SINGAPORE (ICIS)--Asia is seeing a convergence of geoeconomic and geopolitical risks which pose a serious threat to growth in the region, said an expert in international affairs on Wednesday.
Per capita income growth in Asia is currently high and relatively consistent, with the region representing more than 60% of world growth, said Jonathan Berkshire Miller, international affairs fellow at the Council on Foreign Relations, speaking at the 13th ICIS Asian Base Oils & Lubricants Conference.
Growth is projected at 5.4% in 2019, after 5.6% in 2018, but at these levels are still substantially below those in the United States and Europe, he noted.
“Keep in perspective this is still historic growth in this region,” he said.
The main risks to growth in the short to medium term are the volatility of financial markets, rising trade tensions, broader competition between the US and China, and the prospect of a slower economy in China, he explained.
“Tension between the US and China is something we’re in for the long term,” he said.
The ageing demographic will also have a dampening effect on growth in the societies of Japan, South Korea, China and Thailand, he added.
The region is looking to digital innovation to drive economic prosperity, but this is a sector where there is concern about a lack of governance, as demonstrated by concerns over 5G, he added.
On the geopolitical side, tariffs and intellectual property are high on the US’s list of concerns.
Freedom of information and protection of privacy (FOIP) is a significant focus for the US in the Indo-Pacific region.
The US National Defense Strategy (NDS) and National Security Strategy (NSS) have identified China as a “strategic competitor.”
Increased military activity, both Freedom of Navigation (FONOPS) activity from the US, and China’s continued placement of its military hardware, are raising geopolitical tensions, he said.
In this context, China’s long-standing Belt and Road Initiative (BRI) is also viewed with mistrust by the Americans.
In contrast to these tensions, there are signs of positivity in the relationship between China and Japan, despite the traditionally high level of mutual suspicion, he concluded.
“China is not wanting to have tensions with the US and Japan at the same time,” he said.
Focus article by Barbara Ortner
Click here to view related stories and content on the US-China trade war topic page