Asia's seemingly relentless economic rise is still not inevitable

Like most of the 30 years that preceded it, 2012 will be punctuated by statistical evidence of Asia’s growing share of the global economy, and by symbols of relative Western decline. The financial crisis of 2008, followed by the various excitements of 2011—the American debt-ceiling fiasco, the euro zone’s interminable wrangling, riots on the streets of Western capitals—seemed to mark a tipping-point. Asia’s rise looked faster than anyone had expected.

In Asia there is some understandable Schadenfreude. After all, just over a decade ago, the region had to endure Western lectures on the failings of Asian crony capitalism. And the harsh remedies imposed on the errant Asian economies in the late 1990s now seem medicine too drastic for America and Europe. Sober Asian policy­makers, however, worry. In the short term, they know that the region would be badly hit by another severe downturn in the West. In the longer term, they wonder whether developing Asian economies will get stuck in a “middle-income trap”.

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