HSBC Holdings PLC is upbeat on inter-Asia trade as protectionism sentiments rise in the US and some EU countries.
Developments like the Brexit vote in the UK and US president-elect Donald Trump’s plans to scrap the Trans-Pacific Partnership, as well as rising popular opposition against the Transatlantic Trade and Investment Partnership in Germany and France, do not bode well for trade liberalization and regional integration, HSBC senior trade economist Douglas Lippoldt said in a report published last month.
In contrast, Asia still views trade positively, as emerging markets in the region aim to perpetuate economic performance improvements gained from promoting market openness, Lippoldt said.
Asian leaders have launched a number of ambitious initiatives, including the Chinese-led Regional Comprehensive Economic Partnership and the implementation of the WTO’s Trade Facilitation Agreement, as well as Asian support for the nearly complete WTO Environmental Goods Agreement, the report said.
Asia’s prospects are boosted by China’s “One Belt, One Road” initiative, which is expected to tackle issues like customs cooperation and trade policy coordination, as well as ASEAN’s Blueprint 2025 on expanding services trade, the report said.
With operations spanning 71 markets across the globe, HSBC is eyeing opportunities as Taiwanese companies heed the government’s “new southbound policy,” Tim Evans, HSBC head of commercial banking in international markets for Asia-Pacific, told a news conference in Taipei last week.
To help Taiwanese companies reduce costs, HSBC offers streamlined services for receivables management, trade financing and letters of credit for groups of firms that have a history of working together in a supply chain, such as between an upstream materials supplier and a downstream manufacturer, Evans said.
Meanwhile, a number of Taiwanese companies have begun to leverage their technical know-how in transforming themselves into a service business model to reduce reliance on exports, said Stanley Hsiao (蕭仲程), head of commercial banking at HSBC Bank (Taiwan) Ltd.
In terms of service exports, Taiwan’s medical services, infrastructure and construction and mass transportation industries have the best know-how and the highest competitive edge, Hsiao said.
A number of Taiwanese companies have moved up the value chain by taking on more lucrative offerings, such as design services, or by acquiring and operating established brand names, and now enjoy much higher margins after transitioning out of the original equipment manufacturing business model.
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