Doing Business in Asia
Asian markets, such as China, India, South Korea, Philippines, Malaysia, Taiwan, and Indonesia have long been thought of as less developed. Apparel manufacturing companies often move their production to these countries to capitalize on the low labor costs. The rise of the middle class, especially in China has contributed to the emergence of these economic markets.
South Korea has an export-oriented economy and established a trade agreement with the United States, US-Korea free trade agreement. South Korea is home to some well-known corporations such as Samsung Electronics Co. Ltd., Hyundai Motors Company Limited and Kia Motors Corporation. South Korea has the potential to grow but must deal with issues, such as exports making up a large portion of its GDP.
Malaysia, in 2008, was identified as a country that experienced a growth of at least 7% in its population for 25 years or more. The country is among the leading exporters of electrical appliances, electronic parts and compliance, palm oil, and natural gas.
India’s results of its 2014 elections provided investors and citizens with a positive outlook on the future of the country’s economy. The Modi-led Bharatiya Janta Party(BJP) promised to create a more business-friendly environment that would attract the interest of foreign investors. These changes coupled with the country’s favorable demographics, rising consumerism, and low oil prices make India a very attractive place to conduct business.
The Philippines’ GDP grew at an annual rate of 6.3% from 2010-204. The strength of the country is its workforce, which consists of young English-speaking. The household debt is low, while interest rates and inflation is contained. The country does have to figure out how to deal with poverty, unemployment, as well as the inequality of income.
Taiwan issues are complex mainly because of its relationship with China. China considers Taiwan as a part of its country, so it doesn’t get individual recognition as a separate state. To add insult to injury Taiwan doesn’t have that many diplomatic relationships with other countries because of this. Taiwan has a great economy, but this has been obtained because of its relationship with China.
Thailand has transformed itself from a “low-income” nation to an “upper-middle income” country as noted by the World Bank, in less than three decades. Given the dynamic growth within the country, it offers great investment opportunities.
China’s economy has slowed recently, but it is still outperforming most countries. In terms of nominal GDP, China has the second largest economy behind the United States. If you look at a purchasing power parity (PPP) GDP, then China has the largest economy. China’s GDP is predicted to grow by at least 7% for years to come.
Indonesia experienced an average growth rate of 5.3% from 2000-2014. The country boasts manageable inflation, a sound financial sector and new policies put in place to attract foreign investment. The country will need to handle corruption, poverty, and lack of infrastructure.
Doing business in Asia has become increasingly attractive over the years with the growth and revitalization of these countries economies. The improvement of infrastructures, the enhancement of the skill level of the workforce, and many other factors combine to make these markets desirable.