In a time when some regions in the world turn toward nationalization like Latin America, or struggle with mountains of unnecessary regulations like Europe, or try to overcome decades of autarchy like Africa, one region clearly embraces more market liberalization. This is Asia, from the Indian subcontinent through China to the very southeast. Given its huge assets in terms of population, Asia may pull the center of world economy in not so distant future. As total purchasing power China and India combined already exceed European Union or the United States. If they keep current growth going, China will exceed any of them alone by 2015; India may do it by 2025-2030.

Making forecasts is always tricky business. A hundred years ago people looked still at steam machines as main engines for space exploration. As late as 1935 Albert Einstein predicted that nobody would be able to split atom within living generation lifetime. In 1970s there were plans to go to Mars. Thirty years ago some predicted mass starvation on planetary scale. Twenty years ago it was predicted that Japan would be first economic power in the world. Ten years ago almost everybody was excited with EU integration. On the other hand, nobody or almost nobody was able predicting any of the world wars, great depression, cold war, collapse of communism, and of course current war after 2001.

At first look, this leads to conclusion that any forecast is pure waste of time, but this isn't the case. Particular events will always escape our ability of prediction. On the other hand, more general trends are much easier to discern. World War I could have begun one or two or three or five years earlier, but confrontation between Germany and France was something people lived for generations with. Collapse of communism could have happened earlier or later, but planning economic system was clearly less efficient than capitalist economies and this was known for many years. People can and usually try to change these trends; when they succeed most forecasts are becoming redundant. Which however doesn't mean we must stop making predictions.

Current trends show that most parts of Asia have embraced more liberal version of capitalism than some older bastions of capitalism like continental Europe. China and India were economic superpowers just 200 years ago, so catching up with the West is not just a matter of social development, but also a matter of prestige and restoring historic justice. The single most important event that may block China of becoming first world economic power by 2015 is collapse of communism. As strange as it may appear, the future of capitalism in China and in Vietnam is in the hands of communist oligarchy.

Collapse of communism in China however, we don't see real chance of gradual transition, isn't something that will inevitably destroy capitalism. It depends on who will destroy political monopoly of communist party. Whether this will be large coalition of ordinary people acting against market reforms, or on the contrary, of people on the top that want to increase their power by taking legal rights over economy, as was the case in so many countries in Eastern Europe and in ex-USSR. Large popular coalition will inevitably include peasantry and thus may lead to social revolution; collapse orchestrated by the top will look more like a coup and will save most political positions of current oligarchy.

Another major development we must closely look at is regional economic integration in Asia. The logic of economic liberalization always makes possible market openings between neighboring countries. Right now many of them look at each other as market competitors instead of allies. By moving up the scale of technological progress, China leaves vacant many market niches. A recent visit to local Wal-Mart made me realize that it was just a matter of time before we see completely disappearing any textile imported from China, which would be replaced by textile imported from India, Pakistan, Bangladesh, and Sri Lanka. It will be really a bad solution if Asian countries, proud of their economic success, decide to follow European protectionist policy and rivalries of late 19th c. Protectionism and economic autarchy could bring only temporary relieve, but in no way can produce sustainable economic development. Just to add en passant, protectionism at the end always leads to less economic freedom and to more backwardness, situation that most Asian countries so desperately try to overcome.

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