New trade landscape emerging for Asia’s SMEs

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.