Focus on emerging Asia-Pacific
The Asia-Pacific region has long been a popular manufacturing location and outsourcing base. But with fertile emerging markets developing throughout the whole region is it time to reassess Asia-Pacific?
GDP in East Asia and the Pacific region is set to grow by 6.7% in 2016 and 6.6% in South Asia, according to the World Bank. Compare this to the 1.6% growth forecast for the Euro area. Cambodia, China, India and Laos are all predicted to grow by 7% or more in 2016, with other countries in this area looking very healthy too.
The region's rapidly expanding middle class is set to fuel demand for products and services along every stage of the supply chain. By 2030, two thirds of the world's middle class households will be living and working in Asia according to the OECD.
Business optimism is buoyant across the region: 43% of companies in emerging Asia-Pacific countries surveyed by Grant Thornton in Q1 2015 were positive about the economic outlook for the next 12 months, compared to 33% globally.
|Ranking||Country||Net percentage of businesses optimistic in the economic outlook|
Source: Grant Thornton International Business Review (IBR) 2015.
Well-known destinations in Asia-Pacific – India, Singapore, China, Hong Kong, Australia – have already become familiar to most businesses outside of the region as centres for trade and finance, as well as established markets for goods and services. However, doing business off the beaten track may offer you a competitive advantage.
Vietnam is expected to increase its exports by 11% per year between 2014 and 2020, according to HSBC Trade Forecasts. Its central location in Asia-Pacific makes it's an obvious trade partner with other countries in the region.
Malaysia offers a stable business environment with a developed, modern infrastructure. Government plans to establish the country as an international hub for oil and gas production is attracting substantial private investment.
However, not all countries in Asia-Pacific offer a competitive environment for doing business. Singapore, Hong Kong, New Zealand and Korea may rank in the top five World Bank Ease of Doing Business rankings but they seem to be the exception. Despite high growth forecasts, the business environment is complex in countries like Cambodia, Laos, Myanmar and Papua New Guinea.
Political instability is still a risk in certain parts of South East Asia and adequate disaster risk management is also a pressing issue for the region. Businesses that want to harness Asia-Pacific's growth potential need up-to-date intelligence and reliable insight in order to navigate safely and profitably.