21st century, 25 years: The return of Asia

There is little doubt that the MAGA crowd in America that goes into raptures every time their patron saint, Donald Trump, makes an outrageous claim, would be aware of the name Angus Maddison. He is an economic historian who has argued convincingly that India & China accounted for almost 50% of the global GDP in the 17th century. That era is, of course, gone. But Maddison and others of his persuasion further argue that Asia has dominated the global economy for most of recorded history- and that the dominance will resume in the 21st century after a four-century hiatus- as the 21st century completes 25 years, do they sound credible?

Image credit: @MEAIndia

Fifty years ago, in 1975, when the first G-7 Summit was organised, such prophecies would sound laughable. Japan is the odd Asian country in the G7 and may not remain there for very long if the long arc of history is factored in. Back then, the seven largest Asian economies, not including Japan, China, India, South Korea, Indonesia, Saudi Arabia and another interchanging one were so far behind that their combined GDP was less than that of the US. But nothing is permanent. In 1975, the US military withdrew from Vietnam in the most humiliating manner. That was perhaps the first metaphorical sign of things to come. In 2021, the US military withdrew from Afghanistan in an even more humiliating manner. The West, and the rest of the world, seemed to have lost the “War on Terror”. In 2024, Donald Trump had to shake hands with the new ruler, Mohammed Al Julani, after Bashar al-Assad went into exile in Russia. Julani happens to be a former Al Qaeda operative who claims to have changed his spots.

That provides a glimpse of the geo-political realities of the 21st century. The United States and its allies remain the most formidable military force ever assembled in the world- but the monopoly over violence is fraying badly at the edges. Back in 1945, when the US dropped atomic bombs on Japan, President Harry Truman might perhaps have suffered pangs of conscience. But he didn’t have to worry about retaliation. In this century, pundits in American think tanks gnaw their teeth as they know the Atlantic & Pacific oceans won’t help save America. Intercontinental ballistic missiles armed with nuclear weapons can destroy the country.

If the military swagger is fraying at the edges, the economic bullying looks even more comical. Both India and China have been targeted by a populist and mercantilist Donald Trump with extremely high tariffs that could have been crippling in the 20th century. But thus is the 21st century. While India lacks the wherewithal to hit back, it has refused to be bullied and is not suffering any consequential damage. In contrast, China has the wherewithal and hit back hard. It refused to buy soybeans from American farmers who are Trump voters. Worse, it imposed restrictions on exports of rare earths, without which modern 21st century manufacturing is well nigh impossible. No matter what the spin given by Western media, Trump, the bully, felt bullied and sat for a Summit in late 2024 with the president of China, Xi Jinping. For good measure. Trump announced that he is going for a G-2 meeting. For the first time in living memory, a white Anglo-Saxon leader acknowledged an Asian power, China, as a near-equal superpower.

And why not? As mentioned earlier, the G7 accounted for 70% of global GDP. Twenty-five years into the 21st century, it counts for 40%. The seven largest Asian economies, including Japan, account for one-third. That is in nominal GDP terms. If we factor in purchasing power parity, just China and India would be almost equal to the G7. Twenty-five years further down the road in 2050, the transition would perhaps be complete. Almost all the major developments in the first 25 years of this century- if you ignore the screaming headlines- point towards that.

The aim of this series is not to just list 25 developments in the 21st Century. Over the last 25 years, the listing of things and developments has been very easy. The real purpose is to mark out the subtle and yet tectonic shifts in important issues like democracy, demographics, free speech, models of governance, trade, technology, economic prosperity, dynamism, social interactions and much more. There will be no doubt at the end of this series that in another 25 years, the changes that we saw in the first 25 years will have gathered momentum, and by 2050, Asia will inevitably be the dominant force, both economically and militarily, across the world.

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