Asia Trade Expected to Explode

Business leaders from Asia's small-to-mid-sized enterprises say they expect growth in trade this year between Asian nations to outpace even the robust trade still growing between Asia and the West, according to a new survey from UPS (Atlanta).

Almost 70% of the survey respondents say they expect growth in intra-Asia trade volume this year. That compares to about half of the respondents who project more growth this year in trade between Asia and the United States and between Asia and Europe.

"Asia's role in foreign trade with the United States and Europe is well documented and nothing indicates it will slow any time soon," said David Abney, president, UPS International. "However, the intra-Asia trend is certainly one that's well worth watching and one that could present great opportunity for companies with a global presence."

The UPS Asia Business Monitor surveyed more than 1,200 executives from small-to-mid-sized businesses in 12 key markets. It focused on small-to-mid-sized firms because they form the backbone of many Asian economies.

The survey found that most Asian business leaders--71%--are optimistic about the overall state of the Asian economy and expect to see continued growth over the coming year.

Along with economic optimism, the survey also highlights challenges for small-to-mid-sized businesses in Asia. Across the region, respondents say that innovation, availability of qualified staff and access to funding and working capital are their biggest concerns. Respondents in developing markets including China, Indonesia, Thailand and the Philippines also cite legal framework, supply-chain efficiency, access to overseas markets and access to market intelligence and other business information as additional obstacles to their businesses.

Business leaders in India were undeterred by challenges and show great optimism in their country's growth prospects. A total of 43% of respondents there say that they believe India will be on par with China, in terms of economic growth potential, within three years. Respondents from India also are more optimistic about trade growth with the United States. A total of 76% of respondents there project trade with the United States will increase in the year ahead.

As with many U.S. businesses, China is a key market for Asian companies. Small-to-mid sized business presence in China has increased for all countries except Japan, where it has fallen significantly.

A majority of respondents also acknowledge that doing business in China is not without risk. Close to 70% of those surveyed say that intellectual property protection is their greatest concern when doing business in China, followed closely by transparency, government intervention and trust in business partners.

A few survey highlights:

  • Asia's providers of credit and finance receive failing grades for their service.
  • Information Technology and Telecommunications is cited as the most important industry in Asia, followed by Financial Services, Healthcare & Pharmaceuticals and Utilities & Energy. Tourism also has a strong showing.
  • The No. 1 social concern was identified as Pollution and the Environment.
  • Respondents in Korea are among the most optimistic about business prospects.
  • Respondents in China expect the 2008 Beijing Olympic Games to be transformational for the nation's economy.
  • A greater number of respondents in China say that Southeast Asian businesses are increasingly competitive.

For full survey results, log onto: www.upsinasia.com/abm.

Source: UPS

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