While most Asian businesses feel positive about the current trade environment, those in East Asia, including South Korea, Japan and Hong Kong, hold a less rosy outlook compared with their peers in the region due to their heavier reliance on the US and Chinese markets, a report by HSBC Commercial Banking published yesterday said.
Fueled by the region’s robust economic prospects and consumer confidence, 77 percent of Asian firms remain optimistic, despite the ongoing trade tensions, the report said.
Consistent with their global counterparts, 80 percent of Asian businesses are confident they would weather through and succeed in the current trading environment, although the optimism is not evenly spread across the region, said the report, which gathered opinions on trade and business growth from more than 8,500 companies in 34 markets around the globe.
Among the 12 Asia-Pacific markets, India, Bangladesh, Thailand and Vietnam scored the highest in the world, with more than nine in 10 firms having a positive outlook about global trade, the report said.
Businesses in Malaysia and Indonesia join their neighboring markets at the top of the league tables, with slightly less than nine in 10 companies citing strong potential to succeed in the current trading environment, the report said.
While businesses in South and Southeast Asia are brushing away fears of protectionism, their East Asian counterparts hold a more pessimistic outlook, as they might have to face tough choices if the trade dispute drags on, it said.
The report found that companies in South Korea are the least positive and confident among the 34 markets, with fewer than five in 10 firms holding a positive outlook, and their peers in Japan and Hong Kong share the sentiment.
Companies in China, which plays a leading role in the trade war, are more optimistic, with about 78 percent of the firms believing they would manage well.
“Asian businesses are at a crossroads — buoyed by macroeconomics, but concerned about geopolitics,” HSBC Asia Pacific head of commercial banking Stuart Tait said.
Businesses are staying positive, but they are concerned that geopolitics might spill over and lead to an economic downturn, he said.
Although some markets have been adversely affected by volatility and geopolitical pressures, Asia’s rising middle class and increasing level of consumption are long-term structural trends that would power economic growth in the region for years to come, Tait added.
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