The Asian Century

and Korea’s Place in It

Classes 34 and 35
Nov. 29, 2023
Objectives
• Finish discussion of “Asia-nomics”
• Consider Asians in the Americas and Americans in Asia
• Review:
• How will innovation and automation affect Asian economies?
• Any examples of leapfrogging here?

• How have US and Chinese approaches to AI differed?

• Who is winning the race for AI dominance?
Sino-American collaborations in AI
• Google’s AI was built on text from computers, whereas Baidu’s focused on
location-based data and images from mobile devices, contrasting approaches
that have inspired Sino-American research collaborations
• Google has invested more than $500 million in the Chinese e-commerce
company JD.com and has opened an AI research center in Beijing
• NVIDIA has partnered with Baidu to enhance the company’s efforts to deliver
cloud-based services for home assistants and self-driving cars
• And both Baidu and Tencent, along with other Chinese investors, have poured
about $700 million into more than fifty AI start-ups in the United States
Biotech: Spending less to live longer
• Asian leaders know
that with such large
populations they
cannot afford to pay
Western-level health
care costs, which eat
up to 20% of GDP
Expanding health coverage
• China’s health care coverage has risen
from 21% of the population in 2003 to
nearly 100% today but total health care
expenditure is less than 10% of GDP
• >70% of Indonesians are now covered
under the country’s ambitious universal
health care scheme, with Vietnam and
the Philippines close behind
Harnessing innovation to leapfrog
hospitals
• Telemedicine and cheap medical devices help patients avoid hospitals
• More than 30 million Chinese use the Chunyu Yisheng app to pair them
with physicians via live video, and Alibaba has begun online prescriptions
• The Indian start-up HealthCube provides comprehensive diagnostics and
cloud-based digital records that any patient can access and share via
smartphone with doctors who can remotely prescribe treatments
• Even dentistry will become cheaper in Asia: in 2017, a Chinese robot
performed the first fully automated dental implant surgery
Regulatory environments
• Asia’s regulatory environment increasingly
enables the ambitious pursuit of applied
biotech breakthroughs
• China used the same technology that
Scottish scientists used to clone the sheep
named Dolly in the 1990s to clone monkeys
• CRISPR gene-editing technology was
pioneered in the U.S., but the only human
trials are under way in Chinese hospitals
Finding extra work
• Hustling is nothing new to Asians
• Across Asia, the informal economy
accounts for anywhere from 12 to 50%
percent of GDP and employment
• And taking advantage of late development,
most Asian societies have apps that allow
people to be hired for part-time work
based on their skills
Education
• Asian nations are
in a desperate rush
to convert their
billions of bodies
into productive
human capital
Role reversal
• As Asia’s consumption levels rise, it will become the crucial growth driver
for many Western multinationals
• Asia used to mainly produce for the West, keeping labor costs down and
Western companies’ profits high
• Now the West must also produce for Asia, catering to its diverse income
levels and tastes — and in Asia to meet government demands for local
content and job creation as well as to be closer to their customers in
hypercompetitive markets
Gaining market share: China
• In China, foreign companies have little
chance of achieving a dominant market
share
• And many big firms have given up on
breaking into China’s lucrative market
after failed attempts
Gaining market share: Elsewhere in Asia
• India, Pakistan, Indonesia, and the Philippines — with a combined
population of over 2 billion — are leading centers of economic growth
• Unlike in China, these more open economies and democratic societies
present Western firms with an opportunity to capitalize on Asia’s next
growth wave
• From Vietnam to Myanmar, fast-growing economies allow as much as
100% foreign ownership in lucrative sectors like construction, real estate,
finance, and retail
Competing on price points
• Western brands have long known that they can better reach Asia’s masses by
meeting them on price, requiring producing locally and in smaller quantities
• Unilever’s single-use shampoo pouches have become a well-known example
of reaching the bottom billion
• For the lower-middle and middle classes, smaller cars and big-screen
smartphones have been important adaptations
• Western pharmaceutical companies are opening labs in China and India to
develop “B” lines of medicines for Asia’s swelling populations and the rising
incidence of cancer, diabetes, osteoporosis, and other ailments
US travelers & travel companies
• Not only are Americans selling in Asia, but their travel to Asia is also
boosting travel-related US companies
• 40% US overseas tourists go to China (including Taiwan and Hong Kong),
while nearly 20% visit India and 15% Japan, followed by the Philippines,
South Korea, Thailand, Vietnam, and Singapore
• Marriott International has more than a hundred hotel properties in China
and the same number in India, and Airbnb has partnered with Alibaba
and Tencent to promote seamless home-sharing bookings in China
Asian’s in America
• Over 21 million US residents claim Asian heritage
• The largest groups are Chinese (4.8 million), Indian (4 million), Filipino (4
million), Vietnamese (2 million), and Korean (1.8 million)
• There are also an estimated 3 million Americans of Arab descent
• Nearly half of all Asians in the US live in the West, with California alone
accounting for one-third (7 million), followed by New York with 2 million
• By 2050, Asians are projected to displace Hispanics as the largest
immigrant group
Asian incomes in the US
• Asians’ incomes are as diverse as
their ethnicity
• Indians have the highest median
household incomes, followed by
Filipinos and Japanese, then Chinese,
Pakistanis, and Koreans
Asian educations
• The emerging emphasis on STEM
(science, technology, engineering,
and mathematics) education in the US
is due in part to a recognition of the
competitive achievements of Asian
societies
• Asians’ superior academic standing in
college admissions has generated
major lawsuits against prestigious
universities such as Harvard