It’s Asia, Stupid!
Sydney, Australia: The Labor government was recently re-elected here. Yet it aims to toss out much of what the working man has gained in the last several decades. Australia also may bid adieu to Queen Elizabeth II and become a Republic.
Why? A panic to shed a long-standing European bias, and focus on the neighboring Asian economic juggernaut. I sympathize with the urge. After a month touring the Pacific Rim, I'm in shock myself.
Take Malaysia. It's growing at 8 percent a year—the world slowdown be damned. Though Malaysia is officially an Islamic country, Prime Minister Mahathir bin Mohamad has no intention of letting religion stall his capitalist transformation. Local
Islamic doctrine is expanding the definition of jihad or holy war, to include hard work!
The skyline of the capital city, Kuala Lumpur, is a blur of construction cranes; sounds of nonstop riveting, even through double-glazed hotel windows, make sleep almost impossible. To the north in Penang, Japanese and American companies are going
gangbusters in electronics: doing sophisticated design work, not just assembly tasks as in earlier days.
Here's the drift: First, the Japanese economy took off. Then, as wages and the yen soared, Japan started shipping low value-added work to the likes of Korea, Taiwan, and Singapore. Next, the Koreans (et al.) raced up the value-added chain and began sending lesser-value work to Malaysia and Thailand. Now Malaysia and Thailand are also shooting toward the high-end stratosphere, and exporting lower-wage tasks to places such as Indonesia.
Newly rich Chinese coastal provinces, climbing the productivity ladder in goods and services themselves, are shifting mundane activities to less progressive inland provinces. And in India, cities like Bangalore have quickly become software design centers.
You've heard about $1,000 business luncheons and $100 melons in Tokyo. But how about $1,000-a-bottle cognac slurped by Chinese entrepreneurs? They drink it "as if it were Yangtze River water," according to an Australian business magazine.
Then there's China's first Ferrari (with a $135,000 price tag) and the arrival of one delegate to a recent Guangdong Province Communist Party meeting in a gold-painted Mercedes. Beijing's first international fashion show was attended by Valentino himself—as an official guest of the government!
Such anecdotes are backed by hard numbers: China's economy, recently reclassified as the world's third largest, grew 14 percent in 1992; Guangdong increased 19 percent. Fixed-asset investment leaped 70 percent last year in "sleepy," state-run enterprises, 93 percent in locally run corporations. And, oh yes, citizens have been rioting to get share applications in the burgeoning Shanghai Exchange. (Fifty-thousand Chinese
shareholders are added to the capitalist rolls each week.)
A recent Asian survey claimed the Japanese are the least happy people in the region. Unhappy, maybe, but wealthy definitely: not the frenzy of Malaysia, but a quiet, pervasive and confident opulence that conjures up a giant Switzerland.
Tokyo's Ginza district is closed to cars on Sundays and turns into a massive, upscale shopping mall. Clothes worn for strolling (and being seen) signal heady wages and the ever more valuable yen—and, recession or not, all-day crowds jamming even the
Filofax (personal organizers) store suggest a willingness to spend.
The story is echoed in the boondocks: In little Wajima, the tip of Noto Peninsula, most garages sport two cars. A new-found penchant for big, four-wheel-drive vehicles is causing a problem, though—the need to re-garage Japan. Nissan Terranos and Isuzu Bighorns won't fit in the tiny stalls; walk down a quiet neighborhood street and you'll pass several half-open garage doors with Terrano or Bighorn snouts proudly protruding.
In the midst of all this, we Americans (journalists, policy makers, the man and woman on the street) stubbornly continue to focus on Europe, to the extent that we gaze at all beyond our borders. We are blowing it, and blowing it big, by not eating, sleeping, breathing Asia.
There's never been a worse time to turn inward. Asia, where our trade already exceeds that with Europe, is the teeming center of a huge, sophisticated civilization busting loose. Yet Asians are increasingly dismayed by our attitude: Are we committed to global leadership? Why is the world's richest country (we are) turning isolationist (we are) at the very moment when, after half a millennium, they are breaking out?
After a month on their turf, I share the dismay. Now is the hour to embrace Asia, to revel in its energy, not run and hide. Should Asians become disillusioned and see us as less than trustworthy partners, not committed to the long haul, this matchless economic playground could easily turn into a minefield.
(C) 1993 TPG Communications.
All rights reserved.