New research shows chinese economic boom bringing varying fortune to asia pacific business

Hong Kong is benefiting most from the 'Chinese economic boom', according to new research among business owners in the Asia Pacific region. The Grant Thornton International Business Owners Survey (IBOS) asked business executives in Australia, Hong Kong, India, Japan, New Zealand, the Philippines, Singapore and Taiwan whether they had seen increased business over the last two to three years because of the 'Chinese effect'.

Sixty per cent of those surveyed in Hong Kong said they had seen increased business. Business owners in the Philippines (38 per cent), Australia (31 per cent) and Taiwan (30 per cent) saw the next highest increases. Unlike its neighbour Australia, New Zealand along with India had seen the lowest increases in business (both 15 per cent).

The picture in the Philippines and Taiwan is mixed. Twenty six per cent of business owners in the Philippines and 18 per cent in Taiwan said they had suffered a loss in business due to the Chinese boom.

Business owners were also asked about how much they export to China and how much they import from China and whether they had operations in China. Hong Kong and Taiwan top the list of exporters with 29 per cent of business owners in both countries saying that they did. Hong Kong was also the highest importer from China (54 per cent), followed by the Philippines (37 per cent), Australia (29 per cent) and Singapore (25 per cent). Hong Kong businesses had the most operations in China (71 per cent) followed by Singapore and Taiwan (both 21 per cent). Most companies in the Philippines (89 per cent) and New Zealand (86 per cent), however, have no existing operations in China and have no plans to set up operations there.

Gabriel Azedo, Managing Partner of Grant Thornton Hong Kong and Divisional Director of Grant Thornton International's Asia Pacific Divisional office comments:"Whilst Hong Kong stands out from others in enjoying the benefits of the Chineseeconomic boom, many other Asian economies also express strong feelings. It isinteresting to see that, while enjoying positive impacts as a result of China's growth, thePhilippines and Taiwan are wary of the competition China poses."

IBOS also asked respondents a series of questions about positive and negative impacts the Chinese boom had had on their businesses.

Positive impacts

• Most business owners in the Philippines (57 per cent), Hong Kong (51 per cent) and Singapore (51 per cent) said that they had benefited from greater access to cheaper labour markets in China. Business owners in New Zealand (15 per cent) agreed least.
• The Philippines (59 per cent), Singapore (49 per cent) and Australia (40 per cent) are taking most advantage of access to cheaper imports from China.More business owners in Taiwan (34 per cent), the Philippines (34 per cent) and Singapore (32 per cent) agree that there are increased opportunities for exporting to China. Only eight per cent in Japan and 15 per cent in New Zealand agreed.
• The opportunities for outsourcing back office services to China were seen by most business owners in the Philippines with 50 per cent agreeing, Singapore (48 per cent) and Hong Kong (47 per cent).

Negative impacts

• Taiwan and the Philippines are suffering most from increased competition from China. Eighty six per cent in Taiwan agreed that there was increased competition and 74 per cent in the Philippines.
• Taiwan also topped the list for seeing increased competition for labour with (74 per cent) and increased competition for capital (57 per cent).

Notes to editors

The Grant Thornton International Business Owners Survey (IBOS) was carried out among over 6,300 owners of medium sized businesses from 24 countries during Autumn 2004. IBOS began in 2003 and builds on the European Business Survey (EBS) which Grant Thornton ran from 1993 to 2002. The research was conducted by Experian Business Strategies Limited and Harris Interactive.

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