Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 228

The ascent of Asia and what it means for Australia

The proposed departure of the UK from the European Union could lead to other difficulties and defections, and the US will be more insular under the Trump presidency. These trends point to an even greater need for Australia to consolidate its future in its own region of the Asia Pacific, and indeed in the wider arena of Asia.

In 2017, the shares of world GDP are forecast to be: Asia Pacific (33%), Indian Sub-Continent (9%), North America (19%), Central and South America (6%), Western and Central Europe, mainly the EU (17%), Eastern Europe (4%), Middle East (7%) and Africa (5%). These are higher shares than contemplated for the two Asian regions just 18 months ago.

Asia’s place in the world

Calendar 2016 was a landmark year. It was the first time the GDP of the East surpassed the GDP of the West, at least in purchasing power parity (PPP) terms, which is the most important measure of economic size. And in 2017, Asia, at over 42% of the world’s GDP, will exceed Europe and North America combined.

Asia’s economic composition in 2017 and its growth prospects, broken up by nations, are shown in the two following exhibits, the giants being China, India, and Japan.

Australia’s place in the world and region

Australia is tiny, at 3% of the region’s GDP, yet that still puts us as the 19th largest economy in the world of 230 nations and protectorates with 1% of its global GDP (in PPP terms). Tinier still is our population of 24.5 million at 0.33% of the world population of 7.4 billion.

The table below is an added reminder of our smallness among Asia’s economic and populated giants, in everything except land mass.

The next exhibit below shows the degree of our scarcity of population. Australia’s top one-third, with a land mass of 2.6 million square kilometres, has a population of just over a million people. Our nearest neighbour, Indonesia, with less than three quarters of that land mass, has a population nearly 250 times greater!

In case we think of the top third of our continent as dry and largely uninhabitable, that part of our land mass has 60% of our annual water supply.

There are now seven Asian cities in the world that are of a similar or greater population size than our entire nation, with its extraordinary land mass. They are: Tokyo (38 million), Shanghai (34 million), Changquin (> 32 million), Jakarta (31 million), Karachi (25 million), Delhi (25 million) and Beijing (25 million). More will follow.

None of this should lead to xenophobia of the sort we have exhibited at various times in our history. We are already on our way to becoming a Eurasian society by the end of this century, having been European in the 20th century and British in the 18th century. We will be on our way to becoming an Asian society in the 22nd Century, albeit a rich and westernised Asian society.

We are expected to have a population of 70 million by the year 2100. Even at that stage, some Asian cities will be more populated than our entire nation. So, re-evaluating our place in Asia and our relevant population – given our land mass and resources – will be an ongoing, neighbourly and moral responsibility for many generations to come. We will need big and enlightened minds in such a significant and powerful part of the world where we live and work.

 

Phil Ruthven is Founder of IBISWorld and is recognised as one of Australia’s foremost business strategists and futurists.

 

  •   23 November 2017
  • 4
  •      
  •   

RELATED ARTICLES

Are recessions a thing of the past?

Asia: bull or bear in the Year of the Goat

Australia’s default: who do you rescue?

banner

Most viewed in recent weeks

2 billion reasons to fix retirement income

A proposal to address Australia's 'stranded balances' in retirement by requiring super funds to transition members to pension phase at 65, boosting retirement income and reframing super as a source of income.

The ultimate superannuation EOFY checklist 2026

Here is a checklist of 28 important issues you should address before June 30 to ensure your SMSF or other super fund is in order and that you are making the most of the strategies available.

Noel Whittaker’s take on the budget

Marketed as a fix for inequality and housing affordability, the latest budget instead delivers a tangle of tax changes that leave everyday Australians worse off.

Two months into retirement

A retirement researcher's take on retirement and her focus on each of her six resource buckets to stay engaged during the transition and beyond.

Welcome to Firstlinks Edition 662 with weekend update

The debate over the budget is increasingly shaped by frustration and perceptions of unfairness, rather than clear-eyed assessment of policy outcomes.

Australia has no death duties. Technically.

Australia may not levy formal death duties, but a growing web of tax measures is quietly shaping what wealth passes between generations. Now, the 2026 budget adds another layer.

Latest Updates

Investing

Markets without a margin for error

From US fiscal pressure to China’s shifting growth model and Australia’s structural constraints, markets are yet to reflect a less forgiving global investment landscape.

Investment strategies

The investment mistake killing your returns

Retail investors face an increasingly complex product environment, but simplicity may be the most overlooked advantage in building a portfolio you can actually live with.

The ticking clock on oil reserves

A sustained disruption through the Strait of Hormuz is forcing a rapid drawdown of global inventories. Without a resolution, the arithmetic points to a supply shock by early August and a sharp surge in the oil price.

Infrastructure

Managing the impact of the Middle East conflict on listed infrastructure

The outbreak of conflict in the Middle East in February 2026 marks an historic shock for oil and gas markets, with major implications for inflation, interest rates and ultimately for listed infrastructure companies.

Economy

Rent inflation and the missing policy

The government plans to remove negative gearing to help renters buy homes. For those who remain renters, the wrong levers are being pulled to try and increase rental unit supply.

Investment strategies

The Risk-Wealth Paradox: Why more money means you should take less risk

As wealth grows, so does the assumption that risk should too. But in reality, the opposite may be true: once you understand how the value of money changes over time, the case for taking less risk becomes far more compelling.

SMSF strategies

SMSF estate planning: Eight things to consider

As super balances grow, SMSFs are becoming central to retirement outcomes. Without proper planning for “Armageddon” scenarios, even well-structured funds can unravel when it matters most.

Sponsors

Alliances

© 2026 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.