Economy of Asia

The economy of Asia comprises more than 4 billion people (60% of the world population), living in 46 different states. In addition to this there are six further states that lie partly in Asia, but are considered to belong to another region economically and politically.

As in all world regions, the wealth of Asia differs widely between, and within, states. This is due to its vast size, meaning a huge range of differing cultures, environments, historical ties and government systems. The largest economy in Asia in terms of nominal GDP is Japan, the smallest East Timor (although there is currently no reliable data for either Iraq or North Korea).

This demonstrates the huge disparity in wealth in Asia, with Japan being the world’s second largest economy, and North Korea being one of the poorest. In terms of Purchasing Power Parity however, the People’s Republic of China has the largest economy in Asia and the second largest in the world, followed by Japan and India as the world’s third and fourth largest economies respectively. South Korea is also one of the largest economies in Asia.

In terms of gross domestic product (PPP), the largest national economy within Asia is that of the PRC (People’s Republic of China). Over the last decade, China’s and India’s economies have been growing rapidly, both with an average annual growth rate over 6%. PRC is the world’s second largest economy after the US, followed by Japan and India as the world’s third and fourth largest economies respectively (then followed by the European nations: Germany, U.K., France and Italy).

In terms of exchange rates (nominal GDP) however, Japan has the largest economy in Asia and second largest of any single nation in the world, after surpassing the Soviet Union (measured in Net Material Product) in 1986 and Germany in 1968. (NB: A number of supernational economies are larger, such as the EU, NAFTA or APEC). Economic growth in Asia since World War II to the 1990’s had been concentrated in few countries of the Pacific Rim, and has spread more recently to other regions.

In the late 80’s and early 90’s Japan’s economy was almost as large as that of the rest of the continent combined. In 1995, Japan’s economy nearly equalled the USA to tie the largest economy in the world for a day, after the Japanese currency reached a record high of 79 yen. However, since then Japan’s currency has corrected and China has grown to be the second largest Asian economy, followed by either India or South Korea at third (depending on the source of information) in terms of exchange rates. It is expected that China will surpass Japan in currency terms to have the largest nominal GDP in Asia within a decade or two.

Trade blocs:
Asia-Pacific Economic Cooperation
Asia-Europe Economic Meeting
Association of Southeast Asian Nations
Closer Economic Partnership Arrangement
Commonwealth of Independent States
South Asian Association for Regional Cooperation
South Asia Free Trade Agreement (proposed)

Natural resources

Asia is by a considerable margin the largest continent in the world, and is rich in natural resources, such as Petroleum and iron.

High productivity in agriculture, especially of rice, allows high population density of countries in the warm and humid area. Other main agricultural products include wheat and chicken.

Forestry is extensive throughout Asia except Southwest and Central Asia. Fishing is a major source of food in Asia, particularly in Japan.

Manufacturing

Manufacturing in Asia has traditionally been strongest in East and Southeast Asia, particularly in PRC, Taiwan, Japan, South Korea and Singapore. The industry varies from manufacturing cheap goods such as toys to high-tech goods such as computers and cars. Many companies from Europe, North America, and Japan have significant operations in the developing Asia to take avantage of its abundant supply of cheap labor.

One of the major employers in manufacturing in Asia is the textile industry. Much of the world’s supply of clothing and footwear now originates in Southeast Asia.

Financial and other services

Asia has three main financial centers. They are in Hong Kong, Singapore and Tokyo. Call centers are becoming major employers in India and the Philippines, due to the availablity of many well-educated English speakers. The rise of the business process outsourcing industry has seen the rise of India and China as the other financial centers.

Economic development

to be completed - dates taken from European version, need to be changed to reflect major economic changes in Asia