Emerging markets 'key' to prosperity
Thai companies should establish a firm foothold in emerging-market Asia, which is expected to see higher intra-regional trade over 15 years despite China lowering the annual growth target for its gross domestic product to 7.5 per cent, according to HSBC T
“The opportunity Thai companies should tap into is likely higher trade volume among emerging markets, not only Asia, but also Latin America and the Middle East. [They should] explore and penetrate these markets,” said Kanoksak Mokkamakkul, head of commercial banking at HSBC Thailand.
Trade within the Asia-Pacific region is expected to expand at 6.5 per cent per year over five years, substantially outpacing the estimated 3.78-per-cent growth of global trade during the same period, according to “HSBC Trade Forecast”.
“Asia-Pacific’s annual trade-growth rates will consistently |outperform the world average, |with the gap widening through-|out the next 15 years,” he said.
HSBC’s report projects the region’s annual trade growth index to surge by 111.92 points over 2012-16, compared with an increase of 92.39 points for the global trade growth index.
Thailand could find long-term opportunities in trade and investment in emerging Asia, led by China. These emerging countries could continue to show high GDP and trade growth rates as they produce such necessities as intermediate goods, electronic items and foods.
Developed markets such as those in North America and Europe will likely diversify supply chains from lower-growth locations to higher-growth areas for higher efficiency and more competitiveness.
“Many are interested in Asian countries, including Thailand, and are searching where to build up their bases and supply chains,” Kanoksak said.
Despite a cut in China’s GDP growth target to 7.5 per cent early last month, signalling its desire to reshape economic development after its largest trade partner, Europe, is expected to experience a recession this year, HSBC continues to be bullish on China.
“That could provide China a healthier economy with more sustainable growth,” he said.
Thailand could continue to benefit from still-high demand from its biggest trade partner, China. That country’s trade is forecast to grow 6.29 per cent per year over 15 years.
Thailand could draw a similar picture, emerging as a key trade partner amid the sluggish US economy and the European slowdown.
However, it could face short-term problems from last year’s floods, an increase in wages, and politics, Kanoksak said.
