Baker & McKenzie Forum Discusses the Risks and Rewards of Asia Pacific as a Center for Global Growth
Firm News
February 24, 2010
Sydney, Australia, 24 February 2010 – International business is experiencing a two speed recovery following the Global Financial Crisis, with developed nations growing much more slowly than developing economies.
Against this backdrop Asia Pacific now represents a beacon of opportunity for corporations and investors.
In a panel discussion at Baker & McKenzie’s Asia Pacific Meeting being held in Sydney today, delegates were warned however that companies needed to carefully analyse the regional business and regulatory landscape before embarking on any regional adventures. Baker & McKenzie partner, David Jacobs noted: “Many Australian companies see Asia as a lolly shop – but they may get a stomach ache. It’s not easy to make money.”
Joining Mr Jacobs on the panel, which was moderated by ABC journalist Kerry O’Brien, were Peter Barge, international director Asia Pacific, Jones Lang LaSalle; Graham Bradley, chairman of HSBC Bank Australia, Stockland Corporation, Boart Longyear, Anglo American Australia and Po Valley Energy and a director of Singapore Telecommunications, also president of the Business Council of Australia, Tom von Oerzten, partner and director of the Boston Consulting Group Sydney, and Poh Lee Tan, Asia Pacific Regional Chairman of Baker & McKenzie.
Panellists noted that to be successful in the region Australian companies had to learn to do things inexpensively when establishing a foothold in emerging markets. They also had to be fully informed about the business and political landscape of the countries in which they planned to do business.
Ms Tan told delegates that the global regulatory landscape was in flux and that companies needed to closely monitor developments as they unfurled.
Mr Jacobs said that there were three factors to examine when considering establishing operations in Asia Pacific: “Is the law codified, what is the executive legal process, and is it a good process?”
Panellists indicated that Australia and Australian companies were well placed to participate in the growing regional economy as they enjoyed a reputation for good governance, regulatory transparency and a perception of relatively low risk.
Meanwhile it behoved other nations – China in particular - to put in place governance and laws that would allow them to move up the value chain and so encourage high value IP manufacturing to relocate operations to those countries.
While current indicators pointed to continued strong growth in the region, panellists warned that this might be hard to sustain unless India and China in particular became avid consumers, rather than purely exporters of products and services. Unless regional consumption picked up there was a risk of a double dip recession, they warned, as Asia Pacific countries struggled to fully utilise their increased investment in manufacturing and infrastructure since demand from developed (particularly North Atlantic) countries remained sluggish.