Asia has the second largest nominal GDP of all continents, after Europe, but the largest when measured in purchasing power parity. As of 2011, the largest economies in Asia are China, Japan, India, South Korea and Indonesia. Based on Global Office Locations 2011, Asia dominated the office locations with 4 of top 5 were in Asia, Hong Kong, Singapore, Tokyo, Seoul and Shanghai. Around 68 percent of international firms have office in Hong Kong.
In the late 1990s and early 2000s, the economies of the PRC and India have been growing rapidly, Both with an average annual growth rate of more than 8% other recent very high growth nations in Asia include Israel, Malaysia, Indonesia, Bangladesh, Pakistan, Thailand, Vietnam, Mongolia, Uzbekistan, Cyprus and the Philippines, and mineral-rich nations such as Kazakhstan, Turkmenistan, Iran, Brunei, united Arab emirates, Qatar, Kuwait, Saudi Arabia, Bahrain and Oman. According to economic historian Angus Madison in his book The World Economy. A Millennial Perspective, India had the world's largest economy during 0 BCE and 1000 BCE.
China was the largest and most advanced economy on earth for much of recorded history, until the British Empire (excluding India) overtook it in the mid-19th century. For several decades in the late twentieth century Japan was the largest economy in Asia and second-largest of any single nation in the world, after surpassing the Soviet Union (measured in net material product) in 1986 and Germany in 1968. (NB: A number of super national economies are larger, such as the European Union (EU), the North (NAFTA) or APEC). This ended in 2010 when China overtook Japan to become the world's second largest economy.
In the late 1980s and early 1990s, Japan's GDP was almost as large (current exchange rate method) as that of the rest of Asia combined. In 1995, Japan's economy nearly equaled that of the USA as the largest economy in the world for a day, after the Japanese currency reached a record high of 79 yen/US$. Economic growth in Asia since World War II to the 1990s had been concentrated in Japan as well as the four regions of South Korea, Taiwan, Hong Kong and Singapore located in the Pacific Rim, known as the Asian tigers, which have now all received developed country status, having the highest GDP per capita in Asia.
It is forecasted that India will overtake Japan in terms of nominal GDP by 2020. By 2027, according to Goldman Sachs, China will have the largest economy in the world.
Several trade blocs exist, with the most developed being the Association of Southeast Asian Nations.
Asia is the largest continent in the world by a considerable margin, and it is rich in natural resources, such as petroleum, forests, fish, water, rice, copper and silver. Manufacturing in Asia has traditionally been strongest in East and Southeast Asia, particularly in the China, Taiwan, South Korea, Japan, India, the Philippines, and Singapore. Japan and South Korea continue to dominate in the area of multinational corporations, but increasingly the PRC and India are making significant inroads. Many companies from Europe, North America, South Korea and Japan have operations in Asia's developing countries to take advantage of its abundant supply of cheap labour and relatively developed infrastructure.
According to Citigroup 9 of 11 Global Growth Generators countries came from Asia driven by population and income growth. They are Bangladesh, China, India, Indonesia, Iraq, Mongolia, Philippines, Sri Lanka and Vietnam.
Asia has four main financial centers: Tokyo, Hong Kong, Singapore and Shanghai. Call centers and business process outsourcing (BPOs) are becoming major employers in India and the Philippines due to the availability of a large pool of highly skilled, English-speaking workers.
The increased use of outsourcing has assisted the rise of India and the China as financial centers. Due to its large and extremely competitive information technology industry, India has become a major hub for outsourcing.
In 2010, Asia had 3.3 million millionaires (people with net worth over US$1 million excluding their homes), slightly below North America with 3.4 million millionaires. Last year Asia had toppled Europe. Citigroup in The Wealth Report 2012 stated that Asian centa-millionaire overtook North America's wealth for the first time as the world's "economic center of gravity" continued moving east. At the end of 2011, there were 18,000 Asian people mainly in Southeast Asia, China and Japan who have at least $100 million in disposable assets, while North America with 17,000 people and Western Europe with 14,000 people.
Realizing the Asian Century: Asia’s Role in the World
Asia’s growth and much larger footprint in the global economy will bring with it new challenges, responsibilities and obligations. This has far reaching implications for the region’s role in the world, how it sees its long-term self-interest and how it interacts with other parts of the world.
Asia will need to rethink its role on a very wide range of issues and institutions: from its stake in the global commons—global trade and financial systems— to its relation to other regions, to the implications of domestic and regional policies for others, to Asia’s role in international development assistance in Africa and so on. It is also obvious that global peace and security are a prerequisite for Asia’s economic and social well-being. The region will need to fundamentally transform its role in global governance.
A rising stake in the global commons
The central implication of Asia possibly accounting for half or more of global GDP and population by 2050 is that the center of gravity of the global economy will shift gradually from the Atlantic Ocean to the Pacific Ocean, and ultimately to mainland Asia. As Asia becomes the heart of the global economy, it will be absolutely important for Asia’s own well-being that the global commons on which the global economy depends and prospers continue to function effectively and efficiently. As a result, Asia will become the biggest stakeholder in the global commons, including an open trading system, a stable financial system, international rule of law, and, of course, in peace and security throughout the world.
Without these global commons, Asia will not be able to grow and prosper. Accordingly, Asia must take greater ownership of the global commons. Indeed, in its own self-interest, the region should become a forceful advocate and defender of the global commons. Its efforts to enhance regional cooperation must not be at the cost of Asia’s traditional openness to the rest of the world. Asia must adhere to its long-standing strategy of “open regionalism”.
Global trading system
East Asia’s growth since the 1950s was greatly facilitated by an increasingly open global trading System. Asia has profited handsomely from such globalization. Today, Asia’s trade to GDP ratio is the highest amongst the major regions. In the future, even as domestic and intraregional markets account for a larger share of Asian economies, the region will need to continue to trade heavily with the rest of world to supply the ultimate consumers in North America and Europe, acquire the latest technologies and the know-how wherever they exist in the world, and import natural resources (energy; other minerals, food) needed by the domestic economies. In short, it is of vital interest to Asia that the world continues to have an open and free trading system.
Global financial system
Finance is global, and therefore while national reforms are necessary and regional cooperation Desirable, they are not sufficient. Therefore, Asia must also pay much more attention to the health and robustness of the global financial system. With its enormous savings and investment rates Asia should host some of the largest global equity, debt and banking markets well before 2050. It is Already the biggest holder of global reserves. As a region heavily reliant on trade, Asia would therefore have huge stakes in a well-functioning and fair international monetary system and related institutions. It will be in Asia’s vital interest that the global financial systems are sound and efficient (in addition to its own domestic and regional financial institutions and markets). This is necessary for the region’s savers to have acceptable risk adjusted returns and for its economies to have access to investment funds at rates that are competitive with investors elsewhere. Given its rising weight in global reserves, savings and investments, the region will have an opportunity to increasingly shape the global financial architecture, the monetary system and global financial intermediation. Asia needs to play an active and constructive role in the governance of the global Monetary and financial system.
Stance on climate change
Developing Asia’s stance on climate change requires a fundamental reassessment. Analysis carried out for this study demonstrates that early and aggressive action on climate change is in Asia’s own self-interest— socially, economically and politically. A change in its current stance will also be an early demonstration to the world community that Asia is willing and able to play a constructive role in the global commons.
Stake in global peace and prosperity
As Asia becomes the centre of the global economy, it will be in its own self-interest that the rest of the world is also doing well economically and politically. Peace and security throughout the world will be essential for its own long-term prosperity. Since the end of World War II and until now, Asian Countries have not felt the need to play a proactive role in sustaining global peace and security. The Western powers were keen and able to play that role. But, it may no longer be adequate for Asia to play a secondary role. In line with the rise in its share of the global economy and thus its rising stake in the well being of the rest of the world, Asia needs to devote greater intellectual and material resources—jointly with Europe and North America—to the economic, social and political stability of the world as whole. The change in Asia’s role is neither necessary nor will it come immediately, but it will happen gradually. But Asia needs to start preparing for it soon.