5 April 2007

 

 

 

 A key segment of Asia's business leaders believes the 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, according to a new survey by UPS.

            The survey of 1,200 leaders of small- and mid-sized businesses in Asia also found wide agreement that China will surpass the United States as the world's largest consumer economy within 10 years or less….

 

"These findings are significant because these small business leaders on the ground in many Asian economies say that China's consumer market is growing faster than some leading researchers project," said Alan Gershenhorn, president of UPS International, in a statement. "American businesses must understand that their future customers are just as likely to hail from Beijing as from Boston."

            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. About 1,200 SME decision-makers were interviewed in 12 different markets in the region. 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 said they feel they are unable to compete with Chinese companies in terms of low labor and production costs (38 percent), and that there is a growing concern regarding increased price competition (25 percent)….

            Eighty-five 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. Small business leaders in India were the most optimistic in the region, with 89 percent of respondents expecting greater economic prospects for their businesses in the year ahead….

            Although bullish on the region's growth prospects, survey respondents also warned about threats to the region's competitiveness, such as a lack of innovation, the availability of a qualified workforce and access to funding and working capital.

            The top three business concerns that keep small business leaders up at night in Asia are the quality of their services (50 percent), customer loyalty (48 percent) and the retention of quality employees (47 percent)….