It is the greatest economic story on earth: how the two Asian giants, China and India, are shooting up the ranks of the world economies, lifting hundreds of millions of people out of poverty as they do so. This year China will probably pass Germany to become the world's third largest economy. We know some of the extraordinary statistics: China is using half the world's cement. Within ten years, India may well have become a larger economy than her old colonial master, Britain. An Indian company, Tata, is seeking to revive Jaguar and Rover.
But what is happening in Asia is also a great story about power, the power that goes with economic might. There is the perception expressed in shorthand that, just as the 19th century was Europe's and the 20th America's, so the 21st century will be Asia's. At the moment that is certainly the direction the world seems to be taking, though there will surely be bumps on the way. But it is wrong to think of Asia as a single entity and to ignore the tensions, distrust and rivalries between its major powers.
It is the rivalry between three great economies of the region, China, India and Japan – together with other tensions between the lesser powers – that Bill Emmott charts. He is well placed to do so, as editor of The Economist from 1993 to 2006. Prior to that he lived in Japan, where he wrote his prophetic study of the headwinds the country would face in The Sun Also Sets. That book was published in 1989, at just the time when much of the world believed that Japan would continue to race ahead.
The portrait he paints in Rivals is one of opportunities and dangers. In economic terms, it is hard not to see growth continuing to roll on for a while, but each of those three nations faces challenges. China will have to adapt to slower growth and cope with environmental issues; India will have to tackle weaknesses in its education and infrastructure; and Japan, while still the second largest economy in the world, now has the oldest population.
The political uncertainties are even greater than the economic ones. Emmott's key point is that the drama created by the tensions within Asia, and between Asia and the rest of the world, will continue for the foreseeable future. Whether this drama continues in a calm manner, he argues, may be the most important thing that will determine whether this century continues peaceful and prosperous. It may not.
"The drama," he concludes, "will pit new, rising powers against the world's long-established powers in America and Europe; and it will pit Asia's new powers against each other and... Japan. In economics and business, the competition will have overwhelmingly positive results. In politics, we cannot be so sure."
He sketches two broad outcomes. The more pessimistic would see China bungling its economic transition to a slower growth path, becoming more nationalistic, and tension increasing between China and the US but also China and India. There could even be a short "exchange of fire" over Taiwan. "The warm glow of the 2008 Beijing Olympics would then be remembered only through a thick smog of tension."
There does not seem too much of a glow right now, through the principal current tension is over Tibet. But there is a brighter outcome in the long term. Not only might China make a successful transition, but a strong Indian performance might succeed in lifting people out of poverty throughout the whole subcontinent, including Pakistan and Bangladesh. The self-confidence that such an outcome would foster would make it easier for the three main powers to work together and, with the rest of Asia, to create a true single economy.
What cannot be in dispute is that the outcome matters enormously. The catastrophic decisions that European nations made a century ago are still within our folk memory. The world still lives with the consequences of the First World War. We have to hope that Asia, now in some ways at a similar stage of development, manages to cope with its tensions better than Europe did.
Hamish McRae is chief economics commentator of 'The Independent'Reuse content