The Japanese have a "flying geese" theory: The lead goose to industrialise being Japan, followed by the four "Dragon" economies of South Korea, Taiwan, Hong Kong and Singapore. When these economies moved up the production chain, the four "Tiger" economies followed, namely Malaysia, Indonesia, Thailand and the Philippines.
In the 1990s, China became part of the Asian global supply chain when its cheap labour and special economic zones in the coastal areas became very successful in attracting manufacturing. India became part of the supply chain in IT software services, whereas East Asia concentrated on textiles, electronics and consumer durables.
Of course, the success in manufacturing exports has made many Asians, countries as well as individuals, very rich. But as we have discovered, holding vast sums of the greenback carries some risks. Indeed, measuring wealth by pieces of paper that can devalue overnight makes you only more vulnerable, not more secure. This is also a problem when you trade paper money by cutting down all your forests, destroying your environment, polluting your rivers and eventually paying higher medical bills because of the bad environment.
As the conscience newspaper of Western wealth, the pink-sheeted Financial Times ponders the future of capitalism. It may also be well for Asians to think what is the future of the Asian supply chain when its major customers are in deep crisis.
Asians freshly out of poverty are not likely to be great philosophers - they care more about their rice bowls and their children's education. Throughout Asia, I can feel the anger of the rural masses who are deeply disturbed when their sons and daughters go to the cities and sometimes end up as prostitutes or as drug addicts.
Of course, in many Asian cities, large white mansions with Roman columns are sprouting up, and every glass and steel apartment and hotel looks like it has been designed by Philip Starck.
Whilst those in the middle classes aspire to have huge white houses like the Texan scoundrel millionaire JR in the TV series "Dallas", it is quite clear that the entire populations of China and India, with 2.3 billion people between them, cannot all live like the average American. If they all consumed natural resources the way the average American did, there would be no global resources left. The terrible pollution that we see from the ever-present smog overhanging cities in China, and the burning of forests in Indonesia, reminds us that we cannot live off and destroy our environment at the same time.
If we all drove the same number of cars as in the West, the price of oil would not be the current US $50 per barrel, but more likely $200, as a recent study shows. There are still bottlenecks in the supply chain that could easily cause prices to move from deflation to inflation very quickly.
Asian history teaches us that to consume is to waste our scarce savings. It is not wrong to consume, but only in an environmentally and financially sustainable way. Hence, the right thing to do is to switch not from investment to consumption, but from resource-intensive, polluting manufacturing towards high quality services.
Services are much more knowledge-intensive. They create more employment, use fewer resources and are less polluting. When we improve our health and education services, increase our media and entertainment industries, we are not destroying our environment, but enriching our mental and physical well-being. We cannot have growth for growth's sake. We need to have a better quality of life without destroying the fragile environment that we live in.
The recent bubble was all about the inflation of quantities and the deflation of values. The banks printed Quantity, especially paper money and leverage, and forgot that people care more about quality of life and the basic values of honesty and integrity. It was the greed and arrogance of the Madoffs and the investment bankers who thought that golden parachutes were their right, rather than a privilege from the trust the people gave them.
In the end, what did they create but toxic products that caused huge losses for the public? AIG had the most prominent and eminent economists and professionals on its board, but nothing at the corporate governance level was done to check where the profits were coming from and whether the risks were highly correlated.
The best things that we can create are trust in each other, and service to our family, our nation and our environment. Trust and service with integrity is truly win-win, whereas consumption will eventually lead to a zero-sum game in which the earth will lose. And if the earth loses, we lose.
Andrew Sheng is adjunct professor at Universiti Malaya, Kuala Lumpur, and Tsinghua University, Beijing. He has served as adviser and chief economist to Bank Negara, deputy chief executive of the Hong Kong Monetary Authority and chairman of the Hong Kong Securities and Futures Commission.