2018 annual forecast

Asia-Pacific

The Asia-Pacific is home to more people than any other region. Centered on the western rim of the Pacific Ocean, this region includes the easternmost countries of continental Asia as well as the archipelagos that punctuate the coast. Several of these countries, most notably China, experienced rapid economic growth in the second half of the 20th century, giving the region a new sense of global economic relevance that continues today. That relevance, however, depends largely on China, a power in transition whose rise is testing the network of U.S. alliances that have long dominated the region. How effectively Beijing manages its transition will shape the regional balance of power in the decades to come.

Dec 21, 2017 | 21:09 GMT
Centered on the western rim of the Pacific Ocean, the Asia-Pacific region includes the easternmost countries of continental Asia as well as the archipelagos that punctuate the coast.

Centered on the western rim of the Pacific Ocean, the Asia-Pacific region includes the easternmost countries of continental Asia as well as the archipelagos that punctuate the coast.

(Thoyod Pisanu/Shutterstock.com)
section Highlights
  • As North Korea races to achieve a viable nuclear deterrent, the United States could choose to launch a military strike against it. But because of the steep costs that such action would carry, Washington is more likely to shift toward a policy of containment.
  • China will take advantage of the United States' distraction in North Korea to deepen its conciliatory outreach to its Southeast Asian neighbors.
  • Though the United States will intensify its economic offensive against China, the limits of those measures and Beijing's appeals within the World Trade Organization will prevent the outbreak of a trade war.
  • At home, President Xi Jinping's steady consolidation of power will give him freer rein to enact critical reforms. However, he will have to reconcile measures to improve financial stability and pollution control with the need to maintain stable growth.
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