Just as the 2020 decade was about to start, the Coronavirus outbreak, now clinically called Corvid 19, has shaken the economic and social foundations of China and reverberated throughout the region.
This is indeed a Black Swan event that caught the world by surprise just when the global economy was about to strengthen in late 2019 with global manufacturing indicators stabilising, the Brexit issue being resolved and warmer U.S.-China relations amid the phase one trade deal on 15 January 2020.
China's top-down communications and public health care systems have come under intense scrutiny and pressure both internally and world-wide. Out of the nation's 1.4 billion people, an estimated 50-60 million people are in a lock-down mode, meaning their movement between urban centres have been curtailed.
If the 2000-2010 decade was the decade of China's rise, will the 2020s decade be vastly different? Every economist and strategist seem to expect China to be the world's largest economy (and possibly No 1 superpower) by this decade while America's economy settles to a 1.5%-2.0% range.
Or will this decade be one of small nations growing more resilient compared to the superpowers? Resilience of a nation in this decade would be more than just the economic sense.
It encompasses a nation overcoming both internal and external challenges to emerge stronger after a crisis, which in the current case, is the high interlocking of small nations's economies to the China trade.
For instance, as a measure of the growing affluence of Chinese tourists, many Asian nations are exposed to China as shown in the table below with Thailand and Hong Kong having the highest GDP exposure.
Or will this decade be one of small nations growing more resilient compared to the superpowers? Resilience of a nation in this decade would be more than just the economic sense.
It encompasses a nation overcoming both internal and external challenges to emerge stronger after a crisis, which in the current case, is the high interlocking of small nations's economies to the China trade.
For instance, as a measure of the growing affluence of Chinese tourists, many Asian nations are exposed to China as shown in the table below with Thailand and Hong Kong having the highest GDP exposure.
Annual Tourist Arrivals* (mil)
Chinese Tourists/ Total Tourists
Tourism Share of GDP
Thailand
35.6
28.0%
13.9%
Hong Kong
27.9
78.0%~
11.1%
Singapore
13.9
19.0%#
5.8%
Malaysia
25.9
12.0%
5.7%
Philippines
6.6
18.0%
3.0%
Indonesia
14.0
4.0%
1.5%
South Korea
13.3
34.0%
1.1%
Japan
28.7
30.0%
0.8%
China
60.7
n.a.
0.3%
* Worldbank, data based on 2017
^ Economist Intelligence Unit
(EIU), 2018
# EIU, data based on the first
11-month of 2019
This suggests Asian policy makers would have to come up with fresh reforms and policies to rebalance and diversify their economies from China during this period.
Despite some fiscal constraints and the ineffectiveness of interest rate cuts (which have been done in the past year), they are in a good position to review their economic and political future.
Clearly, this is a critical time for China as the health and economic crisis will either result in smart reforms for the country's information control and centralisation laws or, in a dramatic way, a collapse and replacement of the Chinese communist regime.
The latter scenario, albeit at a 20% odds, cannot be ruled out and this means Asian governments, especially the ASEAN nations will have to become more integrated before their giant northern neighbor sails into a political storm.
Incidentally, from a wider perspective, China's geopolitical influence and ambitions in the Asia Pacific is currently held in check by the policies of President Trump (whose re-election on 3 November is highly likely provided the American economy doesn't tank).
Therefore, this decade is a great window of opportunity for small nations in Asia to shine in terms of the vibrancy and health of their political, economic and cultural societies.
So the question is, if this unusual hypothesis pans out by the end of the 2020s decade, which Asian nation will be the one that emerges the most resilient and strongest after the China crisis?
Singapore ? (too globalised and small)
Indonesia ? (possible but still too insular)
Malaysia ? (internally lacking in visionary and coherent leaders)
South Korea ? (too large and Korean-centric in outlook)
Thailand ? (too engrossed in domestic political tensions)
Vietnam ? (a potential powerhouse that is watched closely by all)
Nonetheless, despite my reservations (in bracket), all these nations need is a double dose of optimism, courage and an intellectual renaissance to rise above the geopolitical chess games played out between the giant nations (i.e. China, America and to a lesser extent India and Europe) in this part of the world.
