ASEAN Firms Most Upbeat About Global Trade Despite Tensions
Despite recent trade tensions and economic headwinds, firms across the
ASEAN bloc remain very positive about their foreign trade prospects, more
than any other trade bloc and higher than the global average, the HSBC
Navigator survey showed in early November.
The survey—which polled 1,000 businesses from ASEAN’s largest markets
Indonesia, Malaysia, Thailand, Vietnam, and Singapore between July and
September 2018—found that 86 percent of companies across ASEAN are
positive about their foreign trade prospects, more than any other trade
bloc and higher than global average of 77 percent.
In addition, less than a quarter—or 22 percent—of ASEAN businesses
expect the US-China trade dispute to hinder their prospects over the next
three years, compared to 31 percent of over 8,650 businesses surveyed
Three-quarters of respondents in ASEAN believe that governments around
the world are becoming more protectionist, higher than the global average
of 63 percent. Views regarding the impact of regulations, however, are
more nuanced, with 34 percent of ASEAN firms seeing them as adding to
the cost of doing business, but 36 percent viewing regulations as helping
ASEAN companies in both goods and services increasingly view technology
as the centre of their business strategies, with 37 percent of ASEAN goods
companies and 34 percent of service companies saying they are focused
on increasing the use of digital tools and technology, compared to 28
percent of businesses globally. Increasing profits and revenues and
reducing costs are the top two drivers of ASEAN businesses to seek
changes to improve their supply chain efficiency, the survey found.
“Businesses operating in ASEAN markets are overwhelmingly bullish of
their commercial prospects and also expect protectionist policies to rise,”
HSBC Singapore CEO Tony Cripps said, commenting on the results.
“This seems counter-intuitive and certainly raises the question of whether
they are underestimating the trade risks that come with rising
protectionism or are shrewdly seeing opportunity from any trade
disruption. Either way, supply chain diversion is coming ASEAN’s way and
business needs to be ready,” Cripps noted.