A key segment of Asia’s business leaders believes their region’s economy will continue to enjoy strong growth in 2007, but many are more excited about the growth of India than they are China, a new survey shows.
The survey of 1,200 leaders of small- and mid-sized business enterprises (SME) in Asia, which was commissioned by UPS, also found wide agreement that China will surpass the US as the world’s largest consumer economy in 10 years or less. Only fi ve percent of those surveyed said that China’s consumer market would never grow as large as that of the US. More than half (57 percent) said the two markets would reach parity within 10 years, with 20 percent of those respondents expecting the gap to close within five years.
The business executives were interviewed for the UPS Asia Business Monitor, an annual survey designed to gauge the competitiveness of small- and mid-sized enterprises in Asia.
Survey respondents ranked China as the country with the greatest prospects for economic growth, followed by India and Hong Kong. But there was ambivalence about China’s growing economic power.
Asia SME leaders seemed equally divided between those viewing China’s continued dominance as a boost (34 percent) and those who perceive it as both a boost and a threat (34 percent). Many also feel they are unable t to compete with Chinese companies in terms of low l labour and production costs (38 percent), and there is a growing concern regarding increased price competition (25 percent).
In contrast, SME leaders across Asia expressed a desire to capitalise on India’s rapid growth by leveraging its continued rise as a manufacturing base (30 percent) and outsourcing there (25 percent). In line with this growth, SME leaders also express a desire to become an outsourcing destination for India (20 percent), and an exporter of raw materials to India for manufacturing (19 percent).
Eighty-fi ve percent of respondents said that India is or has the potential to be a regional economic leader, and 81 percent said that India’s economy is certain to grow in 2007.