IN A NUTSHELL
6
SHIFTING
Figure 3: An overview and outlook by the Economist Corporate Network (ECN)
TRENDS WITHIN
ASIA
Back in 2000, China’s economy was just 12% the size of America. By 2018, the ECN forecast China will overtake the USA and 54% of respondents expect their sales in China to grow by 10% or more this year.
AS AN ATTRACTIVE CBD Survey shows China and India remain dominant but the tide is turnings towards Indonesia, Vietnam and Malaysia according to Asia Business Outlook 2012
Japan is the one part of Asia where expectations for sales growth in 2012 are moderately higher than in 2011. More than half of respondents expect sales in 2012 to be flat or to decline (57%).
by Faza Sakinah & Hazrul Izwan Mr. Justin Wood, Director of Southeast Asia, The Economist Corporate Network (ECN) emphasised that businesses expect their sales growth in Asia to moderate at the “Asia Business Outlook 2012” forum on 18th January 2012. “Based on the survey carried out in December 2011, 64% of respondents recorded sales growth of 10% or more in China and 48% of respondents reported the same sales growth in India”, he added. China and India had been ranked the most attractive countries in Asia in terms of growing sales in production in the manufacturing sector over the past 5 years. In 2012 that trend has shifted towards Indonesia as the being the most attractive followed by China and India. Malaysia is ranked sixth in place for the attractiveness of sales growth with 31%
In 2011, 48% of respondents saw sales grow by 10% and 46% of respondents expect sales to grow by 10% or more in 2012.
The economies of South-east Asia are more exposed to the vagaries of the global economy than China and India, the one exception is Indonesia, where sales growth is expected to remain strong and consistent this year.
of respondents stating it. This change is due to the progress that Indonesia has made over the years such in public debts reduction, a clearer banking sector has cleaned up and a political shift to world democracy.
Figure 4: Are the following countries becoming more or less attractive for revenue growth and manufacturing & production? China Hong Kong India Indonesia Japan Malaysia Pakistan Philippines Singapore S Korea Legend:
Taiwan
Revenue growth
Thailand
90
80
60
50
40
30
20
10
0
-10
-20
-30
-40
-50
Less attractive More attractive Source: Economist Corporate Network
70
Manufacturing & production
Vietnam
Due to the rising cost in China, Indonesia has overtaken China in the attractiveness for revenue growth. As for the attractiveness for manufacturing and production, Indonesia is ranked first place followed by Vietnam, India, Malaysia, while China takes fifth place. 28% of respondents stated that Malaysia is more attractive than other countries. In the past 10 years, Malaysia has lost out to China due to the rise of China but now with the rising cost of China, the tide has turned back to South-east Asia, particularly Malaysia. However Singapore, Pakistan, Hong Kong and Japan fall under the less attractive category for manufacturing and production. Lastly, even though Asia is forecasted to be the world’s central business district this year, experts advice global businessman employ the following measures to tide over slowdown. To manage cost; reduce business class travel, encourage videoconferencing as an option for overseas face-to-face meetings and reduce research and development spending (R&D).