In light of the large redistribution of markets during the period of post-pandemic stabilization of various sectors of the economy in Asian countries, various new forms and innovative approaches to building a business are emerging, not without the participation of solutions of the digital age and the Internet. At the same time, in the business circles of the West, there is an urgent need to bring their goods and services to the markets of the Asia-Pacific Region, while simultaneously attracting investments in highly promising and large projects in various regions of Europe.
Let’s take just 5 symbolic but prospective regional cases for entrepreneurs:
the Indonesian government has passed the 2021 national budget to promote the accelerated recovery of the national economy during the new crown epidemic. Infrastructure is still a key area, and funding for development projects has increased by 47% year-on-year. In view of the above, the industries most likely to benefit will include real estate, raw materials and finance. In addition, the improvement of the investment environment will help stabilize the Indonesian rupiah exchange rate. Considering that the current yield of local 10-year bonds is 6.3% , while Bloomberg’s 2021 general inflation forecast is only 3.0%, this will enhance the attractiveness of the local currency bond market.
The current transformations will also help environmental protection and carbon reduction, promoting the future economic growth of South Korea. McKinsey’s data shows that by 2050, the number of employees in the hydrogen energy industry in South Korea may reach 600,000. By then, the domestic annual revenue of the entire hydrogen energy value chain, including hydrogen energy power generation, power distribution and end-user applications, will reach 70 trillion won. South Korean companies are actively applying hydrogen technology, bringing many new investment opportunities to stock investors. In terms of the use of hydrogen fuel cells (a more efficient energy source) in commercial vehicles and passenger cars, some Korean automakers have taken the lead in the world. South Korea’s shipbuilding industry may benefit from the market’s new demand for hydrogen fuel ships and hydrogen energy storage equipment. With the support of long-term regulatory reforms, hydrogen-powered ships are also expected to emerge.
The two key driving forces in 2021 will be technology and green energy. Leveraging on the global trends in artificial intelligence, 5G (communication base stations, smart phones) and high-performance computing, Taiwanese technology stocks are accelerating advanced technology upgrades (such as the production of 2 to 3 nanometer chips). At the same time, during the Sino-US trade friction, China has been promoting localization, replacing American technology with local applications, while the United States is pushing for alternatives. Some of these trade diversions have benefited China’s Taiwan. This is partly because it is geographically close to China and has trade relations with China. Secondly, the clean energy policy of technology companies has received increasing attention and is promoting the development of global green energy (wind, solar). In addition, Taiwan, China has clearly stipulated that the goal is to make green energy account for 20% of total electricity consumption by 2025. A leading technology company in Taiwan has pledged to fully adopt green energy by 2050, and has signed a 20-year contract with a total of 920 MW with Denmark’s largest energy company. Therefore, green energy components and power grid/power plant stocks will enter a strong upward cycle starting in 2021.
As Thailand gradually reopens its borders to foreign tourists, and driven by the steady recovery of domestic and export demand and financial support, it is expected that the economy will grow steadily at a rate of about 3% in 2022. However, inflationary pressures will tend to moderate, so interest rates will remain low, which is conducive to economic growth. Anti-government protests may continue and affect investor sentiment, but no extreme changes in the political situation are expected. Thailand’s stock market underperformed in 2020, so it has upside potential, and as the economy restarts in 2022, the upside potential of the service industry is particularly considerable. This will in turn stimulate domestic demand and benefit the trade, catering, finance and transportation industries. In a low interest rate environment, the fixed income market is also expected to perform well. The new government bond issuance plan was perfect during the year, and the internal liquidity of the system was abundant. This should help curb the pressure of steepening the yield curve. Corporate credit spreads should continue to narrow, especially for high-quality/high-rated bonds. All in all, we expect the Thai stock market and fixed income assets to provide reasonable returns in 2022.
With a favorable business environment, geographical proximity to China and a number of free trade agreements, Vietnam has become one of the main beneficiary markets of the “China plus one” strategy. A young and huge population will also bring competitive labor cost advantages. Vietnam has become one of the fastest-growing economies in ASEAN by providing various incentive programs to attract foreign direct investment, with an economic growth rate of about 6.8% to 7.0% in the past three years. Despite the outbreak of the new crown epidemic in 2020, the local government has been excellent in fighting the epidemic, and manufacturing and export activities have continued. Therefore, the local economy is expected to grow by 3.0% in 2022. Since foreign direct investment to increase capital, driven by increased demand for production plants, “China plus one” strategy will help boost the industrial real estate sector. The growth of foreign direct investment has also brought about a positive diffusion effect, which is beneficial to supporting industries such as transportation, logistics and warehousing. In addition, Vietnam’s strong economic growth will provide support for industries that benefit from structural driving forces such as growth in local consumption and urbanization.
As you can see from the above examples, Western entrepreneurs will certainly have to “pull up” and management towards similar regional tendencies of the new post-pandemic civilization in the Asia-Pacific Region.
Our 10-session course offers listeners an insight into all regions of the East in perspectives for the development of modern business, administered by their Western Hemisphere during the crisis period. At the same time, we will be able to offer you interesting thematic discussions and cases in promising areas of development for business, as well as outline the modern management models of the new integrated civilization of the East of the third millennium dominating in various sub-regions of Asia.
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