Business Investment Opportunities In Asia

By M. Isi Eromosele

Asia, with its high energy economies and constant innovation, present a unique environment for business investment opportunities. China has certainly made its presence felt in the global market, with an economy that is growing faster than that of any other country in the world.

With an average economic growth rate of 12 percent during the past decade, China is changing the face of global business competition and economic power. With converging factors such as high level of exports, a vast pool of low wage labor and extraordinary level of direct foreign investment, China is fast becoming a global economic powerhouse.

The huge and still growing Chinese population offers a major market to international companies in several industries. Japan, which has the world’s second largest economy, is economically stirring again after a decade of moribund economic performance, helped by Chinese demand for its capital goods.

Korea, which had overtaken Japan in steel production, shipbuilding and semiconductors, is now on the verge of doing the same in consumer electronics. With China setting the pace, these big Asian economies, as well as others such as India, Thailand, Philippines and Indonesia are becoming key players in the world economy which multinational companies cannot ignore.

Southeast Asia has recovered swiftly from the global financial crisis that started in 2008, helped by large monetary and fiscal stimulus packages efficiently implemented by governments to support domestic demand. While there are recent uncertainties surrounding the global economy, specifically the European sovereign debt crisis, the recovery in Asia has not being derailed.

Singapore expanded its gross domestic product by 15.5 percent on a year-on-year basis in the first quarter of 2010. The economic GDP in Malaysia grew by 10.1 percent year-on-year while growth in the Philippines reached 7.3 percent.

Despite recent political difficulties, Thailand posted a first quarter GDP that rose 12 percent from a year earlier, its fastest growth in more than a decade. Activity has remained robust across the region in the second quarter of 2010. For example, Singapore’s exports have risen up 2.1 percent in April from March.

The rebound reflects how fiscally strong the region was at the start of the recent global recession. Following the 1997-98 Asian economic crises, the financial system in the region was thoroughly reformed. As such, governments had enough monetary and fiscal space to boost liquidity and maintain their economies during the recent crisis.

The stimulus provided by governments allowed Asia to weather the global downturn and perform better than expected, although with significant variance across various economies in the region.

China’s booming economy has had a positive pull on the recovery of the economies in this region, by taking a rising share of Asia’s exports. Though Asian domestic demand has risen, China remains an important destination for the region’s exports.

With a healthy fiscal position and sound macroeconomic management, helped by strong infrastructure, the region is in a much better position to assimilate added foreign investment from companies that are looking for business opportunities in various industries.

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

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