layer, from the American military, to the English language, the structure of capitalism and international financial networks. That's the American layer of paint. And now you have Asian layers
of paint. You have Chinese and Japanese and Indian people, and trade, and supply chains and there are other kinds of cultural and influence, all over the world. So one doesn't replace the other. And I think that's the beauty of looking at these issues from a cultural standpoint, rather than assuming that the world, that world history is a zero sum competition amongst large blocks, because that's not true of Asian history, and it's not true of global history. So it is getting eventually more diverse, if I understand you correctly. Absolutely.
Let's take a minute and look at the commercial aspects of the Asian, system, or century. As I would say, we do have a couple of questions already coming in on the RCEP, on the economic partnership that's just been launched, but let's stick to that later. Why has Asia really become so powerful economically within the last years? What is the reason there and which are the most important sectors that you would define? Well, those are are very good questions. With all stories of economic growth, it's
a/ there's multiple factors and drivers. Obviously there's demographics, the population of multiple Asian countries has tripled or quadrupled since 1945. So you have, again, the largest concentration of people in the world, and that's not only true today. It's been true obviously for centuries. But so then the other part of the story is infrastructure, investment,
economic reforms, investment in human capital and education, connectivity across these countries and their growing trade, their connection to global supply chains, empowerment of women. To be honest, economic history is a long laundry list of the things that you can do correctly. Not to mention technological inputs, obviously. And Asia is one by one, country by country, doing all of those things, following that playbook. In many ways, it's not necessarily special as a story, but it's larger and it's faster, because part of the process of history is that knowledge diffuses faster, and technology diffuses faster, and countries can learn from the experience of others faster, and global supply chains and technology transfer and investment make all of this happen faster. So that's why Asia has risen so incredibly, breathtakingly,
quickly. Now in terms of key sectors, quite frankly, the answer is absolutely everything. And there's a big difference between invention and innovation. And a lot of people like to say that Asians don't innovate, or rather they don't invent, they just copy. But I think anyone who
knows Asia knows that's not true. If you look at a scientific advancement, in a wide range of areas, whether it's medical sciences, cancer treatments and, or obviously artificial intelligence in China and so forth, there is a great many areas where Asians both invent and innovate. There is no question that this is the most innovative region in the world by far. It's not even a contest. And
again, innovation does not mean you invented something, innovation means you apply it. You apply it in a novel way to your own context, to your market, to your society, to your economy. So for all of the things that we take for granted, or wish we could in day to day life, the phone that you use, who has the fastest phones or the best cameras, right? It's Asians. Who has the super apps where you can do cashless payments for anything, QR codes to scan anything, all of your/ anything that you need for data, to show, everything. Bandwidth speeds, internet speed, everything is better in Asia, right? And it's much better in China than it is in America, or in the United States. I mean, leaps and bounds better, because they wrote their regulations from scratch.
They were consumer friendly, and industry friendly. They are not data privacy friendly, obviously. They're very uneuropean in that sense, but in terms of innovation that empowers consumers and citizens, there's no question that Asia is five to ten years ahead of the rest of the earth, even in areas that were innovated or invented in America. E-commerce, sure Amazon's great, but Ali-Baba is way faster. And in terms of payment platform and so forth, it's just
leaps and bounds better. So again, the innovation there/ this is, again, not something that we can debate. With the facts on the table, the scale has massively tilted towards Asia, that's just an objective fact. And the room for improvement though is significant in terms of just scale, right? Let's remember that if Asia were a country, or even Southeast Asia, this region where I live of 700 million people, if it were a country, it would be by far the most unequal country in the world. There's billions of people who are still poor in Asia, billions, especially in India, and in parts of Southeast Asia. But that's part of why you know that Asia will still grow a lot, because these governments are investing the most in infrastructure and connectivity, and internet access, and mobile finance, and rural electrification and all of these things.
Asian countries, even the poorest countries are trying very hard to do these things in public policy, and public finance, and social policy. So I'm optimistic that even though they have such high inequality, they're making big efforts to reduce poverty. What's a typical Asian strength that you would define there? When you say everything's so much faster, how come? In economics you would call it the advantage of late development. Again, these things were not invented in Asia. The internet was not invented in Asia. The mobile phone was not invented in Asia. The automobile was not invented in Asia. Electric cars were not invented in Asia. But
all of these things are here now, in larger number, bigger markets, more state support, obviously that's one big factor. Again, writing the more effective regulations, less legacy, it's all of those/ we call it political economy. All of these political economy factors have come together to allow countries to do these things in a strategic way. So strategic
national modernization is not an accidents, that's the whole point. It's strategic, it's premeditated, it's done according to a master plan, a design. Japan knows ten years in advance where they're going to build the next high speed rail lines, so does China, and they get it done. Now again, we're not, we haven't yet talked about obviously the political issues, democracy rights and freedom, all of these things come at a cost.
But just remember that Asians have made their own decisions, they're not having the debate that you or I may have now, or that Europeans have. I've spent a lot of time in Germany, and I'm debating with Germans and German politicians regularly, and they still carry this bias, that unless Asia does things the way we do things or have done things, it must fail, because it's not morally correct according to our view. But you need to understand, again, I say this as someone/ I can put on a German hat, I can put on an American hat, I can understand your point of view, but you, not you personally, but this crowd of people in Europe or in America, in Berlin or Washington, don't seem to be able to understand that point of view, which is that we have way more people than you. We have ten times more people than you. Innovation and modernization development will not happen by accident with five billion people. Silicon valley will not happen by
accident. Food will not get on people's tables by accident. This is a crowded and layered, and very heavily divided, and fragmented and poor, or has been, part of the world. So you really do have to understand the way these people are thinking about it. They all understand how you understand the world, because a lot of them were educated in Europe. They were shaped by European colonialism,
by American dominance, every Asian understands how Westerners think, but the reverse is not true. There's a distinction, I'm not contradicting myself earlier. Earlier I said, Asians don't care what you think, but I never said they don't understand what you think. They perfectly well understand. Asia is a large set of post-colonial countries. They were dominated by Europe for centuries. Asians understand perfectly well what the European
worldview is, what the American world view is. It is completely inevitable in any part of the planet to know what Europe has done and what America has done, but the reverse is not true. And I've come here to understand the reverse, and to reflect that reverse view. Yeah, global citizen, as I said. Yeah. Well, very interesting. Let's look at Asia, or the parts of Asia a little bit. As you said in the beginning, it's not only China, it's not only India. So what about the, when we refer to Asia, we often mean just simply China, or a little bit
more. So what are the big regions that you would talk about one hand, and then what we also, and I'm just adding this, have an interesting question from someone from our audience saying, that the middle powers in Asia, would they have to choose sides? Is it not a century of alliance that's ahead of us, that they was choose sides, either the US way or the Chinese way? Like a bipolar thing. Right. So again, that's a very, it's a very common view that Asia middle powers, or swing States, especially here in Southeast Asia, have to choose sides, and make an alliance, or be part of an alliance. Again, that's not at all true. In Asian history there are almost, almost no alliances.
Asians don't think of themselves as having to form rigid alliances and do balance of power against each other. Yes, such dynamics exist, but not in the framework of institutionalized alliances, like NATO and so forth. Because that's not how Asians view their relationships with each other. They are always practicing what we call hedging. They're saying, I don't know, who's going to win in this dispute between China and Japan, or China and Korea, or Japan and Korea, or China and India, but I'll just be friends with all of them, and whoever wins, I'll stay friends with them. That's the way Asians operate. If they have to team up to defeat a hegemonic, like of course, in the case of
World War II, where Asian powers had to resist Japanese imperialism, and that required China, and the support of the United States, and Korea and Southeast Asian governments to reject Japanese imperialism, that wasn't a case of alliances. That was anti Imperial resistance. So, Asian countries today do not use the language of, "We have to choose sides, which side shall we choose?". That is the way that people in the West, and scholars, and analysts, and diplomats in the West talk about the way they think the dynamics will be, because they think that there is a US-China global Cold War, the world is becoming bipolar again, and therefore like the last Cold War, each country must choose a side between the two. But we are not in a new global cold war, there is not a new bipolarity between the US and China. The world is not being carved up into two
rival camps, and therefore Asians do not believe that each of them must choose a side. They correctly view the world as, again, much more layered and interdependent. They get investment from Japan and they trade with China, and they have military relations with America, and they're constantly shifting these patterns and teams and doing business in all directions. They are actually creating a situation where China and America and India and Japan and Europe are all bidding to have more influence in their countries, like in Thailand, or the Philippines, or Indonesia. So they are not choosing sides, they will not choose sides. No one is asking and no one is pretending that they must. I mean, sometimes some American officials may come here
and say, "We want you to be on our side". And the next day some Chinese officials may arrive and say, "We would like you to be on our side". But pretty much every Asian country that has some sovereignty, like Thailand, or Indonesia, or Philippines, certainly Vietnam, India, none of these countries actually pick a side. So the fundamental lesson, just to draw it to a punchline so everyone can remember, Asia will never choose sides. So, I hope that everyone can simply remember this one sentence, Asia will never choose sides. Asians do not choose sides.
You cannot tell Asians that the rules of the game are that they must choose sides, because actually they are the ones making the rules of the game, which is that they will not choose sides. You really have to understand the way it works from the inside, because what I'm saying represents the perspective of three plus billion people, right? And that's the way India operates, that's the way Indonesia operates, that's the way the big countries are operating. And they have found ways to resist China and to resist America. So the truth is that the, the point of view that says we will not choose sides is winning, therefore it's worth your time to understand why that is true. Before we move on to the RCEP, I just want to understand one more thing or ask you one thing that is, when you said, actually Europe invented a lot of things, and then the Asians came and innovated on top of that. Cars came from here and then//
Don't forget the American chapter in between. Yeah. But my question goes to Europe. Where do you see Europe's future role economy-wise, in that respect? Well, so Europe as an economic region unto itself, I am more positive about it than most people, certainly way more than Americans, than most Americans, because Americans are very dismissive of Europe as a geopolitical actor, and they view it as sort of rife with staces, and having bloated States and heavily indebted welfare systems and so on. My view is that Europe is governed by principles of parliamentary democracy and social solidarity, and I view those as very virtuous things. And I think that, even with the pandemic being as
bad as it is, the public support has been far stronger than in most other parts of the world, and certainly of course way more than the United States. So I'm certainly a believer in Europe, and I believe that Europe learns from crisis, and the patterns of modern history show that, in terms of taking this opportunity to evolve from the monetary union towards a fiscal union, the sorts of the large bailouts, socializing European debt, launching more sovereign Euro bonds, making a stronger push for the Euro to be a reserve currency, this two trillion dollar budget over the next five, seven years. I think these are all examples of Europe acting in a cohesive, future oriented and humane way. And I think/ so I'm a believer in Europe, and I'm also a believer that Europe will have a growing role in Asia, and a far more important one than the US. Because after all Europe and Asia actually share this mega continent of Eurasia, Europeans have a long history here. There's obviously a very large number of Europeans who live here. European trade with Asia is much larger than European trade with America. And that's one of
the central infographics and charts in the book shows how, Europeans may not even realize this, but European trade with America and Canada together is about one trillion dollars a year, which is a decent amount. But European trade with Asia is about one point six trillion dollars a year. So your economic future is far more pinned to Asia, than it is to North America. And certainly because you're exporting more, and European economies, especially Germany are export oriented/ of course you have a large population and so forth, but you have a high savings rate and relatively low consumption. So trade with Asia matters a lot to Germany and to Europe. And so that's why European governments, since again, this period of time that I mark as one of the key milestones of the Asian sort of century, in the mid 2000 tens, European governments started to join the Belt and Road Initiative, and the Asian infrastructure investment bank, and pushed very hard for more trade deals. Europe has a free trade agreement with Japan now, with Korea, with Vietnam, would like to have one with ASEAN, the Southeast Asian countries. And the Americans have obviously taken a very different approach. They've pulled out of the
major trade agreements, like the Transpacific partnership and so on. So Europe really does have the right strategy towards Asia. And so I'm quite bullish about that in the long long-term. Partnerships. That brings me through the regional comprehensive economic partnership, that's just been signed by 14 Asia Pacific States. So it seemed, that, well it is a very important that agreement of course, but someone wants to know, is it not overrated, according to some reason comments comparing the EU Asian trade deals with Asia? Well, so the regional comprehensive economic partnership, even though it's not a hundred percent free trade, it's not like the European Union or rather the Eurozone, but it's relatively close. The key innovation is used/ since tariffs were
already getting lower between Asian countries, the key is around some of these technical issues, like rules of origin, where now you make one thing in multiple places within Asia, you don't have to have disputes about labeling and so forth. So some of these things have been now, will now be harmonized. And these logistical and regulatory barriers overcoming, them itself unlocks a lot of value. So the regional comprehensive economic partnership is a big deal, but Asians practice what is called open regionalism. So yes, they are deepening regionalism through RCEP, but they also want to be part of, and are part of, most of them, the Transpacific partnership.
They also want to have free trade agreements with the EU. So they're practicing a global open regionalism, because in general, the more such agreements you are part of, the better off you are in terms of access to markets and having harmonized investment regulation, and so forth. So Asians are playing this very wisely, and they remain quite pro globalization, which is obviously more than one can say from, about Western societies right now. What about India? India wanted to be part, but it's not now. So what is the effect of that? Well, I mean, if India wanted to be part of RCEP, it would be part of RCEP, but India clearly does not want to be part of RCEP, even though it should be part of RCEP. Well, at first it seemed they wanted, and now they are not, not in.
No. So, I mean, again, if you want something/ if India were a person, and India wants to sign something, then India would sign something. Okay. But in the form of its present leadership says it wants to trade more with East Asia, and yes, it is trading more with East Asia, and it wants to reduce its trade deficits with East Asia, because India has very large deficits with China, with Japan, and other countries. In other words, it imports a lot of their commodities and food or other goods, manufactured goods, and doesn't export enough. Now their view was that, the RCEP would disadvantage them even further because they're not very competitive. They would wind up importing even more from
other countries who make things faster, better and cheaper. So India would like to ideally eventually join RCEP, but once it is more competitive. The other caveat, which is fair from India's point of view, is that RCEP is not a high standard trade agreement in terms of intellectual property protections, in areas like software. And India's largest export is software, it's well over 100 billion dollars a year of software exports. So if the agreement does not cover Indian software, why join it? So that was the debate happening in India, but you can't have it both ways. You can't join, but have it protect software. You can't join, but forestall the flood of goods until you
are more competitive. Either you join or you don't join. So India will eventually join, and the RCEP members were extremely clear in their declaration that they strongly welcome and want India to join, and that the door is always open. So I think it was a very amicable understanding that India is just not yet in that in the position. And by the way, India did the same thing two years ago with global trade negotiations on agriculture. There were strong efforts to bring down restrictions to food imports, and genetically modified seeds, and these kinds of things. And India stood up and
said, "Absolutely no way. We are an agricultural country. We can not have our farmers be flooded, our markets be flooded with foreign goods that are competing with our local production, and we need to have some safeguards to protect our farmers", and India stood up for its position, based on its economic and social composition. And that's what governments are supposed to do. Well, your book is called "Commerce, conflict and culture, so let's move on a little bit to the conflict side. You've mentioned already a couple of conflicts, and with India, we are certainly hearing one. What are the potential fields, or the big fields of conflict, culturally, politically? Well, economically, we've already talked a little bit.
Well there's many. And I don't suppress this aspect of the story. Like you said, the subtitle of the book has the word conflict in it. Asia is home to all of the major World War III scenarios that exist in the world. If World War III is going to happen, it's going to happen in
Asia. There are conflicts in Asia, there are tensions in Asia, there are rivalries in Asia, all the time. You name it. Taiwan, South China sea, North Korea, Senkaku islands, Kashmir, the, India-China border, many very serious flashpoints. But there's a couple of things that one has to keep in mind. The Cold War ended 30 years ago. And for 30 years people have been saying, World War III is going to happen in Asia, it's going to be a disaster. And for 30 years they've been wrong. They didn't say it would happen the next day, and it still could happen.
But the point is, it's more interesting to look at why certain conflicts do not happen, than simply assuming that they will happen, because you will learn a lot more studying the 364 days a year where the conflicts and tensions are managed, and the one day a year where there is a flare up, and escalation. And Asians have done a good job of integrating geo-economically. Look at RCEP, look at the trade relations between China, Japan, and Korea. They are rivals, but they trade four point five trillion dollars a year in intermediate goods. The most dense trade relationship by volume on the planet is China, Japan and Korea. That's four and a half trillion dollars. That's Germany's GDP roughly, something like that. So/ because of their integrated supply chains.
So, they've managed the geo-economic integration, but suppressed their geo-political rivalries. That could change tomorrow. Taiwan/ China could invade Taiwan tomorrow. There could be war between China and Japan over the Senkaku islands tomorrow. North Korea could launch a nuclear weapon tomorrow. China and the Philippines could/ and Vietnam could be fighting it out over islands in the South China sea tomorrow. And none of that, absolutely none of that invalidates my argument. Because,
for two reasons. One, when you have a war, that is again a proof that you have a system. Again, Europe has been a system for thousands of years, it has been a violent, conflictual system for thousands of years, but it has been a system. And the proof that you are a system, is that you have so much friction and tension and interdependence with each other, that you represent a system, but a violent system. But Asia has actually been a peaceful system for 30 years, and hopefully it will stay that way. But the point is that, my argument is not that Asia will be peaceful. My argument is that Asia is the system, and it operates according to its own logic. The second reason why, if you have one of these conflicts, it doesn't invalidate the argument, is because unlike Europe in 1914 or the 1940s, where one conflict took down the whole region, set back the whole region, destroyed an entire region of the world, just remember how much bigger Asia is. All of Europe fits inside one corner of Asia. And instead of one civilization,
one common heritage, and one geography where one power, let's say, Germany, for example, or France in the 18th and early 19th centuries can pretend that they could dominate the whole region, and march with their armies in all directions, that cannot happen in Asia. Asia is too big. And it's not one civilization, right? You can convince yourself that all Europeans can be forced to speak French or German, but you will never have all Asian speaking Chinese or Hindi, it will never happen. So again, the rules of the Asia are different. The analogy does not even work. So even if you had one war in Asia, let's say Taiwan, let's say South China, sea, let's say North Korea. Let's say you have three wars in Asia. Even if you have three wars in Asia at the same time, Asia is so big that it's not going to derail the whole Asian story. You're still going to have economic growth. You're still gonna have populations urbanizing. You're still going to
have technology investment. All of those things are still going to happen in Asia because a war over here doesn't mean a war over here. In European history a war over here does mean a war over here. Chain reactions, alliance affects right? Again, in Asia, you don't have alliances. You don't have these chain reactions. Instead, when you have a conflict, it remains isolated to
that location between those countries. And the third thing I'll add is, if you have that war, that war will also end. And when that war ends, you move on, you settle the border, you have a new agreement or a treaty, and the countries learn that they have to accept that reality. And that is what Asians and Europeans, or any people have in common. Is that once it's over,
it's over. So you could have a 1945 moment in Asia. I don't think it would be a cataclysmic world war, it would be a local ward. It would be a tragic war, it would be a violent war, it would be an unnecessary war, it would be a bad thing. But you would also have a settlement, a solution, a treaty and history would move on. And that's what could happen. Very interesting. And when you talk about the Asian system, I want to add something else that is important to the system certainly, which is education. What would you say
is the typical Asian education like? What are the pillars there? First, you said some, many are educated of course in America or in Europe. So what is the future of that? Well, there isn't really one Asian educational system. I talked about this in the early part of the book, where I/ sort of Asians are not so cosmopolitan, that they do not have heavily nationalized educational systems, that gloriously reflect their own histories to the detriment of others. Of course they do that, as fanatically as anywhere in the world, if not more so. And I I'm very clear about that. And that's one of the reasons that I also wrote the book, was to write an Asian history. Not a Chinese history, not an Indian history, not an Indonesian history, not a Persian history or a Turkic history, but an Asian history. And that was the hardest part
of the book to write by far, because I couldn't find a common Asian history that all Asians would agree to. I can find common facts, even facts about history of course are heavily disputed, that's why Koreans and Japanese still can't get along. So it took me about one year to write 40 pages of this book, because it was such a painful and thankless task to try to tell one version of the truth, one version of Asian history, that a Filipino, or a Pakistani, or a Kazak or a Vietnamese person could agree to. And actually what has been gratifying is that that worked. It seems to have worked, a lot of people tell me that they learned Asian history, rather than just learning their own country's history. So that all of that is to say, that there isn't obviously one educational system. People like to generalize about Asia outside Asia and say, "Oh, they just
sit in the classroom and they memorize things, and they stick their heads down and they go blind, memorizing facts". That is true in some places, but obviously not true at university. In the PISA exams now, they have these creative problem solving components, and the kids from Shanghai and the kids from Singapore are doing better than the kids from Germany and the kids from England. But the kids from the Czech Republic and Finland are doing as well as some of the Asian kids. So,
you cannot say Asians are not creative, you cannot say Asians aren't innovative. Just look at the pop music charts, it's all Korean music these days. So how can one possibly generalize about Asian education? So things are changing very fast here in Singapore, and Singapore is, of course, always an outlier, it's a tiny country, it's a very wealthy country. It's a very Anglicised country because of colonialism. But they are getting rid of some of the toughest standardized tests.
They don't want school children to spend all day in the classroom. They're forcing them to go out in the sunshine. Memorization is going out through the window. In the early year, first year of university, they do not have to get grades on their exams anymore. You just study, just learn,
just explore, dabble. These are not things that you would expect Asian education systems to do, but that's exactly what they're doing, and I think that's obviously a very good thing. Interesting. Economical collaboration on the one hand, and then often political, I would say competition, something like that, especially when it comes to China, that has become an economic friend to us, but often we feel like it's a/ I don't really want to use the term enemy, but a political opposite. Actually a former German foreign minister Gabriel, he was on TV last week here in one of the big stations, and he said China was something like a "frienemy". How can we overcome those political conflicts? Well, I mean, I did start using that word "frienemy" a long time ago actually, in my first book. And I said that Europe, America and China, are sort of three "frienemies". Now obviously
the scales are tilted somewhat. But the whole point is, goes back to what I was saying about how Asian powers view the world. They don't choose to align with one side or the other, they practice multi alignment. And that's the complexity of the world today, of everyone having multi-directional relations with everyone else. And that/ those complex threads are part of how you mitigate conflict in the first place. And that is the kind of age old dichotomy, or tension between the idea of globalization, meaning interdependence and integration, versus geopolitics which signals division, and rivalry, and tension and conflict. And the truth
is that they're both, they're two sides of the same coin, right? They're all happening at the same time. So I don't know if there is any way to eliminate these tensions. I mean, I do think that there is a scenario, a very happy scenario where we have spheres of influence, if you will, natural spheres of influence, but you have a race to the top in terms of the quality of governance or services provided, in order to justify that sphere of influence, rather than having it by conquest. And you have resource sharing, and knowledge sharing across these regions that may be competing with each other for market share, but not for territory. And I do think that we sort of live in that world now, even though we also live in a world of rivalry geopolitically. Again, both of these things are happening at the same time, because geopolitics and globalization co-exist at the same time, because they are two sides of the same coin. That that's exactly the point.
I like the term happy scenario. Someone else wants to know, speaking/ which is an important question, I think. Speaking about global warming, what scenarios of cooperation do you see here, considering that there might be a challenge to dealing with this, together with questions of prosperity and equality? Well, that's definitely an area where you could sort of, again, have a happy scenario. There's
plenty of things that we could and should work on together, and the obvious one is climate change. But quite frankly, before climate change became the hot button issue that is today, we could have been talking, and still need to be talking about poverty, about failed States, post-conflict reconstruction. There has been a broad, viable, sensible global agenda for a long time. Now we can add climate change very urgently, and should of course, to that list. And the question is, what is a fair approach? On whose shoulders does certain responsibility, do certain responsibilities lie? Are we doing these things fast enough? Who is providing public goods? Which institutions or powers? How can we do more technology transfer to the places that need it, to reduce their emissions and to reduce their consumption of water and energy? This kind of thing. So, I think that this is an area where there should not only be cooperation, but in a way healthy competition to profit from making the world better, if that's what it takes to get powers to think in that way. That's the way China thinks about solar panels, right? China used industrial policy to copy and internalize solar panel technology, and now it leads the world in it. And now the whole world is buying solar panels from
China. So China is making money off of something that is good for the world. Now, so is that a bad thing or a good thing? Well, I mean, the way in which they went about dominating the industry, put a lot of other people out of business, but China is able to do things faster and cheaper, and at scale, better than other countries can. So we would have to go back in time and say, you know, "Would Americans have sold solar panels all across Africa and the middle East, and all of these places as quickly as China is doing it?", probably not necessarily, we don't know. But nevermind what happened in the past, should everyone be making efforts to reduce fossil fuel consumption, and reduce emissions, and do water conservation projects and all of these things in the industrializing world? The answer is of course, yes. When we talk about China's, or actually Asia's rising or expanding influence, you said, you talk about Africa. I just wanna wanna tackle that for just a moment. How can that be seen in the African context? The Asian influence.
So Africa/ again, a lot of people look at it primarily from the outside in, they say that this is a Europe, former European colonies, and Europe's back yard. And now China is coming in, and colonizing Africa and so forth. And I don't like to view Africa in those terms. Because the truth is, it's a very, it's a shifting geopolitical landscape. Africa is first and foremost in African hands. Again, this is a post-colonial region, there's 50 plus countries.
They have political sovereignty. They also are becoming somewhat more of a system, not an intensely integrated one, but more interdependent than before. They're trying to have an African free trade area. African visa free mobility, for all Africans around the continent. They're working
on these things, and African development bank is financing sustainable agriculture projects. China is building infrastructure that benefits Africans across borders. They don't just do projects in one country and this country and that country, they're also doing projects that allow these countries to connect better to each other. In a way, if Europe created the scramble for Africa,
and carved up Africa, a lot of what China is doing is helping Africans to unscramble themselves. And that's something that I've been writing about, and reporting about for a long time. There are benefits, there's a reason why many African countries appreciate these Chinese infrastructure projects. But that doesn't mean that it's all about China. There are more Indians in Africa, than there are Chinese people in Africa, obviously because of the British empire. So the Indian influence in Africa is rising, Europe is working on a new
set of strategies for Africa, United States has contributed a lot of assistance to Africa. So it's a/ as with any other part of the world, it's very, it's less connected than Asia is to the world. But it's getting, it has been getting more connected and that is generally been good for Africa. What about the Middle East countries? Well, I don't use the term Middle East. I don't like that term. And I sort of, I go to great lengths to denounce the term. I think I have for the last 15 years, I think in all of my books,
because I'm trained in geography, and there's no such thing as the Middle East in geography. In geography, we actually use geographical points of reference, not destinational sort of references. And then the term Middle East, as you know, is really just about how long it takes to refuel a ship, when you're traveling from London to India, which is not really important in the 21st century.
But geography is far more timeless. So we can talk about North Africa, Arab North Africa. We can talk about the Gulf countries, you can call it the Persian Gulf or the Arabian Gulf as you like. We can talk about the West Asian countries, which is the term I prefer.
And West Asia is in fact, the Gulf countries, it is the Levantine countries, it's the Mashriq countries, so Iraq, Syria, Lebanon, Israel, Turkey. These are all Asian countries by geography. And this is something that those people in the geographic West Asia increasingly understand. And I spend a whole chapter of the book on this, because again, we tend to think, we meaning you and me, and people with our background, tend to think of this region as the Middle East, and being historically, and still today linked to, or dependent on our policies and trade. And that's literally just not true. That's just factually wrong. Since the 1990s, the Gulf countries have traded much more with China, Korea, Japan, and India than they do with the West. Especially you in Europe, don't really buy Arab oil anymore, and don't need it, because you have been innovating your way out of that dependence. You
get natural gas from Russia, and North Africa and the Arctic. But the point is that, these places are now doing infrastructure deals with China. Much of the population, of course, of the Arabian Gulf countries is Indian. Ethnic Indian, Indian nationals who are permanently or semi permanently living in those countries. So there's almost nothing "Middle East" left about many of these places. They are West Asia. And so they have a very different fate, the fate of North Africa versus the fate of Iraq and Syria, or the fate of Saudi Arabia or Turkey.
These are four completely different answers to the same question. So that's why I've never, ever used the term Middle East, but I'm happy to talk about Iraq, if you want to talk about Iraq, or Saudi Arabia, or Egypt if you want to talk about Egypt. But these places, they are not that much of a system, let's put it that way, right? The Middle East, again, they're geographically very close to each other, but they're a terrible system, a very weak system, and certainly a very conflictual system, and most of these countries barely trade with each other at all.
Well, I'd love to talk to you for much, much longer, but our time is already, almost running out. So let me finish with two more, or broader questions. One is, would you agree that growth in Asia would lead to more global justice? Well, I mean, if you define justice as access opportunity, obviously the ability to have a basic, humane
2021-01-05