Asian-Pacific countries, that is East Asian, South Asian, and Southeast Asian countries, combined have a total population of about 3,730,000,000, or 52% of world population, or about 105 times the current population of Canada. If you laid all of those people end to end, it’d be a lot of people. Total combined GDP in current US dollars is $21.9 trillion or 30% of world GDP with an average growth of 5.5% over the last 20 years. These countries have an average $10,879 GDP per capita compared to $36,123 GDP (both in 2005 US dollars) in Canada. I apologize for all the numbers, but I think it’s important to take stock of the enormous size of these countries and the room for growth that exists.
For more statistics on the Asia-Pacific region click here.
While these large absolute numbers give some background they don’t fully capture what these relationships mean to Canada, so I’m going to through some more numbers. The first is that there are about 4.5 million Canadians with Asian ethnicity. The majority of those are from China and India with the Philippines a close third. That represents 13% of Canada’s overall population. There have also been large flows of immigrants coming from the Asia pacific region with over 100,000 since 1960 coming from China, India, Pakistan, the Philippines, South Korea, Sri Lanka, and Vietnam. Since 2008, the percentage of immigrants coming from Asian countries has been roughly about 50%. These are not inconsequential figures as diaspora ties can have a strong effect on foreign policy decisions. For example, Harper’s decision not to attend the commonwealth summit in Sri Lanka probably had a lot to do with the sizable Sri Lankan community in Canada.
Another important concern for Canada is trade and investment in the Asia-Pacific region. There has been a steady increase of exports to Asia Pacific averaging a 12% increase per year since 2011. In absolute terms there has been $96 billion in imports with another $50 billion in exports from Asia-Pacific in 2013 alone. As a percentage of total imports Asia Pacific represents 16% of Canada’s total imports, with the bulk of products coming from China, Japan, South Korea, and Taiwan. Financial investment by Canada in Asia comes to about $53 billion with most of the money going to Australia, China Japan, Indonesia, and Singapore. Going the other way there is $45 billion coming from Asia to invest in Canada with China, South Korea, Japan, and Australia leading the way. Significant imports from Asia include electronics, automotive products, and mechanics while Canada exports fuel, ore, wood, and agricultural products. Concern for the political situation in Asian countries represents a prudent view. Warning about the risks and opportunities that can come from relations with these countries helps Canada better react to crises, investment risk, and future opportunities for growth.
Black Swans in Asia: the Dance of Nightmares
Now that I’ve quantified the size and impact of Asian countries on Canada, let’s take a look at some areas of concern. Foreign policy to me has generally been an exercise in averting or reacting to crises and in the Asian context there are a lot of black swans (unlikely but highly significant events) that would have serious political and economic repercussions. One of the ongoing issues has been the possible use of nuclear weapons by North Korea. Given the unpredictability and isolation of North Korea it is difficult to gauge where and when this scenario would emerge (my bet is on an attack against Japan) but would seriously destabilize the region home to the second and third largest economies in the world. Along with concerns over the use of nuclear weapons are the issues that could arise if the North Korean regime simply collapsed. Given the huge economic disparity between North and South Korea, the collapse of North Korea would result in a massive refugee crisis, a huge economic shock to South Korea, and a new set of border issues with China that would send waves across the region.
Speaking of border issues in the region, China has a host of border disputes with almost every country in the region. The most recent and heated has been between Japan and China over the Diaoyutai/Senkaku islands in the East China Sea. Other disputes include the border between India and China and the multiple disputes over islands in the South China Sea. The main concern here is that these disputes can harm bilateral ties in the region and represent flash points that can escalate to war. This is not a remote concern as the 1979 Sino-Vietnamese war, 1962 India-China border war, Russian-Chinese border skirmishes, and the various crises across the strait of Taiwan have shown. The second issue with China is short term and long term economic and political instability. The country has become a power house, but a revolutionary change of the political order or economic disaster would create crisis that would seriously affect world financial markets.
The next series of issues are not as world altering but represent problems that continue to plague the region. The first issue is the ongoing insurgencies in Myanmar, the Philippines, and India. These conflicts can lead to increases in refugees, depressed economic performance, and present risks to a variety of Canadian business interests especially in the mining and oil sectors. The second issue which has a more direct effect on Canada is the ongoing problems of drugs and organized crime. Much ink has been spilled over problems of drugs in South America but the Golden Triangle and Asian drug networks seem to be overlooked. Asia has significant producers of heroin and methamphetamines as well as organized crime networks that deal in human smuggling. The third and final issue is that of cyber espionage and intellectual property issues. For instance, in 2009 Google was hacked (most likely by the Chinese) to search for information on Chinese agents under surveillance. Selective enforcement of intellectual property rights and damage from espionage are problems that will affect almost any Canadian business in the region.
Do you think Asia matters? Do you disagree with my assessment? Want to give your two cents on some of these issues? Feel free to leave a comment!
For more analysis and insight watch for future updates.
Featured Photo by Edson Walker.