THE FINANCIAL TIMES - A Coherent Voice for Asia? E-mail
Friday, 26 August 2011 10:49

By David Pilling


Just what the world needs – another think tank. Except that maybe, just maybe, this is a good idea. This week saw the launch of the Fung Global Institute, a self-styled Hong Kong-based independent research institute that wants to be the Brookings of Asia. Its mission is to produce “business-relevant research on global issues from Asian perspectives”.

There are a few red flags here, of which later. But the idea itself is timely. If Asia continues to grow at anything like its current pace, it will play an increasingly important role in the global economy. Yet it lacks anything like a coherent, intellectual voice. The global dialogue is being held in Washington, New York and London. Asia’s views deserve to be heard more – and not just in cacophony of a forum like the G20.

The institute kicks off with $15m, courtesy of the Victor and William Fung Foundation. Not enough to start a football team, but still. The Fungs are the brothers who built Li & Fung into the world’s largest trading company. If you’ve ever bought anything at Walmart you have Victor and William to thank – or to blame.

They’ll be looking for another $85m from business to get the institute started and hope eventually to have 30-50 research fellows, plus a network of associated scholars.

The president of the institute will be Andrew Sheng, former chairman of the Hong Kong Securities and Futures Commission. Michael Spence, winner of the 2001 Nobel Prize for economics and former dean of Stanford Business School, will be chairman of the academic board, although he won’t live in Hong Kong. Victor Fung will be chairman of the board of directors.

The institute, which will hold an annual forum in Hong Kong, will concentrate on four main areas of research. First is the global supply chain, an area obviously near and dear to the Fungs, but a useful way of looking at a global economy that is no longer always best divided into nation states. Second is global governance, concentrating on finance. That sounds a bit dull. But it does play into the global debate about financial regulation, tax regimes and so on. Third comes China’s new growth model – what Prof Spence describes as a look at a “middle income transition economy” – and a rather important one at that. This presumably will study such areas as China’s efforts to shift its focus towards domestic demand and to move up the value chain.

Last, and most intriguingly, comes “global growth sustainability”. If the Chinese and Indians all start living like Americans, then we are all doomed. (I checked with Nobel prize-winning Prof Spence, and “doomed” – or “cooked” in his version –  is apparently the technical term for it.) So what kind of lifestyles should Asians be seeking if they are to marry their absolutely legitimate aspiration for advanced-country incomes with sustainability? No doubt Nicholas Stern, author of the eponymous report on global warming and one of the institute’s “founding experts” (whatever that means) will have something to say on the subject.

These are promising subjects of inquiry. Done well, such research could fill a genuine gap. What about the potential pitfalls? One is that the lack of a coherent Asian voice is not for want of an institute. It is because Asian nations have vastly different experiences and agendas. To put it bluntly, there really isn’t any such thing as Asia at all. What Japan, China and India might like to say about regional security issues, for example, would be rather different, not to say diametrically opposed. Ditto their likely views on banking reform, floating exchange rates, or corporate governance. These varying views reflect different levels of development, different political systems and competing national interests.

Promisingly, Victor Fung stresses “Asian perspectives”, adamantly and consistently in the plural. Thankfully, too, the institute shows no signs either of trotting out tired clichés about “Asian values”. It is unlikely to become a forum for lecturing the Americans on the virtues of thrift.   

What about the $85m from business and the association with the Li & Fung company itself? The institute makes no apologies for wanting to work closely with business and for seeing business as a catalyst for change. That is fine. The danger is that its academic independence falls hostage to a business agenda and the institute becomes just another lobby group for low taxes and light regulation. At all costs, it must guard against that.


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