An Asian Century? Not So Fast

By Guy Sorman in City Journal

Pundits are proclaiming the beginning of an Asian century. Many think that the next G20 meeting, which will take place in Seoul this autumn, represents a transfer of power from West to East, a decline of Western influence, and a geopolitical tectonic shift. Such a hyperbolic vision of history seems justified, at least on the surface, by a series of recent events. China, for instance, is said to have surpassed Germany’s exports and should thus be considered the leading global economic power. Actually, the statistic is irrelevant, because it considers as exports products that are merely assembled in China: the imports that make possible the assembly—and eventual exporting—should be deducted from the measure. Other observers have pointed to the South Korean company Korean Electric, which recently outbid Électricité de France to build three nuclear reactors in Abu Dhabi. Like the Chinese exports, though, this success should not be overstated. The South Koreans will build and manage American-made reactors, using technology from . . . Westinghouse.

Recent Asian breakthroughs do make for a contrast with the pervasive gloom in the West, where the economic crisis is far from over. Governments in the U.S. and Europe seem unable to understand why huge public expenses have failed to stimulate their economies. Neither the Obama administration nor the Nicolas Sarkozy and Gordon Brown governments grasp the fact that public spending and welfare statism may have broken the backs of would-be entrepreneurs. Asian governments didn’t make the same mistake. South Korea, for example, has simultaneously helped its poor and deregulated its labor market. Asia has used the crisis to reinforce free-market mechanisms.

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