Asia Pacific is a vast and diverse region and one of the strongest performing parts of the global economy.
GDP growth across Asia Pacific in 2017 is forecast to hit 5.6%, which is well above the 3.6% projected worldwide, and 5.5% in 2018. Against this backdrop, the latest findings from Grant Thornton’s International Business Report (IBR) reflect a buoyant mood across much of the region.
Business optimism in Asia Pacific has hit a two-year high, driven by improvements from its two biggest economies: China and Japan.
What is driving this positive sentiment? The Chinese economy is becoming much more outward looking, reflected both in its One Belt One Road initiative and the movement of lower skilled jobs to neighbouring countries. This outlook is having a positive trickle-down effect across the region.
At the same time, our research shows there are signs that the ASEAN (Association of Southeast Asian Nations) Economic Community is boosting business growth opportunities and the Trans Pacific Partnership is still seen as an opportunity. These factors are reflected in confidence that free trade will prosper across the region over the next five years.
The outlook is not wholly positive, as businesses in Asia Pacific cite aging populations as the biggest threat to the region over the next five years. Potential consequences of this trend include a shortage of labour supply and an impact on government investment. Elsewhere, concerns about territorial disputes still worry Asian business leaders.
Overall, business leaders across the Asia Pacific regions report healthy optimism, fueled by the prospect of greater trade opportunities. Concerns remain which could threaten growth, if unaddressed. In this report we make the following recommendations to help firms navigate the next 5-10 years successfully.
Kenneth M Atkinson
Chairman, British Business Group in Vietnam