For the past 40 years, the Pacific Rim has been, if you will, California’s trump card. But now, in the age of President Donald Trump and decelerating globalization, the Asian ascendency may be changing in ways that could be beneficial to our state.

Rather than President Barack Obama’s famous “pivot to Asia,” it now might be more accurate to speak of Asians’ pivot to America. Once feared as a fierce competitor, East Asia is facing an end to its period of relentless growth, and now many interests appear to find that the United States offers a more secure, and potentially lucrative, alternative.

This era reflects profound changes in East Asia’s prospects. They increasingly are coping with many of the demographic, social and economic challenges that have bedeviled the West since the 1970s — competition from cheaper countries, technological obsolescence, a demoralized workforce and diminishing upward mobility. The verve of the late 20th century is being supplanted by the anxieties of the early 21st.

Demographic decline

Forty years ago, overpopulation constituted the big issue facing East Asia. Governments from Singapore to Korea and, most importantly, China, imposed anti-natalist policies, fearing that their economic success would be overcome by a tide of new citizens. Today, East Asia confronts the world’s most stagnant demography.

By 2030, according to the United Nations, Japan, still the world’s third-largest economy, will have more people over 80 than under 15, and, by 2050, it is expected to see its population fall by 15 percent. Many of the other Asian “tigers,” which followed Japan’s model, are saddled with a fertility rate so low that, over the next 35 years, they will join the island nation among the most elderly nations on earth.

East Asia’s demographic crisis will hit critical mass once China, the planet’s second-largest and most dynamic large economy, feels the full impact of its super-low fertility rate. By 2050, China’s population will have a demographic look like ultraold Japan’s today — but without the higher affluence levels of its Asian neighbor to pay for all of the retirees.

Technology and the challenge of Trumpism

The rise of the Pacific Rim was driven, in large part, by manufacturing growth. Following the model of Japan, Asian countries grew by keeping imports out and building enormous surpluses of manufactured goods. The resulting imbalances were accepted by American administrations even when exacerbated by mercantilist policies directed against our own producers.

The acceptance of such an arrangement ended in 2016 with the election of economic nationalist Donald Trump. But the new trade environment also includes the effective capture of the Democratic Party by elements close to Vermont’s Sen. Bernie Sanders, now America’s most popular politician. Sanders is fiercely skeptical on free trade, and his candidacy even forced Hillary Clinton, a long-time globalist, to back protectionist policies.

Trump’s proposals to match China’s import fees and to hector companies into keeping jobs in the United States represent a huge threat to the mercantilist Asian economic model. This, at a time when new automation technology, cheaper energy and rising wage rates also are persuading Asian producers to shift production to the United States.

California at the end of the Asian era

In the early decades of the Asian era, California sat in a privileged position. Even as Asian industries devastated the Rust Belt economies of the Midwest, and the furniture and textile economies of the Southeast, California gained by providing Asia with food, high-tech goods, design services and touristic opportunities. The ports of Los Angeles and Long Beach rose as Asian trade surpassed that with Europe, turning Southern California, for the first time, into the nation’s top trade hub.

Later, as Asian countries rose in the value-added chain, they began to compete in areas like high-tech electronics, aerospace and biomedical devices. Yet, California’s more innovative culture survived the onslaught by reinventing itself and establishing a dominant position in industries from biotech and software to social media and space exploration. The recent development of massive energy deposits and a somewhat higher birth rate further enhance America’s fundamental appeal to Asian investors.

However dysfunctional our political system may seem, the American Enterprise Institute’s Michael Auslin notes, it is far better than China’s often capricious, autocratic state. South Korea’s domestic politics also are unstable, and the country faces an existential threat from a lunatic next door. Japan’s government has barely been able to boost its annual growth rate above 1 percent, according to World Bank data, and its companies are hoarding more than $2 trillion in unused liquid assets.

These conditions are leading Asian firms and individuals to pour investment capital abroad, with China alone totaling $725 billion last year, according to the Institute of International Finance. In California, Pacific Rim firms are buying up technology firms like Broadcom, acquired by the Singapore-based Avago, as well as entertainment-related businesses and real estate. The Chinese property buying binge more than doubled last year, despite the Beijing government’s attempts to slow it down. This includes both massive homebuying in Irvine and sales of Asian-marketed “vertical safe deposit boxes” in downtown Los Angeles.

Perhaps more importantly, we also see a wave of talented and ambitious immigrants, notably from China and India, who have decided to make theirs an American dream, often through entrepreneurial ventures. Asia’s economic rise may have already crested, but California’s opportunity to benefit from this change of trajectory could be just beginning.

Originally published in the Orange County Register.

Cross-posted at New Geography.