The trend towards urbanisation rising domestic consumption and middle-class demands, near-total mobile penetration and a need for infrastructure investment are driving business confidence in many Asian economies.
This is the finding of a PricewaterhouseCoopers (PwC) Survey of nearly 500 business leaders in Asia Pacific. The Survey, titled, ‘Towards Resilience & Growth: Asia Pacific in Transition,’ released at a meeting of the Asia Pacific Economic Cooperation (APEC) in Bali, Indonesia on October 7, 2013.
The Survey, which incorporated an analysis of their attitudes towards doing business in the region, found that 42% of Chef Executives in Asia Pacific were ‘very confident’ of revenue growth over the next 12 months and that about 70% of them intended to increase their investments in the region.
Enlarging vision
PwC New Zealand Chief Executive Officer Bruce Hassall said that New Zealand businesses should look further than their traditional trading partners and retune their companies to take advantage of the transformation taking place across the Asia Pacific economies.
“Millions of people on our country’s doorstep are enjoying new found spending power. Businesses should decide how they will respond and change to remain competitive and benefit from this growing consumerism,” he said.
China leads
He said that China will become more important as a buyer of our New Zealand goods than a maker as their middle classes continue to grow and demand the quality products we can produce.
“Forget made in China, think consumed in China,” he said.
Twenty-nine New Zealand business leaders contributed their views to the survey, including Chairman of Wellington Drive Technologies and New Zealand Forest Research Tony Nowell.
Mr Nowell said that the rise of middle-income consumers across Asia is influencing New Zealand business growth strategies.
“We are restructuring, and we are moving to much more of a commercial profile in our business in Asia. We still have manufacturing there, but we are probably doing more outsourcing today and spending more of our effort in the distribution part of the supply chain, working with customers and understanding their needs,” he said.
Harmony in regulation
A fifth of business leaders say regulatory consistency across the region could unleash more investment if rules concerning intellectual property, corporate governance and services are haromonised.
Mr Nowell said, “If you’ve got regional agreements that cover 10 or 12 or hopefully one day, 21 economies, you take a great deal of complexity away. That reduces costs. It reduces waste. It makes things more available because companies will make the products more available if there is less complexity in dealings.”
Indonesia tops
The Survey also asked executives to identify their ‘dark horse’ pick – an Asia Pacific economy that could surprise with more business opportunity than is currently expected.
Indonesia was the top pick, followed by Myanmar, China, the Philippines, and Vietnam. Among the most cited attractive qualities were expanding middle classes, ample natural resources, increasing transparency, infrastructure improvement plans and political stability.
