Asia companies flex more muscle in world trade - report
London: Companies in nine East and South-East Asian countries are to play a greater role in global trade in the next decade with a survey on Thursday showing their spending on foreign expansion could rise 60 percent by 2020. Audit and advisory firm Ernst & Young surveyed 600 companies in Singapore, Malaysia, Taiwan, South Korea, Thailand, Indonesia, Hong Kong, Vietnam and China and found these companies were become far more active in terms of expansion.
The survey found spending on foreign investment by these countries was expected to rise to $400 billion by 2020 compared to $240 billion in 2011.
The survey also found that the biggest companies in these markets were not seeking to invest primarily in Western markets but were looking to neighbouring Asian markets for expansion with China seen as the best opportunity for growth.
"Once viewed by Western multinationals primarily as a source of low-cost labor and manufacturing, Asian players are now international players in their own right," Ernst & Young said in a statement.
Forty-two percent of the 177 biggest companies surveyed chose China as their best opportunity for growth, followed by India at 33 percent, Indonesia at 29 percent and Vietnam at 25 percent.
The report, "Beyond Asia: Strategies to Support the Quest for Growth," attributed this focus to the larger capabilities of these firms which allowed them to handle large Asian markets.
The survey found 32 percent of 316 regionally focused firms operating within Asia saw Western Europe as their best opportunity for international growth.
It found 28 percent listed the Middle East and North Africa (MENA) as the most attractive places for future investment, "thanks to the attractively priced assets of the former and the cost-effective manufacturing of the latter".
The report identified several risks, saying that new local markets may have nuances that are hard to understand or control, especially for a local management team without a global outlook.
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