Turn to Southeast Asia for growth, HSBC tells international businesses

Reuters pic.

KUALA LUMPUR: International businesses should take a serious look at the fast-growing Southeast Asian region as a location to manufacture in, source from, and sell to, despite the downturn in global emerging markets over the past few months, says HSBC Malaysia.

In a statement, HSBC Malaysia said the region’s manufacturing capabilities played an integral role in global trade and supply chains with local businesses going high-tech, producing anything from high-end fabrics to hard drives and semiconductors.

HSBC head of strategy and planning for Asia-Pacific, Matthew Lobner said the region had come far since the 1997-1998 Asian financial crisis.

“Its constituent economies, broadly speaking, are now more resilient to external financial shocks. Foreign exchange reserves have risen. External debt levels have come down. Current account balances have improved.

“Furthermore, many companies, both established and start-ups, now have the experience and clout to serve international markets and attract sizeable investments from abroad,” he said.

He said Malaysia, Singapore and Indonesia had spawned start-ups such as on-demand workforce portal GoGetmy, e-commerce portal Lazada, and ride-hailing-to-payments companies Grab and Go-Jek, which are rapidly becoming ubiquitous on streets and smartphones across much of the region.

HSBC Malaysia said the coming years were set to bring more economic and financial cohesion and intra-regional trade, which would unlikely be derailed by global trade tensions and periodic emerging market nervousness.

It said domestic and intra-Asian infrastructure initiatives would improve physical connectivity with consumption and innovation picking up speed as urbanisation as well as increasing internet and smartphone penetration transform the way 650 million people shop, bank and exchange information.

“Anyone who is even remotely interested in Asia needs to have this part of the continent firmly on their radar or risk missing out on one of the world’s most dynamic growth stories,” it added.