Peter Drysdale

Can India Make it Without Manufacturing?

Electric fan factory in India. Image: Jorge Royan/Wikimedia

This article was originally published by the East Asia Forum on 26 October, 2015.

There’s one school of thought in Indian academic and policy circles that India represents a completely new model of development on the way to prosperity. India, it’s claimed, will be a services-led growth model, built on the spectacular international success of its IT hub in Bangalore, and its supply of English-literate back office services to the world.

This way of thinking eschews the experiences of Japan, South Korea, Taiwan and indeed China in East Asia that saw prosperity built on investment in competitive manufacturing and skills, and eventually a world-class manufacturing base. No need to try to emulate the Japanese or South Korean industrial powerhouses or Global Factory China in this model: skip all that and go straight to the top of the ladder.

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Business and Finance

The Geo-Economic Potential of the China–Japan Relationship

Japanese and Chinese Flags. Image: futureatlas.com/Flickr

This article was originally published by the East Asia Forum on 28 September, 2015.

China and Japan already together account for more than a fifth of global output, bigger than the share held by the United States or that of Europe. Over three-quarters of that, of course, is generated in mainland China but, contrary to widely held perceptions, the China–Japan economic partnership is one of the biggest in the world.

The bilateral trade relationship is the third-largest in the world, with a US$340 billion trade relationship in 2014. China is Japan’s largest trading partner, accounting for one-fifth of its trade, and Japan is China’s second-largest. Japan is the largest investor in China, with a stock of direct investment at more than US$100 billion in 2014 or US$30 billion more than the next largest source, the United States. But even those massive trade and investment figures understate just how intertwined are these two Asian giants.

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The Trouble with Japan’s New Security Bills

Flag Emblem on a Japanese Military Uniform. Image: Koalorka/Wikimedia

This article was originally published by the East Asia Forum on 3 August, 2015.

The debate over Japan’s new security bills, which seek to overhaul post-war defence policies, has shifted to the upper house and the streets, as Prime Minister Shinzo Abe presses on to secure their passage into legislation. On 16 July the lower house passed the package of bills in a vote that was boycotted by opposition parties as tens of thousands protested outside the Diet.

Abe has extended the parliamentary sitting by three months to secure the outcome before he faces re-election to the presidency of the Liberal Democratic Party (LDP) and therefore the prime ministership. He rammed the bills through the lower house in the knowledge that, even should the House of Councillors reject them, ultimate passage of the bills would be secured after a 60 day reconsideration and re-passage with a two-thirds majority through the House of Representatives. So, with enactment of the unpopular proposals almost guaranteed even if all of the opposition parties band together to block them in the upper house, why is the Abe government in trouble over the issue?

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Regional Stability

Where Have All Japan’s Young People Gone?

Japanese student in a classroom. Image: ken19991210/Pixabay

This article was originally published by the East Asia Forum on 4 May, 2015.

The remarkable ageing of the populations in most advanced economies is no more evident or precipitate than in Japan. Earlier, Japan’s and other countries’ anti-natal policies encouraged a lowering of birth rates in an attempt to boost the chances of economic advancement.

In a decade or two, the impact of China’s one-child policy, and the subsequent low Chinese fertility rate, will also lead to a rapid decline in its population and acceleration of the ageing of its population. China may get old before it’s rich, as the popular aphorism now suggests, but most agree that while a reversal of the one-child policy may alleviate the decline in its fertility rate witnessed over the past several decades, that is hardly likely to entirely take the pressure off China’s coming demographic crunch.

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The New Nuance in Chinese Diplomacy

Chinese flag with Dollar signs. Image: Magalie l’Abbé/Flickr

This article was originally published by the East Asia Forum on 24 November, 2014.

Much energy has been expended on projecting the impact of the rise of Chinese economic power on its political and military might and the strategic contest with the United States. In a conflation of geo-economic and geo-strategic analysis, two camps have emerged: one warns about the consequences of the United States not conceding strategic space as Chinese economic and strategic power continue to grow; the other asserts the continuing dominance of US military-strategic and economic power as Chinese power peaks, in some scenario or another. As the nuance in Chinese diplomacy over the past week or two suggests, the geo-political and economic world would appear a tad more complex than either camp allows.

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