Next for Asia........

As a business consultant, both domestic and international, and also as an inhabitant of the earth with a high level of curiosity, I pay attention to trends, and I have opinions about what is happening in the world. Sometimes my geopolitical opinions are ill informed, but often things come to pass as I expected them to. I plan to post brief summaries of what I think is going on in various regions of the world, starting with the Far East.

Japan: Riddled with debt….highest debt to GDP ratio in the developed world….aging work force…its most skilled workers set to retire in the next 10 years thereby depleting its productivity.  An army bigger than the UK’s.  The biggest navy in the Far East.  That’s a lot of expense. Plus an aging work force that is entering retirement to be supported by the young. Because of the debt, cash flow is important, so the push is more for sales than for profit. 

China: Like Japan, it has a lot of people entering retirement. But it’s worse than that. Basically, the Chinese economy consists of 200 million people. The other 1.1 BILLION live in poverty that is worse than that of the average citizen of Ghana or Kenya. That’s a separate economy, and those people don’t partake of the Chinese economy to which the world has been exposed. Like Japan, China needs to keep the cash moving. It’s getting increasingly hard to do. The average manufacturing wage in China is about 50% higher than the average manufacturing wage in Mexico, so it’s getting harder to compete on price. Profits are shrinking. The Chinese are investing in businesses and natural resources the world over, but don’t take that as a sign of economic strength, but as a confession of economic weakness: why do Chinese invest elsewhere if their economy is going to keep growing rapidly for eternity? It isn’t.

China is trying to build a navy. They want aircraft carriers, but that won’t do any good for them if they have no cruisers and battleships. And all the maritime equipment in the world would be ineffective without admirals. But it takes admirals to train admirals. No, China is WAY behind and is not likely to catch up to American naval power in many years even if the USA ceased advancing technology and building boats. The USA rules the waves all over the world, and outer space as well.  China feels at peril with this, and they are throwing money at the problem, but none of it will do the job.

North Korea: An economic nothing. Can they send bombs to American shores? I doubt it. There is a lot of talk about missiles, but it’s talk.  Makes a good bargaining chip. Helps keep the “Dear Leader, who is a perfect incarnation of the appearance that a leader should have” looking able. Scores points with the forced fan club. I think America basically realizes that the guy wouldn’t be so stupid as to actually send a missile to America (assuming any of them have that proclaimed ability), but Trump can’t gamble on the sanity of Kim Jong Un. The American President can’t afford for a Boeing plant to be obliterated on his watch. So when things look like they need a course correction, the USA turns to China to reign in North Korea. This is good for China: it gives them a way of being valuable to the USA…buys time.

Southeast Asia: This is the future of the region, in my opinion. Very young and educated work force. Singapore, Laos, Vietnam, Cambodia. Also Thailand and Burma. I could throw in Mongolia, but it isn’t southeast. If I was a young man and wanted an adventure, I would seriously look at doing something in that region. Their problem seems to me to be lack of capital, not lack of talent.