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

Making sense of record high markets as the world catches fire

The post-World War Two economic system is unravelling, leading to huge shifts in currency, bond and commodity markets, yet stocks seem oblivious to the chaos. This looks to history as a guide for what’s next.

3 ways to fix Australia’s affordability crisis

Our cost-of-living pressures go beyond the RBA: surging house prices, excessive migration, and expanding government programs, including the NDIS, are fuelling inflation, demanding bold, structural solutions.

Is there a better way to reform the CGT discount?

The capital gains tax discount is under review, but debate should go beyond its size. Its original purpose, design flaws and distortions suggest Australia could adopt a better, more targeted approach.

How cutting the CGT discount could help rebalance housing market

A more rational taxation system that supports home ownership but discourages asset speculation could provide greater financial support to first home buyers.

Welcome to Firstlinks Edition 648 with weekend update

This is my last edition as Editor of Firstlinks. I’m moving onto a new role though the newsletter will remain in good hands until my permanent replacement is found.

  • 5 February 2026

It’s economic reality, not fear-based momentum, driving gold higher

Most commentary on gold's recent record highs focus on it being the product of fear or speculative momentum. That's ignoring the deeper structural drivers at play. 

Latest Updates

Superannuation

Super is catching up, but ageing is a triple-threat

An ageing Australia is shifting the superannuation system’s focus from accumulation to the lifecycle of retirement. While these pressures have been anticipated for decades, they are now converging at scale and driving widespread industry change.

Investment strategies

Corporate earnings show resilience against volatility but risks remain

Evidence for a strong reporting season had been piling up for months and validated an upgrade cycle already underway. However, risks remain from policy uncertainty.

Superannuation

Want your loved ones to inherit your super? You can’t afford to skip this one step

One in five Australians die before retirement and most have not set up their super properly so their loved ones can benefit from all their hard work and savings. 

SMSF strategies

Sixteen steps in a typical SMSF borrowing

Getting a mortgage is never an easy process but when an investment property is purchased in a SMSF the complexity increases significantly. Read this before taking the plunge. 

Planning

Do HNWI get better advice?

Good advisers lead to more diversification, lower turnover and less home bias. However, studies show the average adviser may not be adding much value to clients. 

Strategy

AFL Final Ten with wildcard edit 'unlevels' the field

When the new AFL season kicks off a wild-card will be added to the finals. Is this new formula fair and how does it impact the odds of winning the premiership.

Planning

Love them or hate them, it's worth understanding annuities

Investors have historically balked at exchanging a lump sum for a future steam of income. Breaking down the financial and emotional considerations of purchasing an annuity.        

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.