Century of Asian life in the city

Two years ago, the broad consensus was that global rebalancing was heading in the direction of the East. Now, with capital flowing back to the United States, the US Federal Reserve talking about tapering its bond-buying program and Asian markets and currencies retreating across the board, there is doubt whether the Asian growth story is still on.

The global rebalancing story was basically about demographics - an aging advanced society competing against younger emerging markets. But the story of the rise of the East is also about the trend of urbanization - the clustering effect of Asians into cities that will generate higher incomes and new sources of growth. This story remains unchanged.

A 2011 McKinsey Global Institute study, Urban World: Mapping the Economic Power of Cities, estimated that 1.5 billion people living in 600 cities accounted for more than half of global GDP in 2007, with the top 100 cities accounting for $21 trillion - 38 percent, of global GDP. But by 2025, these 600 cities will have one-quarter of the global population and nearly 60 percent of global GDP. As the world urbanizes, income and wealth will concentrate in cities, rather than in nations.