New trade landscape emerging for Asia’s SMEs
New trade landscape emerging for Asia’s SMEs
BEIJING, Jan. 20 — Asia’s Small and Medium Sized Enterprises (SMEs) exporters may benefit from both new sources of consumer demand within Asia, and from the rising volume of trade within the region, said a recent report.
Entitled “Towards the Recovery: Challenges and Opportunities facing Asia’s SMEs,” FedEx Express commissioned the research from The Economist Intelligence Unit (EIU). The report is based on interviews with corporate officers at SMEs, regional experts and a review of recent studies published by leading authorities, including the Asian Development Bank and national governments in the region.
“Small and medium sized enterprises, which comprise 95% of businesses in the Asia Pacific region and employ nearly 80% of the workforce, play a critical role in the region’s economy and will be vital in its recovery and growth in 2010,” said David L. Cunningham Jr., president, Asia Pacific, FedEx Express.
“With demand in the West making a slower recovery than Asia’s rapidly improving economic outlook, this report provides SMEs in the region with an understanding of the new trade dynamics that are emerging here. As a facilitator of trade, we believe the report’s insights will help SMEs to evaluate these new opportunities and tap into the regional recovery underway in Asia.”
One of the report’s key findings examines how SMEs stand to benefit from two new interlocking dynamics within the economies of the Asia Pacific region.
The first is a need to rebalance economies in the region to reduce their reliance on consumers in developed Western markets and turn their attention towards domestic demand. The second is intra-regional trade, by which SMEs in smaller markets in Asia may take advantage of increasing consumer demand in the region’s developing giant economies, namely China.
Against a backdrop of slow economic recovery in the West, Asian SMEs would benefit from an emerging customer base within the region. There are signs that China may be able to provide this, as its middle class becomes wealthier and policy makers seek to rebalance its economy away from a reliance on exports and towards domestic demand.
In fact, in the first three quarters of 2009, China’s retail sales grew by 15.1% year-on-year, almost as fast as before the financial crisis. The buoyant Chinese economy has the potential to anchor a new region wide trade dynamic, with China not just an assembly point for exports to Western markets, but as a final destination for goods from other Asian countries.
“Throughout this decade we have witnessed the flow of goods into China as it has acted as the assembly line for the region, and then exports out of China to the West. This research shows that Asian consumerism is a force that will lead the region back to prosperity,” Mr. Cunningham said.
“Linked to this trend of increasing intra-regional trade is the proliferation of Free Trade Agreements (FTA) that have been signed over recent years in an effort by Asian economies to promote more trade with each other. As of mid-2009 these economies concluded 54 FTA’s among themselves and with countries outside the region.
BEIJING, Jan. 20 — Asia’s Small and Medium Sized Enterprises (SMEs) exporters may benefit from both new sources of consumer demand within Asia, and from the rising volume of trade within the region, said a recent report.
Entitled “Towards the Recovery: Challenges and Opportunities facing Asia’s SMEs,” FedEx Express commissioned the research from The Economist Intelligence Unit (EIU). The report is based on interviews with corporate officers at SMEs, regional experts and a review of recent studies published by leading authorities, including the Asian Development Bank and national governments in the region.
“Small and medium sized enterprises, which comprise 95% of businesses in the Asia Pacific region and employ nearly 80% of the workforce, play a critical role in the region’s economy and will be vital in its recovery and growth in 2010,” said David L. Cunningham Jr., president, Asia Pacific, FedEx Express.
“With demand in the West making a slower recovery than Asia’s rapidly improving economic outlook, this report provides SMEs in the region with an understanding of the new trade dynamics that are emerging here. As a facilitator of trade, we believe the report’s insights will help SMEs to evaluate these new opportunities and tap into the regional recovery underway in Asia.”
One of the report’s key findings examines how SMEs stand to benefit from two new interlocking dynamics within the economies of the Asia Pacific region.
The first is a need to rebalance economies in the region to reduce their reliance on consumers in developed Western markets and turn their attention towards domestic demand. The second is intra-regional trade, by which SMEs in smaller markets in Asia may take advantage of increasing consumer demand in the region’s developing giant economies, namely China.
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