Asia’s Journey at 60, what does independence mean, the promise & perils

What does Independence mean for former colonies

Singapore is the exemplar that pulled itself into the ranks of advanced income status by sheer grit and determination.ST PHOTO: LIM YAOHUI

How its leaders forge cohesion, heal social wounds will be true test of maturity in next 60 years

ON SEPT 16, Malaysia celebrates her 57th national day, having celebrated on Aug 31 the 63rd anniversary of independence from Britain in 1957.

What does Independence mean for former colonies?

It means that a nation is free to choose its own future independent from imperial influence. Lest we forget, colonisation in Asia arrived in the 16th century with Portuguese, Dutch and British pirateers who came, saw and conquered. They did this in the name of their king and Christianity, but it was mostly for their own well-being.

No statistic illustrates this better than the stark fact that India before colonisation in 1700 accounted for 24.4% of world GDP (Maddison, 2007) and by independence in 1947, her share was down to only 4.2% in 1950. Of course, the British left behind the English language, the rule of law and a durable administrative structure that is still being practised in many former colonies.

We should also be grateful that decolonisation (shedding of empires by the European powers) was encouraged by the post-war American administration, which basically did not want any challenges to her dominant status, British cousins or not. The result was that Hong Kong was the last of the colonies to lose her status in 1997. Considering that some Hong Kongers are still waving the Union Jack, colonial nostalgia has not lost all its fans

What matters is what the newly independent countries achieved with their sovereignty. Singapore is the exemplar that pulled herself into the ranks of advanced income status by sheer grit and determination, having almost no natural resources. Myanmar, on the other hand, was richly endowed with natural resources and had one of the best educated elites at independence in 1948. Ruled mostly by the military junta, her growth has been stunted relative to her neighbours.

The Asian Development Bank has just published an excellent book on Asia’s Journey to Prosperity, commemorating 50+ years of its establishment in 1966. The book tracked Asia’s transformation from a post-colonial era of essentially rural Asia to today’s urban and technologically driven region that accounts for roughly half of global growth.

Seen from a 60-year cycle, Asia’s transformation has been world-shattering. In 1960, Developing Asia (ex-Japan) accounted for only 4.1% of world GDP, measured in constant 2010 USD terms. That year, the EU accounted for 36.2% and the United States 30.6% respectively, together 18 times larger.

Japan was already a developed country with 7.0% of world GDP. By 2018, Developing Asia’s share increased six times to 24.0%, on par with the EU (23.2%) and the US (23.9%). This means that including Japan, Asia accounted for 31.5% of world GDP. The global GDP shares for Latin America, the Middle East, Africa and rest of the world were essentially unchanged in the last half century.

In other words, the loss in share of world GDP by Europe and the US between 1960-2018 was largely gained by Developing Asia, of which China was in its own class. China’s GDP grew 84 times over this period, whereas the other three Asian dragons, South Korea, Taiwan and Singapore, grew between 55 to 58 times. By comparison, over the same period, OECD countries, including Japan and Australia, basically grew eight times. Malaysia is in the upper pack, having grown by 35 times.

The secrets of Asia’s successful transformation deserve repeating. During this period, there was peace and general political stability, with Asian governments being fiscally prudent and willing to invest in infrastructure and people. Asia did not follow the “import substitution” model adopted in Latin America but adopted the Japanese export industrialization route. Development essentially came from a young growing population that shifted out of rural agriculture into urban centres, with pragmatic governments working hand-in-hand with markets to create jobs in new industries and services.

This raised the savings and investment levels significantly above that of the rest of the world. The state took care of macroeconomic stability, education, health and infrastructure, preparing the labour force for foreign and domestic enterprises to propell exports and growth.

Those economies that were most open to technology and innovation, including welcoming foreign investment, grew fastest. Initially, income distribution improved, but in recent years, income and wealth inequalities have widened. Furthermore, climate change issues in terms of weather change, impact on water, food and increasing natural disasters are rising in the social agenda. The geopolitical temperature has also risen with the West feeling more insecure.

Currently, China’s rise is seen as the main geopolitical rival for the West, since she is the West’s largest market, biggest supplier, toughest competitor and rival political model. But not far behind China are India and Asean, both with a culturally diverse, younger population, totalling two billion people and a US$5.8 trillion GDP, about to enter into technologically driven, middle-class income levels.

Both South and South-East Asia are about to enjoy the same demographic dividend as China, but it will take competent governments to ensure that the rise to middle and advanced income will be accompanied by good jobs and fair distribution, particularly in the face of growing protectionism, and decoupling in technology and supply chains.

Asia’s growth must be in cooperation with the West, socially, commercially and technologically. But the greatest risks are the neo-con hawks in the West who are willing to risk war to disrupt Asia’s rise.

Put simply, if Asian growth stalls, the world will lose its growth engine.

The rise of Asia for the rest of the century is neither destiny nor pre-ordained. The West will not sit by to see its leadership erode. But as McKinsey’s useful analyses on the Future of Asia opined, “The question is no longer how quickly Asia will rise; it is how Asia will lead.” Leading in a culturally diverse and complex world is not about fighting, but about how to work together, meaning competing and cooperating at the same time. The greatest Asian divide is not technology, but social polarisation driven by race, gender, religion, ideology and health/wealth inequalities, all exposed brutally by the pandemic.

How a new generation of Asian leaders heal these social wounds and move forward without fragmentation and fighting will be the true test of Asia’s maturity in the next 60-year cycle.

Andrew Sheng is a Distinguished Fellow of Fung Global Institute, a global think tank based in Hong Kong. The views expressed here are his own.

Asia News Network

Source link


 Related posts:

Why China manages to develop and rise despite talent outflow

The US needs to ask itself: Nowadays, how many talents worldwide will be less likely to do their research and contribute their wisdom in the US? Can it still provide better education, better jobs and better quality of life? The US had better not be too self-centered and narcissistic.

China must be militarily and morally ready for a potential war

China must be a country that dares to fight. And this should be based on both strength and morality. We have the power in our hands, we are reasonable, and we stand up to guard our bottom line without fear. In this way, whether China is engaged in a war or not, it will accumulate the respect of the world. One day, we will show our natural dignity and power without flexing muscles, and we will win without fighting a war.

Why Western media make malice toward China

Through the efforts of several generations, an open and enterprising China through peaceful development has increasingly won respect and support of the international community. And distorted reporting under the double standards of the Western media will eventually lose every ounce of their credit.

US anti-China politicians' stirring up controversy over Mulan film location just restless clamor

The recent controversies over Disney's filming of its live-action movie Mulan in China's Xinjiang Ugyur Autonomous Region and its credits thanking security and publicity departments in Xinjiang which offered assistance to the filming did not end here. On Friday, a bipartisan group of US lawmakers asked Walt Disney Co. Chief Executive Officer Bob Chapek to explain the company's contacts with Xinjiang during the production of the film.

China, Russia provide more certainty to the world as the US becomes a threat: expert

With the world engulfed by the deadly coronavirus, rising violence and a collapsing international order due to the US, China's State Councilor and Foreign Minister Wang Yi said on Friday that China-Russia relations have become the key force of stability in a turbulent world.


Related posts:

 

Global connection, disconnection, reconnection

In four separate speeches, Secretary of State Pompeo (pic), Attorney General Barr, National Security Adviser O’Brien and FBI Director Wr.

 

 

  China and the Decline of US Power

 The deep historical roots of racism

The #Blacklivesmatter protests have countries around the world examining their own problems with race.

 
 Colonialism

 Why 'Gone With the Wind' should stay on HBO Max - Los ...

Hardwired for global hegemony - American freedom and democracy

Global connection, disconnection, reconnection

In four separate speeches, Secretary of State Pompeo (pic), Attorney General Barr, National Security Adviser O’Brien and FBI Director Wray laid out their case for containing China. But do the US Gang of Four’s analyses of containment of China make global sense?

https://youtu.be/DPt-zXn05ac

This is the age of disconnection. What Covid-19 has done is to show up all the flaws of global connectivity.

The virus travels with human beings and forces us to have periodic lockdowns that disconnects the transmission, buying time to bring it under control. Commenting on the pandemic, US Foreign Affairs magazine laments not only the US failure to prepare, but also the failure to contain: “what is killing us is not connection, it is connection without cooperation.” Touché!

Globalisation was the great connector, created by the unipolar order which saw free trade as beneficial not just to the world, but mostly to itself. But the shift to a multi-polar order made America insecure and everyone else unsure.

A wounded Alpha is always dangerous, emotionally hurt and lashing out on perceived rivals. China as number two falls into that category.

In four separate speeches, Secretary of State Pompeo, Attorney General Barr, National Security Adviser O’Brien and FBI Director Wray laid out their case for containing China. But do the US Gang of Four’s analyses of containment of China make global sense?

Beating the drums of war, decoupling trade and splintering the Internet into a “Clean Net” may sound great for domestic politics, but no one in their right mind can support a nuclear arms race in the midst of a growing global pandemic and possibly the worst economic depression since the 1930s.

The global free trade bargain is very simple - free trade is win-win for all trading partners, but each country must deal with the unequal distribution of trade benefits within its own borders - all about domestic politics.

Disconnecting global trade and free flow of information only increases costs for all, reducing the resources to deal with domestic inequalities.Worse, any arms race is lose-lose for all, diverting scarce resources from fighting pandemics, climate warming and domestic injustices.

History is the best guide to understanding how we got into the mess today.

The story on US politics and economics is well told, but the China story is often undertold. Because of China’s rapid growth from poverty to world number two in 40 years, most historians are still at a loss to explain what this implies for the world as a whole. NUS East Asia Institute Professor Wang Gungwu in his marvelous new book: “China Reconnects (2019)” has given us a clear and easily readable sweep of China’s history and her search to reconnect with the outside world.

Professor Wang has condensed global history into three key centres of power: Mediterranean, India and China.

In 1500, China and India accounted for 48.6% of world population and 49.2% of world GDP (OECD). The Mediterranean powers (broadly including all Western Europe and West Asia) amounted to 17.1% and 22% of population and GDP respectively.

But it was naval power, science and technology that enabled the Western swerve to global dominance, so by 1950, China and India together accounted for 16.3% of world GDP, but 35.9% of the population. Western Europe and USA plus Western offshoots accounted for 19.1% of global population, but 56.8% of world GDP.

This neglect of maritime power caused India to be colonized by the 18th century, and China nearly gobbled up by the 19th century.

China’s engagement with the world was mostly through the Silk Road, with Indian Buddhism being the major foreign cultural influence on China. The Silk Road flourished during the Tang Dynasty (618-907 AD), but the Mongol empire in the 13th-14th century connected China not only to Europe, but also to Mughal India.

However, the arrival of Western traders through South-East Asia after 1500 accelerated China’s trade with the West (including cross-Pacific trade with Latin America through Manila). Only in the 20th century did China begin to appreciate that the key instruments of Western power came from maritime power and ability to enforce international law.

In Chapter 2 of “Behind the Dream, ” Professor Wang skillfully weaves the story of post-dynastic China, when Chinese intellectuals struggled to understand modernity. It was the Japanese invasion that sparked Chinese nationalism, culminating in the civil war that enabled the Communists to unite the country with the founding of the People’s Republic in 1949.

The story of Chairman Mao, Deng Xiaoping and the policy choices of President Xi Jinping is told with verve and deep insight, without the usual Western baggage of seeing personalities in black and white.

China’s admiration for the West is defined in Chinese names for the leading powers – heroic England, beautiful America, legal France and virtuous Germany. Hence, the reforms in the last 40 years were all about reconnecting to the West through trade, investment, technology and people. But as China became deeply entangled in globalisation as the world’s largest manufacturer and trading partner, there grew an internal awareness that continued development would have to rely on internal stability and order, as well as external security. Stability was premised on a strong Party, and as Professor Wang put it, “the country’s integrity rests on the capacity to defend its borders even from the world’s sole superpower.”

Professor Wang goes deep into Chinese philosophy and political history to find China’s roots into the new world order.

The book’s real contribution is in explaining China’s shift from the Old World to the New Global. Here, China’s interaction with the South, especially with the Association of Southeast Asian (Asean) countries, will play crucially in the next phase of development of the New Global.

Asean comprises 600 million people and over US$2.5 trillion in GDP, with great cultural diversity, natural resources and a strategic zone that holds the key to global trade between the West, South Asia, China and Northeast Asia. The South China Sea cannot afford to be balkanized because it was Great Power struggles that made the Balkans an unstable region for Europe and the Near East for over a century.

As the US tries to disconnect, China Reconnects is a tour-de-force for us to understand current developments from the lens of philosophy and history. Professor Wang writes with eye-popping clarity, dosed with empathy, to guide us through the fog of uncertainty. Unfortunately, reconnection takes two to play. Whether the next US President will attempt to connect or disconnect will be the question of the century.

Andrew Sheng is a Distinguished Fellow of Fung Global Institute, a global think tank based in Hong Kong.The views expressed here are the writer’s own.

Source link

Related news:

First into virus slump, China proving fastest recovery

  

Launching new cold war harder than diffusing one: Global Times editorial

China's ability to diffuse any new cold war is more than the US' ability to launch one. 

Confucius Institute label shows US a petty superpower: Global Times editorial

The US is the most petty-minded of all big powers. Many Western countries have Confucius Institutes, but only the US, the world's sole superpower, feels threatened. Where is the US' confidence? Where is its cultural tolerance?

Related posts:

'We lied, we cheated, we stole', ‘the Glory of American experiment’ by US Secretary of State/Ex-CIA director Mike Pompeo

US president’s move to get a cut from TikTok as an ‘extortion threat’ and ‘mafia deal’

Washington robs TikTok by treading upon rules TikTok for Business: What is TikTok Anyway?   ByteDance investors value TikTo..

China's Covid-19 vaccine will be available for all, could be ready for public use early next year

China will make its Covid-19 vaccine a global public good when it is ready for application after successful research and clinical trials,

How to use BeiDou navigation system on your phone

China has just announced the completion and launch of its BeiDou-3 Navigation Satellite System. But, how can we use it? CGTN recently ...

Other:

The essence of China’s restraint is self-confidence, not timidity



Why is Pompeo so obsessed with China?

China in the Asian century, Is the future truly Asian?

As China continues to develop, so does its global influence. What would the future be like for South-East Asia with a ‘risen China’?

Rising together: No, Chinese imperialism is not simply replacing US imperialism, as China emphasises win-win partnerships, says Prof Zhang. — Handout

China in the Asian century

PROF Zhang Weiwei is among the most respected scholars in China today. He is a leading expert on China’s “reform and opening up” policies and its status as a “civilisational state.”

As director of the China Institute at Shanghai’s elite Fudan University, he is also professor of International Relations and had served as English interpreter for China’s Paramount Leader Deng Xiaoping. In an exclusive interview earlier in the week, Prof Zhang spoke to Sunday Star about future prospects with China.

As the leading authority on China’s civilisational state, how would you define it, as distinct from a nation state?

With China, it’s a combination of the world’s longest continuous civilisation and a super-large modern state. A civilisational state is made up of hundreds of states amalgamated into one large state.

China is a modern state respecting international law like a nation state, but culturally diverse, with sovereignty and territorial integrity.

There are four features of China’s civilisational state: a super-large population of 1.4 billion people, a continent-size territory, significant culture, and a long history.

If we are returning to an East Asian tributary system, what changes can we expect in China’s policies in this region today?

The tributary system is a Western name for China’s relations in this region (in the past). China is a “civilisational” – as an adjective – state, a modern amalgamation of many (component communities).

During the Ming Dynasty, China was a world power – but as a civilizational state more than a nation state – and did not seek to colonize other countries, unlike Western powers that were nation states. Since then, China’s status and capacity as a nation state has grown significantly. Will it then become more like Western powers now?

China today is a nation state, but different from European (nation) states. It is also still a civilisational state.

The Chinese people are not just Han, although the Han majority is 92%. There are 56 ethnic groups in China, (mostly) minorities.

But China rejected the Permanent Court of Arbitration’s ruling on the South China Sea, initiated by the Philippines, which found China’s claims insupportable.

The tribunal was illegal; it had no right to make such decisions. The Permanent Court of Arbitration is not part of the United Nations.

How can countries in South-East Asia be convinced that the rise of China will not simply result in Chinese imperialism replacing US imperialism?

China emphasises win-win partnerships, such as in the Belt and Road Initiative (BRI). It encourages discovering, building, and benefiting together.

Countries in South-East Asia join the BRI out of their own interest. It is not something imposed by China.

Some countries have described the Second Belt and Road Summit this year as being more consultative than the first. As for the future?

The future Belt and Road Summits will be even more open and consultative.

Is the current US-China trade dispute only a symptom of much larger differences, such as a historic divide in the reshaping of a new global order?

It is more than about trade. With the United States especially, it is zero-sum, but for China it is win-win.

The Chinese economy is larger than the US economy, or soon will be. (In PPP or purchasing power parity terms, China’s economy grew larger than the US economy in 2014.)

The United States is trying to decouple its economy from China’s. How can China ensure that it would not only withstand these efforts but also triumph?

The attempt to decouple the two economies will fail. About 85% of US companies that are already in China want to stay.

Looking at the trade structure, most Chinese exports to the US are irreplaceable. No other place in the world gives a better price-quality ratio in manufactured goods.

So the US cannot win in this decoupling because there are no alternatives (as desirable producing countries). China has the world’s largest chain or network, or factory clusters, for all kinds of goods.

How likely do you see a hot war – more than a trade war or a cold war – breaking out between a rising China and what is perceived to be a declining United States?

The US knows that it won’t win (a hot war). No two nuclear-armed countries will go to war. It would be very messy.

So far no two nuclear-armed countries have fought. There may be a small likelihood of direct confrontation, but not a war situation.

No commercial shipping has been interrupted by China. So the US need not worry.

Can Asean, or an Asean country like Malaysia, help to bring the United States and China closer together as partners rather than as rivals?

Possibly. Malaysia perhaps can help, as it is friendly to both China and the US.

As China continues in its rise, what steps is it taking to provide for more cooperative and consultative relations in this region?

Trade between China and Asean countries, for example, has grown, and has now exceeded China-US trade.

Generally, China’s relations with Asean countries are quite promising, with Free Trade Area relationships as well.

By Bunn Nagara, who is Senior Fellow at the Institute of Strategic and International Studies (ISIS) Malaysia.

Source link

Poised for growth: Shipping containers sit stacked next to gantry cranes at the Yantian International Container Terminals in Shenzhen, China. — Bloomberg

Is the future truly Asian?

 

The Region, while growing fast, faces issues such as youth joblessness, climate change and income gaps

THIS is a question that is at the heart of the tensions across the Pacific.

To Parag Khanna, author of The Future Is Asian (2019), the answer is almost self-evident.

However, if you read his book carefully, you will find that he thinks global power will be shared between Asian and Western civilisations

For the West, the rise of Asia has been frighteningly fast, because as late as 1960, most of Asia was poor, agricultural and rural, with an average income per capita of less than US$1,000 in 2010 prices.

But 50 years on, Asia has become more urban and industrialised, and is becoming a challenge to the West in terms of trade, income and innovation.

Global management consulting firm McKinsey has just published a study on “The Future is Asian” that highlights many aspects why Asia is both attractive to businessmen and yet feared as a competitor.

Conventionally, excluding the Middle East and Iran, Asia is divided into North-East Asia (China, Japan and South Korea), South-East Asia (mostly Asean), South Asia (India, Pakistan, Bangladesh) and Central Asia.

But McKinsey has identified at least four Asias that are quite complementary to each other.

First, there is Advanced Asia, comprising Australia, Japan, New Zealand, South Korea and Singapore, each with per capita incomes exceeding US$30,000 (RM125,600), highly urbanised and rich, with a combined GDP that is 10% of global GDP.

This group provides technology, capital and markets for the rest of Asia, but it is ageing fast.

Second, China is the world’s largest trading economy, second largest in GDP after the United States, and a growing consumer powerhouse. By 2030, the Chinese consumer market will be equal to Western Europe and the United States combined.

China is also an increasing capital provider to the rest of the world.

Third, the 11 countries of Emerging Asia (Asean plus Bhutan and Nepal, excluding Singapore) have young populations, fast growth and cultural diversity.

Fourth, Frontier Asia and India – covering essentially South and Central Asia including Afghanistan – which have 1.8 billion in population, still rural but young.

Taken together, these four Asias today account for one-third of global GDP and 40% of the world’s middle class.

But what is remarkable is that while the region grew from trading with the rest of the world, intra-regional trade has grown faster, to 60% of total trade, with intra-regional foreign direct investment (FDI) at 66% of total inward FDI, and 74% of air traffic.

Much of Asian growth will come from rapid urbanisation, amid growing connectivity with each other. The top 20 cities in Asia will be mega conglomerates that are among the largest cities in the world with the fastest-growing income.

A major finding is that America First-style protectionism is helping to intensify the localisation and regionalisation of intra-regional connectivity in terms of trade, finance, knowledge and cultural networks.

Furthermore, the traditional savings surpluses in Asia basically went to London and New York and were recycled back in terms of foreign direct investment and portfolio flows.

But no longer.

Increasingly, Asian financial centres are emerging to compete to re-pump surplus capital from Advanced Asia and China to fund the growth in Emerging and Frontier Asia.

In short, intra-regional finance is following intra-regional trade.

In a multipolar world, no one wants to be completely dependent on any single player but prefers network connectivity to other cities and centres of activity and creativity.

As Khanna puts it: “The phrase ‘China-led Asia’ is thus no more acceptable to most Asians than the notion of a ‘US-led West’ is to Europeans.”

But are such rosy growth prospects in Asia predestined or ordained?

Based on the trajectory of demographic growth of half the world’s young population moving into middle income, the logical answer appears to be yes.

But there are at least three major bumps in that trajectory.

First, Asia, like the rest of the world, is highly vulnerable to global warming.

Large populations with faster growth mean more energy consumption, carbon emissions and natural resource degradation. Large chunks of Asia will be vulnerable to more water, food and energy stresses, as well as natural disasters (rising seas, forest fires, pandemics, typhoons, etc).

Second, even though more Asians have been lifted out of poverty, domestic inequality of income and wealth has increased in the last 20 years.

Part of this is caused by rural-urban disparities, and widening gaps in high-value knowledge and skills. Without adequate social safety nets, healthcare and social security, dissatisfaction over youth unemployment, access to housing, and deafness to problems by bureaucracies has erupted in protests everywhere.

Third, geopolitical rivalry has meant that there will be tensions between diverse Asia over territorial, cultural and religious differences that can rapidly escalate into conflict. The region is beginning to spend more on armaments and defence instead of focusing on alleviating poverty and addressing the common threat of climate change.

Two generational leaders from the West have approached these threats from very different angles.

Addressing the United Nations, 16-year-old Swedish schoolgirl Greta Thunberg dramatically shamed the older generation for its lack of action on climate change.

“People are suffering. People are dying. Entire ecosystems are collapsing. We are at the beginning of a mass extinction and all you can talk about is money and fairy tales of eternal economic growth. How dare you, ” she said.

The young are idealistically appealing for unity in action against a common fate.

In contrast, addressing the UN Security Council, US President Donald Trump was arguing the case for patriotism as a solution to global issues. Climate change was not mentioned at all.

Since the older generation created most of the carbon emissions in the first place, no wonder the young are asking why they are inheriting all the problems that the old deny.

This then is the difference in passion between generations.

Globalisation occurred because of increasing flows of trade, finance, data and people. That is not stoppable by patriot-protected borders.

A multipolar Asia within a multipolar world means that even America First, however strong, will have to work with everyone, despite differences in worldviews.

All patriots will have to remember that it is the richness of diversity that keeps the world in balance.

The writer ANDREW SHENG is a distinguished fellow with the Asia Global Institute at the University of Hong Kong. This article is part of the Asian Editors Circle series, a weekly commentary by editors from the Asia News Network, an alliance of 24 news media titles across the region.

Source link


 
Read more:

China in the Asian century - Chinadaily

 

 

 Related posts:

Live: Grand celebration honoring 70th anniversary of PRC's founding 庆祝中华人民共和国成立70周年

https://youtu.be/X_Z9QE4EblY https://youtu.be/dit7zmnzAh0 Highlights: China celebrates 70th anniversary with biggest ever military ...

NO POWER, NO FORCE CAN STOP THE PROGRESS OF THE CHINESE PEOPLE AND NATION

https://youtu.be/Uv0PeiGWJyg Xi addresses grand rally to celebrate PRC's 70th founding anniversary https://youtu.be/P5ZseKvFgEk ...

China's October Revolution - a parade of strength and pride to show country’s ability to maintain peace

https://youtu.be/KL9UgfTjR8Q China to hold its largest military parade, boasting new weapons and equipment at its anniversary EVERYT...

Hong Kong in decline

2019 - The rise of the quantum era

US President Donald Trump discards staff like changing shirts and reverses policies without any forewarnings to staff or supporters alike. This behaviour is described by Armenian President Sarkissian, a quantum physicist-turned-politician, as quantum politics. afp -  

2019: The rise of quantum era

The Phnom Penh Post 

THE year 2018 was an exhausting one, but it marked the exhaustion of the old neo-liberal order, willingly dismantled by President Donald Trump to the aghast of friends and foes alike.

We seem to live at the edge of chaos, in which every dawn is broken by tweets that disrupt the status quo. There are no anchors of stability. Trump discarded staff like changing shirts, and reversed policies without any forewarnings to staff or supporters alike.

This behaviour was described by Armenian President Armen Vardani Sarkissian, a quantum physicist turned politician, as quantum politics.

Most of us use the term quantum to mean anything that we cannot understand. The reason why we find quantum concepts weird is that they do not conform with normal logic. As Italian physicist Carlo Rovelli explains it, “Reality is not what it seems”.

Human beings live at the macroscopic scale, which we observe from daily life. We like stability and order. But at the beginning of the 20th century, Albert Einstein and Nils Bohr changed the way physicists thought about how nature behaved. Quantum physics evolved from the study of the behaviour of atoms at the microscopic scale.

Order is only one phase in the process of evolution.

And since the 1980s, quantum science has expanded beyond physics to neuro-science, information computing, cryptography and causal modelling, with great practical success.

Like the iPhone, most people don’t know how it works, but quantum mechanics does work in practice.

The first quantum concept is that it is probablistic, not deterministic. In simple language, there is no such thing as certainty, which classical science, religion and our normal instincts teach us to believe. In the beautiful language of Rovelli, “quantum fields draw space, time, matter and light, exchanging information between one event or another. Reality is a network of granular events, the dynamic which connects them is probabilistic; between one event and another, space, time, matter and energy melt in a cloud of probability.”

Second, Bohr defined a dualistic property of quantum situations called complementarity. Light is both a particle and wave, not either/or. This concept of complementarity leads to the famous Heisenberg’s uncertainty principle, which basically says that the position and velocity of an object cannot both be measured exactly and simultaneously, even in theory. If everything in the world comprises atoms and photons moving constantly, nothing can be measured exactly – the principle of indeterminacy.

The third concept is relational, in that everything is related to something. There are no absolutes, just as there is no certainty. Everything exists relative to something else. Quantum entanglement occurs when pairs or groups of particles interact with each other so that the quantum state of each particle is somehow related to the state of the other(s), even across great distances.

This phenomenon is popularly called the butterfly effect, which dramatically says that a butterfly flapping its wings may cause a typhoon across the Pacific. Einstein called entanglement “Spooky Action at a Distance”, and he tried hard to disprove it. But these effects were empirically verified in the 1970s.

Quantum physics is moving to centre stage because quantum information theory led to the invention of quantum computing. Until recently conventional computers use binary “bits” (one and zero) as the process for calculation of information. But a quantum computer uses quantum bits, called qubits, which can exist in both states simultaneously, and in so doing, it can process information faster and more securely than conventional computers.

This breakthrough means that quantum computing will transform artificial intelligence, deep learning and advance technology at speed, scale and scope that rivals anything we have witnessed in the world of classical computing. The goldmine of quantum computing is going to make fortunes for everyone, but he who controls the infrastructure (or pipes) across which quantum computing will be conducted will be the big winner.

Information Age

In the Information Age, knowledge, technology and knowhow is more valuable than gold. Central bank monetary creation as well as cyber-currencies like bitcoin, are quantum money, because the marginal cost of production of such “money” is near zero.

We are all so dazzled by such marvellous creation that many investors moved into the alchemy of asset price bubbles. It is no coincidence that the South Sea and Tulip bubbles occurred in an era of great “displacement”, when 17th century investors (including Isaac Newton) had no clue how to price massive returns from new companies colonising the South Seas, or the technological rarity of creating a black tulip.

In qubit terms, hard assets and soft/virtual liabilities are quantumly entangled with each other. If you can generate quantum liabilities at near zero cost, you can control and increase real assets to the disadvantage of your competitors. Put crudely, with a quantum computer and deep learning, you might be able to generate a drone-sized nuclear bomb using 3D printing at very low cost.

Or even more bluntly, you can do this under quantum encryption that the incumbent powers do not even know what you are doing.

It is therefore no coincidence, that the Western Deep States moved quickly against Chinese enterprises ZTE and Huawei, because these two have been big developers and users of quantum computing. First, deprive the competitor from access to the key high-tech fast chips that enable quantum computing to perform at speed. Second, disrupt the management and key talent that would enable such quantum capacity to be operationalised. Third, prevent them acquiring market share to an entrenched level, so that you have time to bring your own technology up to speed.

All these suggest that if you think in Thucydides Trap terms (classical arms race to nuclear war), we will all end up in nuclear mutual destruction.

If quantum thinking is a more “natural” way of thinking about our physical world and human behaviour (since our brains appear to neurologically work in quantum terms), then it means that we need to get rid of old classical thinking and mental traps. The real challenges to global prosperity and survival are climate change, social injustice, corruption, crime and disruptive technology, but mostly outdated mindsets. We need to think through these challenges in quantum terms, which means very new and weird ways of thinking round these obstacles.

Discarding old mindsets is never easy. But mankind has always thrived on getting new solutions to old problems, perhaps this time through a quantum frame of mind. On that optimistic note,

Happy New Year to all!

By Andrew Sheng - Think Asian- Tan Sri Andrew Sheng writes on global issues from an Asian perspective.

Related:

TECH NEWS:  Is quantum computing a cybersecurity threat?

The photo shows electronics for use in a quantum computer in the quantum computing lab. Describing the inner workings of a quantum computer isn’t easy, even for top scholars. — AP

Related posts

China successfully launched world's first quantum communication satellite 'very exciting' !

China launches satellite for space-based free Internet broadband and free wifi worldwide

Chinese scientists make quantum leap in computing; jumbo passenger jet C919 liftoff !

China to build world-leading national laboratory for quantum information sciences

Battle for global 5G mobile phone technology the real reason for Huawei CFO arrest

Unfolding future innovation: a look ahead at 2019's tech trends

5G connectivity promises faster Internet speeds and more efficiency to run complex tasks in the cloud. — 123rf.com   https://youtu.b...

Open society and closed minds, Trump bragging as UN Laughs at him

 'Leadership has always been about generosity to those who are less well endowed and fortunate than you are. Often, it is not generosity of kind, because that would be buying of votes, but generosity of spirit.' - Tan Sri Andrew Sheng

WHY is it that in the last days of September, 10 years after the failure of Lehman Brothers, the world feels as if it is a dangerous place?

Bankruptcy of Lehman Brothers - Wikipedia

The filing for Chapter 11 bankruptcy protection by financial services firm Lehman Brothers on September 15, 2008, remains the largest bankruptcy filing in U.S. history, with Lehman holding over US$600,000,000,000 in assets. Wikipedia

President Trump’s remarkable speech to the United Nations this week was supposed to re-state the New Order that America has envisioned for the world. And all he got was a laugh.

https://youtu.be/Dqao0PqMgnE

But it was an important speech, because it spelt out more clearly what everyone knew since January 2017 – his Administration is dismantling what America has stood for since the Second World War.

Out goes the vision of a liberal rule-based stable world under US leadership. What replaces it is a “no holds barred” reality show of bilateral “Art of the Deal” negotiations supposedly to solve what is paining America. Never mind the collateral damage on everyone else, even if they are ultimately American consumers. What everyone heard is that the White House does not care too much about allies or enemies, only what is good for America First, trumped by the speaker’s ego.

Speeches to the United Nations has never been about foreign policy. Speaking in front of 193 member countries, the national leader is actually addressing his home audience, a photo-opportunity to show that as a member of the United Nations, your voice is heard by the whole wide world. Accordingly, other than the famous 1960 case of Soviet Leader Khruschev making his point by banging his shoe at the podium, most national leader speeches to the United Nations are boring homilies. They tend to praise themselves, pay due respect to the UN, and expound what Miss Congeniality says in all beauty contests, “world peace!”

What we got instead from President Trump was raw and edged, “America’s policy of principled realism means we will not be held hostage to old dogmas, discredited ideologies, and so-called experts who have been proven wrong over the years, time and time again.” That statement made a powerful indictment of “experts”, because his supporters feel that it is the elite experts that have run the country for 70 years who have let them down.

If America is doing so well economically, militarily and technologically, why should her middle class feel so insecure? And it is lashing out at everyone else.

The answer lies in not what the speech said, but what it omitted. Everywhere in the world, not least in America, the greatest existential concerns are inequality and climate change. Almost nothing was said about both issues, which are stressing societies and pushing immigration from poorer neighbours across borders to richer nations with cooler climates.

Instead, what was decided was non-participation in the Global Compact on Migration, withdrawal from the Human Rights Council and non-recognition of the International Criminal Court. There was also a barrage against Opec, which contains some of the US’s strongest allies. If other bodies like the World Trade Organisation or even the United Nations do not do America’s bidding, then the cutting of funds or withdrawal is a matter of time. Does that imply that the US will now veto every World Bank or IMF loan to members that she does not like?

In short, it is all about anti-globalisation. In the same breath that “We reject the ideology of globalism, and we embrace the doctrine of patriotism,” Trump appeals to the passion and pride of nationalism. “The passion that burns in the hearts of patriots and the souls of nations has inspired reform and revolution, sacrifice and selflessness, scientific breakthroughs, and magnificent works of art.”

Never mind if a lot of that sacrifice and selflessness was by immigrants and new arrivals.

Outsiders who used to admire America as an open society founded by immigrants with new ideas on how to build a more just society and free economy find instead one that has an increasingly closed mind to global issues. It does seem strange that American innovation, entrepreneurship and dynamism which drew continuously on new talent initially from Europe and then the rest of the world is now walling up its borders, physically, legally and mentally.

There are 40 million immigrants in the US today, representing 13% of the US population. Immigrants founded nearly one-fifth of the Fortune 500 companies, such as Google, Procter & Gamble, Kraft, Colgate Palmolive, Pfizer, and eBay. Today, much of Silicon Valley talent feel like working in the United Nations, diverse, noisy and creative.

The irony of America drawing on global talent and resources is that she has no need to pay for it from exports, but can easily print more dollars. In other words, the Grand Bargain of global trade was the ability of the US to pay for real goods and services with something that can be printed at near zero marginal cost. Even the Europeans are now creating a separate payment system outside the US dollar dominated SWIFT system to avoid being punished for “trading with the enemy”.

When contracts of trust are being renegotiated, no one can feel at ease. One can never solve global problems unilaterally or even bilaterally, let alone calls for more national patriotism. And as the English writer Samuel Johnson scribbled in 1775, a year before US independence from Britain, “patriotism is the last refuge of a scoundrel.”

Leadership has always been about generosity to those who are less well endowed and fortunate than you are. Often, it is not generosity of kind, because that would be buying of votes, but generosity of spirit.

This side of the Pacific, there is awareness that the tensions will not go away with Trump or a change in the November elections. What has happened is that the US establishment has put political interests ahead of economic interests, which means that any settlement will have to go beyond economic considerations.

If trade and political tensions are in for the long haul, can the current US market enthusiasm have sufficient strategic patience?

Now we understand why no one is laughing.

Credit; Think Asian Andrew Sheng

Tan Sri Andrew Sheng writes on global issues from an Asian perspective.

Related posts:

 

After laughs at Trump, globalism or patriotism? 

https://youtu.be/rewri7OdEZA https://youtu.be/QqZv3SLx1oI US-ROK trade: 'horrible' to 'wins'? US President Don..

 

Lehman report blames execs, auditor

 

Lehman Sues JPMorgan for Billions of Dollars in ‘Lost Value’

 

Paid to Fail

 

Wall Street shenanigans

 

How will JPMorgan's $2 billion loss affect American banking rules? Senior executives to leave!

From Industrial 4.0 to Finance 4.0

https://youtu.be/Gs4_eurnrtU


https://youtu.be/GMMfxVxdlSM

https://youtu.be/Wkp5a7RZOsQ

MOST people are somewhat aware about the Fourth Industrial Revolution.

The first industrial revolution occurred with the rise of steam power and manufacturing using iron and steel. The second revolution started with the assembly line which allowed specialisation of skills, represented by the Ford motor assembly line at the turn of the 20th century.

The third industrial revolution came with Japanese quality controls and use of telecommunication technology.

The Fourth Industrial Revolution, or first called by the Europeans Industry 4.0, is all about the use of artificial intelligence, robotics, genomics and process, creative design and high speed computing capability to revolutionise production, distribution and consumption. Finance is a derivative of the real economy – its purpose is to serve real production. Early finance was all about the finance of trade and governments to engage in war.


It is no coincidence that the first central banks (Sweden and England) were established in the 17th century at the start of the First Industrial Revolution. Industrialisation became much more sophisticated as Finance 2.0 brought the rise of credit and equity markets in the 18th and 19th centuries. Industrialisation and colonisation came about at the same time as the globalisation of banks, stocks and bond markets.

Again, with the invention of first the fax machine, then Internet that speeded up information storage and transmission in the 1980s, finance and industry took a quantum leap into the age of information technology. Finance 3.0 was the age of financial derivatives, in which very complex (and highly leveraged) derivatives became so opaque that investors and regulators realised they became what Warren Buffett called “weapons of mass destruction”. Finance 3.0 stalled in 2007 with the Global Financial Crisis and was only propped up with massive central bank intervention in terms of unconventional monetary policy with historically unprecedented interest rates.

We are now on the verge of Finance 4.0 and it may be useful to explore what it really means.

The common definition of Industry 4.0 is the rise of the Internet of Things, in which cloud computing, artificial intelligence and global connectivity means that cyber-physical systems can interact with each other to produce, distribute and trade across the world in a massively distributed system of production.

But what does Finance 4.0 really mean?

What truly differentiates Finance 4.0 from the earlier version is the arrival of Blockchain or distributed ledger technology. The best way to think about the difference is the architecture of the two different systems.

Finance 3.0 and earlier versions were all about a top-down or hierarchical ledger system, like a pyramid, in which trade and settlements between two parties are settled across a higher ledger.

A simple example is payment from Joe in bank A to Jim in bank B is finally settled across the books of the central bank in local currency. But in international trade and payments, the final settlements (at least more than 60%) are settled in US dollar finally across the ledgers of the Federal Reserve bank system.

Finance 3.0 was not perfect and those who wanted to avoid regulation, taxation or any official oversight basically moved trading and transactions off-balance sheet and also off-shore. This was the “shadow banking” system that financial regulators and central banks conveniently blamed on their failure to see or stop the last global financial crisis.

Although technically the shadow banking system is the non-bank financial system, which would include bond, stock and commodity markets, the bulk of illegal, illicit transactions traditionally was done in cash.

Welcome to the technical innovation called cyber-currencies, which was made possible for peer-to-peer (P2P) transactions across a distributed ledger system (commonly known as blockchain). In architectural terms, this is a bottom-up system which technically can avoid any official oversight. Indeed, cyber-currencies or tokens were invented precisely because the users do not trust the official system.

As the populist philosopher Stephen Bannon said, “central banks are in the business of debasing the currency”. Hence, those who want to avoid the debasement of their savings prefer to deal with either cash or cyber-tokens like bitcoin (pic).

What is happening in the rapidly evolving Finance 4.0 is that as the world moves from a unipolar order to a multi-polar world in which other reserve currencies also contend for trade and store of value, the top-down architecture is fusing (or merging) with a bottom-up architecture in which trade, transactions and stores of value are shifting towards the P2P shadow system.

Why this is taking place is not hard to understand. Post-global financial crisis, the amount of financial regulations have tripled in terms of number of rules and complexity on what the official sector can regulate, which is mostly the banking system. It is therefore not surprising that all the innovation, talent and money are moving to outside the banking system into the asset management industry, which is much more lightly regulated.

No talented banker, however dedicated to the values of banking probity, can resist the temptations of working in asset management, away from the heavily regulated environment where he or she is 24x7 under regulatory internal and external oversight.

Another reason why the cyber-P2P business is flourishing is because the official sector is worried that further regulation would hinder innovation. But those who want to increase the complexity of regulation must remember that for every 50 foot wall, someone will invent a 51 foot ladder.

So competition in the 21st century has already moved from the physical and financial space into cyber-space.

If there is one thing I learnt as a former regulator, it is that if the banks are behind the curve in terms of technology, the regulators are even further behind, since they learn mostly from those whom they regulate. But if financial regulators deal with financial innovation through “regulatory sandboxes” where they allow their regulated banks to experiment in sandboxes, they are treating their regulated institutions as kids in an adult game of ruthless technology.

Time for the official sector to make their stand clear or else Finance 4.0 promises to be very different from the orderly world that they are used to imaging. Nothing says this clearer than a recent survey by the Chartered Financial Analyst Institute, which showed that 54% of institutional investors surveyed and 38% of retail believe that a financial crisis in the next one-three years is likely or very likely.

You have been warned.

- Tan Sri Andrew Sheng writes on global issues from an Asian perspective.


Related

With blockchain’s rise, regulators must keep up with Industry 4.0 or lose control

 

With blockchain's rise, financial regulation must keep up with Industry ...

 

How Industry 4.0 will change accounting - Journal of Accountancy

 

Finance 4.0: Mastering the Fourth Industrial Revolution | Oracle ERP ...

 

Five ways Industry 4.0 financing unlocks productivity bonus - YouTube

 

Related posts:

 

What is Blockchain Technology, its uses and applications?

 

BLOCKCHAIN beyond Bitcoin

 

On Mcoin, Bitcoin and points of investment