The West: Why East Asians cannot just let us rule the world?

Europe: Why our greatest threat always come from East Asia?

[b]- East Asian GDP surpassed U.S. last year, to overtake E.U. this year

  • Chinese stabilization, Japanese recovery power regional confidence

  • Eurozone economies expected to contract 0.4% this year[/b]

China’s exports increased more than expected in August and inflation stayed below a government target, Bloomberg reported, triggering a new wave of optimism from analysts. “China is back (from slowdown),” said Stephen Green of Standard Chartered Bank. “It won’t be a strong recovery but it is increasingly clear we have bottomed,” hinting that the country’s support measures such as tax cuts for small businesses and extra spending on infrastructure have worked.

The 2-year Chinese slowdown ends, economy rebounds

The latest reading from the official Manufacturing Purchasing Managers’ Index (PMI) for August was also strong, suggesting better-than-thought conditions at the nation’s factories. “The low CPI inflation means that the Chinese government, unlike India, still has spacious room for bolstering growth via implementing a mini fiscal stimulus and avoiding monetary tightening,” Lu Ting, head of Greater China economics at Bank of America Corp. in Hong Kong, said in a note. The PPI report “shows the economy has been recovering,” he added.

Factory output growth hit a 17-month high and retail sales grew at their fastest pace after slowing for more than two years. As a result, government officials are now confident that economic growth will reach the 7.5% target for the year while combined imports and exports will expand by the target of 8%.

In Japan, the so-called Abenomics is taking effect. Japan’s economy expanded much faster than initially thought in the second quarter, data showed, adding to growing signs that a solid recovery is taking hold and strengthening. Japan, who is trying to kick-start its economy after more than 20 years of stagnation and deflation, reported its consumer inflation rose to almost five year high, while industrial output posted a strong rebound and the jobless rate fell to its lowest level since 2008, beating expectations by analysts polled in Reuters.

After 20 years of stagnation, the Japanese economic recovery is within sight

“Things are improving and it’s good to see production is improving and the labor market is recovering, which means more purchasing power and more stable demand,” Jesper Koll, head of Japanese equity research at JPMorgan Securities in Tokyo, told CNBC Asia’s Squawk Box. “The overall picture out of Japan is very clear we do have a broadening of the economic recovery,” he added.

Bank of Japan Governor Haruhiko Kuroda on Friday said he is confident about the effects of the aggressive easy policy decided in April and noted that Japan’s economy is moving toward the path of achieving the 2% price stability target. That would return the Japanese economy to growth. While the Eurozone tries to break out of recession and the U.S. economic recovery remains anemic, Japan has begun to grow at an encouraging rate. The shock-therapy policies of Prime Minister Shinzo Abe have helped Japan’s economy expand for three straight quarters at a pace faster than that of the United States.

Western economists are impressed. “It may have quite a lot to teach us,” Joseph Stiglitz, a Nobel laureate economist, wrote. “If Abenomics is even half as successful as its advocates hope, it will have still more to teach us.” This time, Japan’s economic recovery is different from the past, Akira Amari, Abe’s chief economic minister, said in an interview. “We are matching fiscal, monetary and growth policies.”

South Korean economy remains resilient amid emerging market turmoil

In South Korea, economy grew at the fastest pace in the second quarter. The growth data is cementing the market’s view that Asia’s fourth-largest economy is on a modest recovery track, aided by fiscal and monetary stimulus. All these come as other emerging markets, including India, Indonesia, Malaysia and Thailand, are suffering from capital instabilities and growth weakness, leading to projection cuts, outlook downgrades, and currency depreciation in the said countries.

It also confirmed long-time Western belief that any political or economic threats will and always be coming from East Asia, one of the most successful regional economies of the world alongside Europe and North America, whose populations have demonstrated rapid learning capabilities, skills in utilizing new technologies and scientific discoveries, and putting them to good use in production. It is a region where work ethics in general tend to be highly positive.

The economy of East Asia, taking into account of China, Japan, South Korea, Hong Kong and Taiwan, surpassed that of the United States last year, with a GDP of $16.08 trillion versus $15.69 trillion. With growth rates stabilized, minimum forecast put that it would also overtake the 28-member European Union ($16.58 trillion) by the end of the year. Overall, approximately 78% of Asia’s $20.7 trillion economy came from East Asia.

European supremacy to be ended by East Asia this year

Based on the most recent revised figure from the European Central Bank (ECB), the E.U. economy will contract 0.4% this year, but this article shall not deduct its GDP in the calculation. The Federal Reserves put the latest U.S. growth estimate at 2.3%. For China it is 7.5%, Hong Kong 3.0%, Japan 2.8%, South Korea 2.7%, and Taiwan 2.3%. This would put the 2013 year-end GDP as; East Asia ($16.92 trillion), E.U. ($16.58 trillion), and the U.S. ($16.05 trillion), marking the first time East Asia has a higher GDP than the Europeans since the industrial revolution took hold 180 years ago.

The industrial revolution that began in 1760 was a major turning point in history; it catapulted European powers into global stage, eclipsing traditional heavyweights like China, India, Persia and Turkey. The transition also enabled Great Britain to surpass China, whom for a large part of the last two millennium was the world’s largest economy, in an event known as the Great Divergence. China, a 5,000-year old civilization, fell behind; India completely annexed; while the Muslims permanently weakened.

The industrial revolution showcased in 2012 Olympics - it was this transition which allowed the West to leapfrog the East

Owing to rapid industrial growth, GDP of what is today the 28 modern E.U. states, surpassed East Asia in 1830, reaching the peak of a 3 times lead prior to World War 1 in 1913. At its height, Europe also possessed an economy twice the United States of America. On others, even before the industrial revolution, GDP of Europe had already surpassed the Muslim world in 1500 and South Asia (led by India) in 1700.

Western civilization, which encourage a mercantile, innovative, individualistic, and capitalistic spirit, was then entrenched across the world and introduced as a superior alternative to the Chinese, whose Confucian teachings promoted unquestionable loyalty to one’s superiors and the state, discouraging creativity; Indian, who was distinguished by its caste system of bound labor that hampered economic progression; and the Muslim, whose Islamic laws had at earlier stages promoted development but since the Late Middle Ages, couldn’t catch up with the modern world.

Despite that, the Europeans continue to be wary about a possible threat from other civilizations towards their global hegemony. French emperor Napoleon Bonaparte, more than 200 years ago in 1803, believed that only China may eventually rise to challenge the West. Pointing to a map, on China, he said, “Ici repose un gant endormi, laissez le dormir, car quand il s’veillera, il tonnera le monde” (here lies a sleeping giant, let him sleep, for when he wakes up, he will shake the world).

French emperor Napoleon: Let China sleep forever, wake her up and the world will shake

But China soon descended into chaos, and in the 1894 Sino-Japanese war, was militarily defeated by a once-obscure nation, Japan. The land of rising sun would later shocked Europe through its victory over Russia, a major Western power, in the 1904-05 Russo-Japanese War, transforming the balance of politics in East Asia, and resulted in a reassessment of Japan as the first non-Western post-industrial great power. European focus was then shifted from China to Japan.

In 1895, German Emperor Kaiser Wilhelm II coined the term ‘Yellow Peril’ to refer to the supposed danger of ‘barbaric’ East Asian hordes overwhelming the ‘civilized societies’ of the West. According to the Germans, among all other civilizations, only the East Asians were capable to pose a challenge to the West. An Austro-Hungarian general reportedly said, “The yellow peril is more threatening than ever. Japan has made in a few years as much progress as other nations have made in centuries.”

German Emperor Kaiser Wilhelm II: Yellow people are always the greatest threat to us

The Kaiser, known for his virulently anti-Japanese/Chinese attitude, then commissioned a painting which was intended to encourage Europeans to cooperate to beat back the Eastern menace. The painting, which was made into a widely used poster, shows a distant Buddha-like figure sitting in an approaching firestorm while an Ayran messenger warns various European countries of their impending doom.

From then onwards, the German Emperor became obsessed with what he called the ‘Yellow Threat’. In 1900, he ordered German troops on their way to China to behave like Huns, showing no mercy and taking no prisoners. After the Russo-Japanese war, the Kaiser said the Japanese would soon be parading through the streets of Moscow. In 1907 he predicted a conflict between Japan and America, and England would have to side with the latter since this was ‘a question of race, not of politics, and it is Yellow versus White’.

The ‘Yellow Peril’ painting commissioned by the German Kaiser

In early 1942, despite having Japan as an ally, German dictator Adolf Hitler believed that the East Asians were the greatest threat to the dominance of the White race, and the cooperation should only be temporary in nature, saying to his foreign minister Joachim von Ribbentrop that, “We have to think in terms of centuries. Sooner or later there will have to be a showdown between the White and the Yellow races.”

After World War 2, Japan was nuked and occupied, while China, Taiwan and South Korea were poorer than some African, Arab states and the newly independent India. But Britain Prime Minister Winston Churchill did not believe the Indians, Muslims or Africans could build up a balancing forces anywhere near Europe, and instead in his book, he again pointed to the Far East, to China, a nation on verge of bankruptcy at that time, and repeated Napoleon’s warning, “Beware the sleeping dragon. For when she awakes the Earth will shake.” Churchill, who opposed Indian independence, was actually delighted when news of Muslim-Hindu clashes surfaced in India.

German dictator Adolf Hitler: We must prepare for a showdown between the Whites and the Yellows

Though Churchill missed the mark, he wasn’t entirely inaccurate. It was Japan who again bounced back first to give the Western world another shock. With its record period of economic growth after World War II, Japan thoroughly annihilated European consumer electronics industries. In 1951, Japan’s GDP was US$14.2 billion, 3 times less than Britain. By 1970, Japan had overtaken all European economies, and in 1975, it was double that of the UK.

From a mere US$14.2 billion in 1951, the Japanese GDP soared to hit to US$1.065 in 1980 - a 75 times increase within less than 30 years. By 1987, the world’s economy appeared to revolve around Japan, with the mighty Japan Inc. producing 6 of the top 10 wealthiest man listed in Forbes. During the miracle years, Japan had almost no economic competitors in Europe and none in Asia. The good time went on until the crash of early 1990s.

Post-war Japan sent European consumer electronics industries into museum

The second wave of economic threat came from Taiwan and South Korea, again the states in East Asia. These two were nations poorer than African Ghana and Congo back in 1950, with their own government officials at that time admitted that “we were the poorest, most impossible countries on the planet”. Analysts across the world predicted that one would fall to North Korea and other to either China or the U.S., but in less than 40 years, they defied odds to emerge as the world leaders in IT manufacturing.

Today, Taiwan and South Korea, not Europe and the United States, dominate the global value chains in the IT and electronic manufacturing industry. Among them, Taiwanese companies produce 89% of the world’s laptops, 84% tablets, 80% motherboards, 70% DSL CPE, 69% LCD monitors, 69% IC foundries, 66% WLAN routers, 57% optical discs, while the South Koreans make 80% of the world’s display panels, 64% DRAM memory, 61% 3D technologies, 60% NAND, 37% smartphones, 35% ship vessels, and 25% batteries. If both countries disappear today, the modern technological-driven world would plunge into chaos.

Taiwan and South Korea wiped out Western high-tech manufacturing

The third and most devastating wave came from China, yet another East Asian state, targeting any remaining Western manufacturing industries that haven’t yet been lost to Japan, Taiwan and South Korea. It resulted in the greatest manufacturing decline in Europe since the industrial revolution. The world experience another Great Divergence, this time from the West back to Asia.

When China opened up to the world in 1980, its GDP was US$189.4 billion, slightly below that of India’s US$189.6 billion. Today this has soared to US$8.2 trillion, compared to India’s US$1.9 trillion. In 1990, the economy of U.K. was nearly 3 times that of China. By 2009, just like Japan in 1970, China overtook all European economies. In 2010, it was more than twice that of Britain, and in the same year, China achieved what Japan failed during its golden age, that is overtaking the U.S. to become the world’s largest manufacturing nation.

China ended 200-year old Western manufacturing dominance in 2011

But will the Western civilization be overwhelmed by East Asian, as feared by Napoleon, Kaiser, Hitler and Churchill? Quite unlikely, at least not until 2100. While East Asia may have overtaken the U.S. and E.U., the Western world (comprised of the U.S./Canada, Europe, White South America, and Australia/New Zealand) in total still contribute around 51% to the world’s GDP compared to the East Asians 24%. Moreover, the East Asians have never expressed any desires to work with each other.

This is evidenced by that there is ASEAN, a geo-political and economic organization for Southeast Asia, and SAARC, another regional organization for South Asia, but never an equivalent group for East Asia. After World War 2, economic integration in Europe and North America have produced the E.U. and NAFTA (U.S., Canada, Mexico), but the Chinese, Japanese and Korean still insist on that they alone could take on the world.

78% of Asia’s economy came from this region

While Europeans are now focusing on greater economic unity, East Asians are drowned in mutual rivalries and suspicion, competing to outclass each other. Just an example, instead of cooperating with the Chinese or Japanese, the Korean solution to become a world-class economic giant is a unification with North Korea. Media agency Korean Times published last year that South Korea cannot control China’s rise, but a unification with North Korea would allow it to surpass Japan. In Japan, the government’s priority is to reinvigorate the economy, not to challenge the West, but to beat back the rise of China and South Korea. In Taiwan, policies are directed at weakening Korea’s IT industries.

According Dr. Richard Lynn’s IQ and the Wealth of Nations, East Asian IQ on average is among the highest in the world, above that of Whites. This is true as revealed in the latest PISA international test scores. But the eastern culture also showed a dismissal of change due to their fear of failure; a stark difference from their Western counterpart where Europeans are willing to experiment new things on mass scale to benefit their society.

East Asians at top of the latest international PISA test

For instance, the Apple iPhone was introduced in 2007, but 7 years ago in 2000, the Japanese already possessed that kind of mobile phone technologies. The industry however, was inward, and the Japanese, as advanced as they may sound, were just like other Asians. They marvel at re-innovation, making improvements to existing models, but are reluctant to test something totally new. Even when the global internet penetration experienced a surge in 2004-05, the Japanese remain hesitated to launch their smartphones on a global scale, out of concerns any failures would be seen as a Japanese embarrassment.

All these pointed to that the East Asian economic victory may not be perpetual. Western spirit of innovation and adventurism after all, have been carrying on unbroken for 500 years since the Age of Renaissance. The East Asians may have their days today, but the likehood of a sudden technological revolution in the West is high, and just like the industrial revolution, that would bump them back again to the pinnacle of the world.

Europe: Why this breed of people cannot let us have peace in mind?

Among others, India has been championing an economic miracle for more than a decade by now, with disappointing results. GDP has yet to overtake the European ‘Big Four’ (Germany, France, U.K., Italy) and per capita ($1,592) is roughly on par with African average. The Muslim world, stagnated for over 500 years by now, is involved in 34 of the 44 ongoing conflicts across the planet today, the deadliest being the Syrian civil war, and is unlikely to witness any revival anytime soon. The combined industrial output of the 54-nation African Union on the other hand, is at the moment, just on par with the island of Taiwan.

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if you were to go with Nostradamus, the victor will be the West.

The so called Protector and hero will become a bully when the balance is no longer there…

Some competitor is always healthy…

i have great respect to koreans, especially the south… despite the fact there are inhuman sacrifices, but for the sake of a better nation.

i hate to say that, but really,… lighter skin colour seems to be more willing to develop compared to the darker skin colour… oh this is really bad to say… my apologies