DEFENSE SECRETARY CARTER SAYS ASIA'S DEMOGRAPHICS INCREASING GLOBAL PROFILE

FROM:  U.S. DEFENSE DEPARTMENT
Carter: Demographics, Economics Boost Asia’s Global Profile
By Jim Garamone
DoD News, Defense Media Activity

WASHINGTON, April 3, 2015 – Demographic changes in Asia will make the region more important to the United States, Defense Secretary Ash Carter said at the State Department recently.

As Carter prepared to depart April 6 for his first trip to Asia as defense secretary, he reiterated that the United States is a Pacific power and will remain one, adding that this is in the best interests of Asian nations and of the United States.

Demographic trends show that Asian nations will only become more important globally in the 21st century, as Asian nations -- enjoying peace provided by American presence -- prosper and grow, Carter said. In the future, he added, no region will affect U.S. prosperity more, and it is in American interests to maintain a strong security presence in the region.

The math is inescapable, Carter said at the State Department.

“We know that 95 percent of the world’s customers live beyond our borders, and the spending power of middle-class consumers in today’s emerging markets is expected to increase by $20 trillion over the next decade,” he said.

Rising Middle-class Consumption

Just five years ago, the United States and Europe accounted for around 50 percent of global middle class consumption, and Asia accounted for about 20 percent, he said.

“Five years from now, the U.S. and European share of middle-class consumption will shrink to about 30 percent, while Asia’s will rise to 40 percent,” the secretary said. “And this trend will continue as Asia’s 570-million-strong middle class grows to about 2.7 billion consumers over the next 15 years.”

So, from an economic standpoint, Asia will become more important to American manufacturers, American jobs and American consumers. The central premise of America’s overall Asia-Pacific strategy is the recognition that, in the 21st century, no region holds more potential for growth, development and prosperity, Carter said.

Growing Populations

Roughly 7 billion people live in the world today. In 25 years, demographers estimate that number will grow to 9 billion, with much of the growth occurring in Asia, according to U.S. Census Bureau statistics and the CIA World Factbook.
China and India are the world’s two most populous countries and will remain so through 2050. Today, China has around 1.355 billion people, and India has around 1.236 billion. By 2050, officials expect India to be the most populous country in the world with 1.65 billion people, and China’s population will be 1.303 billion.

Economic progress in both countries has been building. Today, China has about 150 million people earning between $10 and $100 per day -- the amount economists calculate as putting a person in the global middle class. If the country continues its current growth, as many as 500 million Chinese could enter the global middle class over the next decade. This means that by 2030, 1 billion Chinese people could be in the economic middle class.

India’s middle class is much smaller -- about 50 million people. But economists expect India’s middle class to reach 200 million by 2020 and 475 million by 2030.

Both countries have systemic problems they need to overcome, and projections may fall short, officials said, but they added that the projections have the potential to prove accurate.

This growth is not limited to the two largest countries in Asia. Indonesia, Vietnam and the Philippines also are posed for an incredible growth in their middle classes.

Capable Militaries

From a security standpoint, Asia is home to some of the largest and strongest militaries on the globe. China, Russia, North Korea, India and Pakistan have large and capable militaries. With the exception of North Korea, the U.S. military is working to improve relations with each. American military leaders also are working with traditional allies such as South Korea, Japan, Australia, the Philippines and New Zealand to strengthen multilateral cooperation in the region.
Other nations -- Vietnam, Indonesia, Singapore, Malaysia, Thailand and Burma -- also are working to preserve stability in the region.

Snapshot of Military Powers

Here’s a snapshot of the various military powers in the region:

-- China spends at least 2 percent of its gross domestic product on defense and has the world’s largest armed forces, with 2.333 million active duty forces and 2.3 million reserves. Its stated defense budget is $145 billion. China has about 3,000 aircraft in its armed forces, has bought an aircraft carrier from Russia, and is building one of its own. The Chinese have more than 9,000 tanks and almost 5,000 armored fighting vehicles and are modernizing across all services.

-- South Korea spends 2.88 percent of its GDP on defense. The republic has 624,465 people on active duty and almost 3 million in the reserves. South Korea has 1,412 total aircraft and a naval strength of 166 ships. The South Korean military is extremely capable and has a defense budget of $33.1 billion.

-- Japan spends about 1 percent of its GDP on defense. There are 247,173 personnel in the Japanese Self-Defense Force, with about 58,000 active reserve personnel. The Japanese military has 678 tanks, 2,850 armored fighting vehicles, 1,613 aircraft and 131 ships. The defense budget is $41.6 billion.

-- India spends 2.43 percent of its GDP on defense. The nation has 1.325 million people under arms, with 2.1 million more in reserve status. India’s military has about 2,000 aircraft, two aircraft carriers, 202 ships, more than 6,400 tanks and 6,700 armored fighting vehicles. The Indian defense budget is $38 billion.