Is the Future in Asia — and If SO, IN Which Asia?

By Jouko Ahvenainen

Asia is rapidly emerging as the global economic powerhouse. Yet, speaking about Asia as a singular entity can be misleading, given the region’s diversity in countries, regimes, and interests. At the recent Horasis Asia Meeting in Dubai, we explored this complexity in a session titled Asia’s Geocentric Future.

One resounding conclusion? Geography and numbers still matter. But how will key players like China, India, and the US shape Asia’s future, and which other nations might step into pivotal roles? Let us examine these dynamics.


The Rise of RCEP: A Game-Changer for Global Trade?

The incorporation of the Regional Comprehensive Economic Partnership (RCEP) in 2022 brought together 14 Asian and Pacific nations, representing a staggering 30% of global GDP. This monumental trade pact, which eliminates 90% of internal tariffs, heralds a promising future. But what will the RCEP mean for global trade? How might its interregional trade and knowledge networks influence businesses in Africa, the Gulf, Europe, and the US?

On paper, having China, Australia, South Korea, and Japan in the same trade alliance seems ambitious. But add to the mix the growing geopolitical tensions, the influence of Trump’s new administration, the rapid pace of technological and AI advancements, and India’s absence from the pact, and the complexities deepen. Not to mention the evolving role of Central Asia, which remains a wildcard in the region’s future.


Is RCEP a Strategic Play by China?

For years, the US and Europe have sought to mitigate risks associated with China. A prevailing view in our session was that RCEP might be China’s strategy to anchor Asia closer to itself—recovering business lost to the West and simultaneously making it harder for the West to sever ties. It’s a clever move, showcasing China's long-term thinking.

However, skepticism also abounds. The participating RCEP countries are vastly different, with conflicting interests. Australia, for example, is a close ally of the US through agreements like the Five Eyes partnership, while South Korea and Japan often pursue priorities that diverge from China’s.


The Trade vs. Security Dilemma

One recurring theme was the inextricable link between trade and national security. The current geopolitical climate forces nations to prioritize one over the other. Geography and resources play a critical role. For smaller countries, survival strategies typically fall into one of three categories:

1. Maintaining strong relationships with neighbors,
2. Leveraging superior technology and military capabilities, or
3. Building reliable alliances for protection.

This challenge becomes even more pronounced as the US redefines its global role. Under Trump’s administration, the US focus has shifted inward, leaving allies to reconsider their security arrangements — not just at the borders but also across supply chains, logistics routes, and data networks.


RCEP’s Real Value: Supply Chains Over Tariffs?

Some argue that RCEP is less about creating a true no-tariff economic zone and more about securing regional supply chains to maintain cost-effective production. For example, China heavily relies on components and raw materials from fellow RCEP nations. By solidifying supply chains, RCEP ensures a foundation for economic stability, even amid global disruptions.


India’s Role: A Powerhouse in the Making?

India holds immense potential as a powerhouse in Asia, though its relationship with China remains, at best, complex. Western nations increasingly view India as a safer and more reliable partner than China. Even Trump has expressed a willingness to collaborate with India and its Prime Minister, Narendra Modi. Still, questions linger about how India’s rising influence will interact with RCEP’s ambitions.

Meanwhile, BRICS nations — and those aspiring to join — are exploring ways to reduce US dominance on the global stage. One notable effort involves creating alternatives to the US dollar for global payments. If successful, this could diminish the dollar's power and drastically alter the US’s ability to sustain its fiscal policies through debt.


The Fragmented Future of Asia

The signs are clear: Asia’s importance to global business is growing. Central Asia, in particular, is emerging as a key player, bolstered by initiatives like the Silk Road projects, which aim to secure safer logistics routes. Meanwhile, the Gulf nations are becoming significant investors in Asia and beyond.

However, Asia is far from a unified front. Its fragmentation and internal conflicts make it a fast-changing and highly complex region. As one speaker at Horasis Asia put it, “It’s unwise to talk about Asia as if it shares a singular interest.”


Navigating the Complexity

For geopolitical experts, these dynamics are challenging enough to analyze. For companies, they’re even harder to navigate. Businesses must assess target markets, supply chains, logistics networks, and production locations, all while contending with local regulations, sanctions, political climates, currency risks, and reputational considerations.

As the session highlighted, companies need robust data and predictive analytics tools to succeed in this intricate environment. In a world where the stakes are higher than ever, foresight and adaptability are the keys to thriving in Asia’s fragmented, fast-evolving landscape.

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