far to fall, but it did fall … and hard. In contrast, Vietnam only recently hooked into the global economy (when the US trade embargo was lifted in 1994) and its currency, the dong, isn’t convertible, so its exposure to the storm was limited. As a highly placed resident Westerner put it, ‘We haven’t seen much of the economic crisis here. Vietnam is still trying to sort out a local problem – Stalinism.’
China’s experience of the economic storm came mainly through Hong Kong, which is exposed to regional economies through its finance sector. Unlike in other countries in the region, Hong Kong bank authorities managed to defend the Hong Kong dollar against the pressure of the foreign exchange markets. Its peg against the US dollar is widely expected to hold, thanks to the dollar reserves of the city and the pride that’s at stake – for the Hong Kong dollar to weaken so soon after the departure of Britain would mean a terrible loss of face for Beijing. The main Hong Kong casualty of the Asian crisis to date is Peregrine Investment Holdings, which collapsed largely as a result of its exposure in Indonesia.
As for the rest, Taiwan appears confident that it can continue its steady economic growth, and the effects of the Asian economic crisis have barely been felt in China, although the warning has not gone unnoticed. Dentsu Young & Rubicam (DY&R) Guangzhou reports that ‘there is much fear in China given the recent drop in economy in the region and the talk of devaluing the yuan or the renminbi’. China gives the region cause to hold its collective breath. If the renminbi were to fall, it is likely to take the rest of the region’s currencies down with it.
As many commentators have pointed out, the only foreseeable major threat to the region lies in the social consequences of the economic crisis and the adjustments that the region is going through. For the last twenty years Asia has been largely stable and peaceful. Only a very small minority of Asians has been concerned with political freedom and social inequality – South Koreans routinely take to the streets to do battle with the authorities – as the majority has been more interested in working hard for material prosperity. However, any setback to rising standards of living could prompt social unrest, as was seen in Indonesia in late 1997 and early 1998. Indonesia has emerged as one of the most deeply troubled economies, with its authorities apparently reluctant to take the sort of action that has the potential to salvage the situation in other hard-hit countries, such as Thailand and South Korea.
DY&R Korea reports cautious optimism there as people tentatively hope for a return to Korea’s previous record of growth. South Korea is no stranger to the vested interests and cosy behind-the-scenes deal-making that have characterized Asian economies in recent years, but it has taken the IMF’s strictures very seriously. With the country’s recent record of solid achievement as an economic power, and its national determination to out-do neighbouring Japan, the economic crisis could strengthen South Korea in the long run.
Although China has been barely affected there are fears that even the current process of economic change there could lead to problems. As DY&R’s Sharon Lee in Shanghai put it, ‘If the income gaps between rural and urban centres are not narrowed, there may be tremendous social upheaval.’
The Journal of Business Ethics spelled out the issues: ‘In the transformation of the employment system and the opening of labor markets, there are nearly one hundred million potentially unemployed people in rural areas, and ten million in state-owned enterprises. If the enterprises continue to employ the latter, the reforms in the enterprises will fail and the new enterprise cannot bear such heavy burdens. Moreover, it is easier for rural workers to find jobs in cities because they are willing to accept lower wages than urban workers … Shanghai has two million unemployed workers but four million and sixty thousand jobs are offered to the non-local workers.’
The factors that were expected to make ‘the Asian Century’ on the whole still apply: large, dynamic populations eager to work for prosperity (and to work for less than many of their ‘developed market’ counterparts); belief in education and training; belief in market economics along with respect for collective values; social stability; growing self confidence; and huge, largely untapped markets for growth-minded multinationals. The region has already established a track record for realizing its potential, and there is clearly still more potential to be tapped in the twenty-first century.
Asian Consciousness
National boundaries are internationally established, but regional boundaries are in the eye of the beholder. For example, what Westerners think of as ‘the Middle East’ is called ‘West Asia’ in the Malaysian media. For our purposes, the Asian countries covered in this section are those in the Asia Pacific region, with shorelines washed by Pacific Ocean waters. Even within this definition, Asia is a vast and diverse region, stretching from the highly seasonal north of Japan down to the equator and beyond, including the year-round tropical heat of Indonesia. The religious landscape is similarly varied, ranging from Confucianism in the north, Catholicism in the Philippines, through many varieties of Buddhism and growing devotion to Islam in the south, with a recent overlay of Marxism in China and Vietnam.
Talking with people in the region, there seems to be little clear agreement about what makes them ‘Asian’. For some, it’s a certain gentleness and graciousness of manner that contrasts with the more abrupt style of Westerners. For others, it’s the central place that rice growing and eating have had in shaping the cultures of the region, or it’s a question of geographical proximity and unity, even though the vast majority of people in the region have never travelled abroad. Still others cite the much-touted ‘Asian values’, meaning respect for authority and age, and a willingness to put the interests of the group before the interests of the individual.
In the final analysis, being Asian may ultimately be a question of choice, a question of identifying with the issues, interests and sensibilities of other people in the region, and making common cause with them. Unlike in Europe, where a similar process is taking place, most Asians are fortunate in not having recent memories of war to overcome as they forge links with their neighbours. Although memories of Japanese occupation linger long for some older Asians, there are fewer people old enough to remember the war.
The development of Asian consciousness, and with it Asian power, will come not just from trading goods, but also from sharing ideas and culture. While Asia is a powerhouse exporter of manufactured goods, it continues to be a big importer of entertainment and style products – Hollywood films, popular music, designer fashion wear, computer software, sports. Consumers in Asia, and indeed around the world, would have no hesitation in buying electronic goods or domestic appliances made in Asia, but the same cannot be said for ‘intellectual copyright’ products. The region has its own products in this area, but the audience is barely regional, let alone global.
As Steven Lyons, of Burson-Marsteller Hong Kong, said, ‘Lifestyles and values will continue to be altered by Western media and product developments. Asia will have to work hard at maintaining its cultural identities. Rural areas will be the last bastions of traditional cultural and family values.’
The emergence of Asian confidence and creativity will be a key factor in the maturing of the region. The turning point will come when Vietnamese soap operas top the TV ratings in Indonesia, when Indonesian pop stars play to packed stadiums in Thailand, when a Thai fashion designer sells like hotcakes in Shanghai, when a Chinese feature film breaks box office records across Asia.
Getting Schooled
One of the cornerstones of ‘Asian values’ is emphasis on the importance of education. In societies without social security, children are a sort of pension plan. It used to be smart to have lots of children to spread the risk. These days, the emphasis has switched from having lots of pairs of hands to having a few well-educated brains. Family sizes are shrinking, and parents are investing in putting their children through higher education.
The pressure to get educated is being felt by children of all ages, all the way down to preschoolers. Steven Lyons expects ‘serious education to start at increasingly younger ages (three to four)’. Our colleague Stuart Harris, a market research practitioner in Kuala Lumpur, reports, ‘My son Ruben got his first school report in Kuala Lumpur at age twenty-one months!’ As DY&R Shanghai observed, ‘The