The book Asia Rising was a prescient 1995 forecast of East and South Asia’s continuing rise to economic power, written by the Economist’s first Asia editor, Jim Rohwer. It is also mostly forgotten because, two years after its publication, East Asia fell into a deep financial and economic crisis that seemed to discredit the thesis. And after that, when China and India’s spectacular growth in the first decade of the new millennium proved Rohwer right in spades, he wasn’t around to say I told you sobecause he’d died (in a sailing accident) in 2001.
I knew Rohwer slightly, and I thought of him a lot last week during my first visit to Shanghai, a city that played a central role in his book. He had forecast that it would be the epicenter of the Asian boom, with 27 million inhabitants by 2020 and a place alongside New York and London as one of the world’s top three financial capitals. Rohwer — at the time a resident of Hong Kong — also predicted that he’d be living there, “in a district … that in imperial days was known as the French Concession.”
Obviously, and sadly, that last prediction can’t come true. But one night last week I found myself sitting in the garden of a sturdy old house in the lovely, leafy neighborhood that is again known as the French Concession, drinking excellent wine poured by the China-born executive at a U.S. company who lives there, and concluding that Rohwer really had been on to something. Shanghai stands a good chance of meeting or surpassing his population prediction — it’s already at close to 24 million. It’s not yet quite the financial center Rohwer envisioned, because China so far hasn’t been willing to take the plunge into full, unfettered participation in global financial markets (although a new free-trade zone in Shanghai amounts to a major dipping of toes in the water). It does have the feel of a soon-to-be-inescapable global metropolis, the kind of vibrant, affluent, stylish, bold place that will be setting trends and shaping the world economy for decades to come.
Am I utterly confident in that prediction after four days in Shanghai and just 10 total in China? (I also visited Beijing, where I spent most of my time stuck in traffic, and the port city of Dalian, where I spent most of my time in this crazy-looking new conference center.) No, I’m not, and the superficial impressions of short-term visitors to China should of course be taken with many grains of salt.
But a visit to China, or at least to a few of the big, booming cities on or near its coast, cannot help but reinforce the view that it is the inevitabilists like Rohwer who have gotten Asia in general and China in particular right, while the doubters have gotten things wrong again and again and again over the past couple of decades. Nothing truly is inevitable in this world, and China now faces huge pollution problems, dwindling resources, an aging workforce, and a harder road to economic progress with the potential gains from cheap-labor-driven export growth mostly exploited — not to mention the potential for conflict between a populace growing accustomed to economic freedom and at least partial freedom of expression and a ruling political party determined to stay in control. No country has risen to economic greatness without crises and backward steps along the way. But China’s forward momentum is remarkable, and it is so huge and so far along the road to joining the world’s wealthy nations that from now on its crises and backward steps will likely be ours, too.
A core prediction of Rohwer’s 1995 book was that by 2020 the center of global economic gravity would have shifted from the mid-Atlantic to somewhere in or near Asia — with Asia’s economy bigger than those of Europe and the Americas combined. With only six years to go and Asia stillquite a few trillions of GDP dollars behind, that seems like a stretch. But the relative change in fortunes has nonetheless been dramatic, and betting against Rohwer on Asia has generally been a bad idea. If only he were around to collect.
One other superficial impression from my China visit: I’ve long been partial to the argument that India possesses a long-run advantage over China because while its hard infrastructure of highways and railroads and airports and power grids is clearly inferior, its soft infrastructure of laws and politics and a free press is vastly superior to China’s. But China’s physical infrastructure just keeps getting more impressive. (Fun fact, from a fascinating article by Keith Bradsher in Tuesday’s New York Times: “China’s high-speed rail network will handle more passengers by early next year than the 54 million people a month who board domestic flights in the United States.”) And over the past decade, with the rise of social media and an independent business media and the continuing development of its legal system, China has made real progress on the soft stuff—possibly as much as India has inbuilding airports and subways and surely more than India has in improving its electrical grid.
