Saturday, 6 October 2012

Will the Asian century matter?

With the economic rise of China, India and smaller southeastern Asian countries (such as the 4 Asian tigers), the 21st century is expected by many to be the Asian century. However, with Overshoot about to bite down and forced relocalisation to begin, will this actually matter for Australia? As international trade/transport declines, what will it matter if Asia’s economy (or only parts) is booming? As local industries that are integrated into local markets that have re-emerged and imports/exports decline in importance, what does it matter if some other economy is growing? As the decentralising effects of renewables changes the structure of our economy, how will the centralisation model of superpowers work?

While I doubt that the Asian century will happen as predicted due to Overshoot, lets imagine it does. So let us see what some of the possible factors to the answer for the question above are.

As international transport capacity falls, it will not matter how much Asia produces since a bottleneck has been formed (without even taking into account lack of resource shipments to Asia).  Now international transport capacity is not functionally limited and the limiting factors are in other sectors of the economy. But peak oil will change that by lowering utility (via slower speeds, less ships and more expensive transport) of the current system and hampering the ability of creating a new one. The direct adaptation is relocalisation. For Australia and New Zealand, this effect will be even more pronounced due to our isolation. Asia will become more relatively important since they are closer, while their absolute importance declines, so at the beginning it could matter but as transport continues to decline it will eventually decline with it.

Relocalisation will directly challenge globalisation, which the Asian century is based upon by removing mass imports/exports. This will involve the direct revival of local manufacturing in Australia to use our abundant local resources and to fulfil local needs. Thanks to peak oil, the rise of rise of renewably powered industry is assured and the shift in structure it brings. These industries are, however, limited when compared to modern industries and won’t have the productive power of the industries in Asia, luckily that won’t matter as much since they aren’t exporting industries.

Renewable energy is, relative to non-renewables, inherently decentralised and drives industry to be located over a large area instead of being concentrated in small areas. The reason for this is quite simple, renewable energy is available over large areas, and is acutely vulnerable to concentration losses. While non-renewables come in a concentrated form and, barring uranium, easy to transport. Since our economy will downscale anyway, having many small manufactories instead of one or two big factories would work fine. This reduces reliance on Asia for manufactured goods. While the imports remain they will be increasingly restricted to either capital goods and the rich until everything of importance is made locally.

So does the Asian century matter to us?


  1. Hey guys,

    Sorry, I just don't know enough about trade routes to add anything much to this weeks or last weeks blogs.

    Piracy may be a serious issue in a resource and energy starved world. It may also be important for transports to be negotiated through otherwise hostile territory as has happened in the past. Dunno really, but I enjoyed reading your thoughts on the matter as it is a big problem.

    The recession in the early 90's was tough for me because in my first full time job I was made redundant and with 10% unemployment and no chance of moving back home, had to take whatever job. So I did debt collection work for 4 years until things improved. The redundancies were often done on a LIFO basis (last in first out) which is why Spain has 50% youth unemployment, but I think only about 23% unemployment overall. I don't think this scenario is in our short term futures because of the continuing export of food and resources to Asia, so you guys should be alright. Still, it was a hard time for me.

    Mechanical engineering is a good choice. Is AMC the maritime college? If so, it sounds pretty interesting. Most under graduate degrees first year are pretty general anyway so you can pick up subjects and electives after this to choose your specialisation depending on what suits you.



  2. @ Cherokee Organics
    The good news about piracy is that even in a resource post-peak world there are tried and true ways to lower piracy, unfortunately i don't think if the they can be applied during a collapse phase. They also tend to be more violent than current methods.

    As for transport paying a passage fee, a lot of old german castles will be inhabited again for that purpose.

    yeh AMC is the Maritime college down in Launceston, Shipbuilding will be an interesting field as old ideas have to be fused with new and all the changes happen. I won't be surprised if i work with on it at some stage if i do other engineering fields.