Asia's rise is changing global economy

Asia's competitive advantage is why its share of world exports has almost doubled from 16% to nearly 30% since 1980.

The emergence of Asia is changing the world economy and compelling advanced countries to improve their skills or fall behind, Britain's Treasury chief Gordon Brown said on Thursday.

HT Image

"Past economic transformations depended as much on brawn as well as on brains," Brown, in a recorded video message, told an international financial conference in South Korea's capital organized by the Financial Times newspaper.

"But today, countries like ours will only be able to compete if we move up a gear into the high-tech, the high skilled, the value-added products and processes, the difference between being in a race to the bottom and a race to the top," he said. Brown said Asia's competitive advantage is why its share of world exports has almost doubled from 16 per cent to nearly 30 per cent since 1980.

It's also the source of "the loss of almost one million manufacturing jobs in Europe, Japan and America" in the past year and the outsourcing of another 250,000 service jobs, he said. Brown said that the "dramatic entry of India and China in particular into the world economy" is why "Asia now consumes one quarter of the world's oil and we've seen a doubling of oil prices."

He added that those countries, with their more than 2 billion people, emphasis on education and desire to move out of low cost manufacturing and services, also offer new markets and opportunities.

"The challenge for all countries in financial services but also throughout their economies is how we rise to these opportunities that global economic change presents," he said.

Brown, who has been chancellor of the exchequer since the Labour Party came to power in 1997, is widely expected to take over from Prime Minister Tony Blair before Britain's next election, which is due by 2010.

He also used the Seoul conference to tout London's strengths as a global financial centre.

"London's assets we believe are our historic stability, our enduring belief in free trade, our support for open markets, our legal systems and our good fortune geographically that places us halfway between America and Asia, bridging both their working days."

Recently retired US central bank chief Alan Greenspan and former New York Mayor Rudolph Giuliani addressed the conference on Wednesday.