Explosion of intra-Asian trade

According to a new UPS study, business leaders from small and medium-sized enterprises in Asia expect an increase in trade between Asian countries this year. This growth may be even greater than the developing, intensive trade exchange between Asia and the West.

Almost 70 percent of the surveyed respondents stated that they expect an increase in intra-Asian trade volume this year. About half of the respondents predict greater growth in trade between Asia and the United States and between Asia and Europe this year.
– The role of Asia in foreign trade with the United States and Europe is undeniable, and there is no indication that it will decrease in the near future – said David Abney, UPS International president. – However, it is also worth paying attention to the intra-Asian market, which can be a great opportunity for companies with a global reach.

The UPS Asia Business Monitor study involved over 1,200 senior executives from small and medium-sized enterprises across 12 key markets. The survey focuses on these types of companies because they form the foundation of many Asian economies. The study found that the majority of Asian business leaders – 71 percent – are optimistic about the overall state of the Asian economy, expecting further growth in the coming year.

Barriers for small businesses

Despite the prevailing economic optimism, the survey also highlights the challenges facing small and medium-sized enterprises in Asia. Respondents across the region stated that innovation, a skilled workforce, and access to funds and working capital are their biggest concerns. Respondents from developing markets, including China, Indonesia, Thailand, and the Philippines, also cite legal frameworks, supply chain efficiency, access to foreign markets, and access to market and other business information as additional obstacles.

Optimism in India

Business leaders in India have not been discouraged by the challenges and have shown great optimism regarding the prospects for domestic growth. 43 percent of local respondents believe that within three years, India will reach a position equal to China in terms of economic growth potential. Respondents from India are also optimistic about the growth of trade with Europe, which 65 percent of local respondents believe will take place in the coming year.

The China factor

Just as for many companies in Europe and the USA, China is also a key market for Asian companies. The presence of Chinese small and medium-sized enterprises has increased in all countries except Japan, where their involvement is significantly declining. Most respondents also admit that doing business in China involves certain risks. Nearly 70 percent of those surveyed say that their biggest concerns when operating in this country are intellectual property protection, followed by operational transparency, government interference, and trust in business partners.