The economy of Asia comprises more than 4 billion people (60% of the world population) living in 46 different states. Six further states lie partly in Asia, but are considered to belong to another region economically and politically. As in all world regions, the wealth of Asia differs widely between, and within, states. This is due to its vast size, meaning a huge range of differing cultures, environments, historical ties and government systems. The largest economies in Asia in terms of nominal GDP are China, Japan, India, South Korea, Indonesia and Iran. In terms of GDP by purchasing power parity, China has the largest economy in Asia and the second largest economy in the world, followed by Japan, India, and South Korea. Wealth (if measured by GDP per capita) is mostly concentrated in east Asian territories such as Hong Kong, Japan, South Korea, Singapore and Taiwan, as well in oil rich Middle Eastern countries such as Iran, Saudi Arabia, Qatar, United Arab Emirates. Asia, with the exception of Japan, South Korea, Hong Kong and Singapore, is currently undergoing rapid growth and industrialization spearheaded by China and India - the two fastest growing major economies in the world. While East Asian and southeast Asian countries generally rely on manufacturing and trade for growth, countries in the Middle East depend more on the production of commodities, principally oil, for economic growth. Over the years, with rapid economic growth and large trade surplus with the rest of the world, Asia has accumulated over US$4 trillion of foreign exchange reserves - more than half of the world's total. -------------------------------------------------
Ancient and medieval times
China and India alternated in being the largest economies in the world from 1 to 1800 A.D. China was a major economic power and attracted many to the east, and for many the legendary wealth and prosperity of the ancient culture of India personified Asia, attracting European commerce, exploration and colonialism. The accidental discovery of America by Columbus in search for India demonstrates this deep fascination. The Silk Road became the main East-West trading route in the Asian hitherland while the Straits of Malacca stood as a major sea route.
Prior to World War II, most of Asia was under colonial rule. Only relatively few states managed to remain independent in the face of constant pressure exerted by European power. Such examples are China, Siam, and Japan. Japan in particular managed to develop its economy due to a reformation in the 19th century. The reformation was comprehensive and is today known as the Meiji Restoration. The Japanese economy continued to grow well into the 20th century and its economic growth created various shortages of resources essential to economic growth. As a result the Japanese expansion began with a great part of Korea and China annexed, thus allowing the Japanese to secure strategic resources. At the same time, Southeast Asia was prospering due to trade and the introduction of various new technologies of that time. The volume of trade continued to increase with the opening of the Suez Canal in the 1860s. Manila had its gallion or Manila galleon wherein products from the Philippines were traded to Europe. The Philippines was the first Asian country to trade with Latin America via Acapulco. Tobacco, coconut, corn, and sugar trade was the most in demand during that time. Singapore, founded in 1819, rose to prominence as trade between the east and the west increased at an incredible rate. The British colony of Malaya, now part of Malaysia, was the world's largest producer oftin and rubber. The Dutch East Indies, now Indonesia, on the other hand, was known for its spices production. Both the British and the Dutch created their own trading companies to manage their trade flow in Asia. The British created the British East India Company while the Dutch...