One of these days, maybe soon, this trade war is going to end. The U.S. could end the war by reintegrating itself into the multilateral global trading system. Or it could surrender its global economic leadership to China. Either way, it’s worth pondering the shape of the global order afterwards.
It will be a truly multipolar world, with Asia as one of its most dominant regions. Since the 2008 global financial crisis, emerging Asia’s combined GDP has grown 188%, versus 19% in the U.S. and 13% in the EU, according to the IMF. This Asian dominance should only grow. Within a decade, Asia’s GDP is projected to exceed the combined GDPs of the U.S. and Europe.
Of the $30 trillion the Brookings Institution projects the world’s middle class will spend in the next decade-and-a-half, most will come from emerging Asia such as China, Indonesia, India and Vietnam and only 3% from developed countries. Asia’s economic rise will reshape the global order and mint new fortunes across Asia. Asia already has more billionaires, at 827, than second-place U.S. at 585, according to the 2018 Forbes billionaires list.
Whatever the U.S. government does next, American society’s deep divisions and polarisation will persist beyond the trade war’s end. Thus, America’s leadership in the post-trade war global order will be severely weakened, if not eliminated. Europe, meanwhile, will be increasingly inward-looking, busy amalgamating 27 diverse countries under a single European identity and polity.
The EU, a top-down, grand design intended to unify Europe, has run aground on the shoals of resurgent populist nationalism, leaving it little space for global leadership as it deals with this existential crisis.
Next comes Asia. Without any grand design or pre-tense of shared values, Asia has become one of the world’s most economically integrated regions, second only to Europe, despite lacking a regional free trade agreement. That said, Asia will remain diverse, fragmented, and beset with geopolitical tensions.
Don’t expect an “Asian Union” soon. Asia’s economic integration stems from grassroots pragmatic opportunism the exact opposite of Europe’s top-down grand design. Despite geopolitics, Asian businesses find ways to trade, invest and collaborate across borders.
Today, Asia has the world’s most sophisticated and productive supply chains, which are rapidly expanding into Central Asia and Africa, and are amplified by China’s Belt and Road Initiative.