Despite barriers to market entry and concerns of an economic slowdown, Asia's economic influence and potential continue to instil confidence among global business leaders, according to a global research released by Allen & Overy today.
The findings from the in-depth research among 1,000 international business leaders across 19 countries are captured in the report Opportunities and Challenges, the first in the 50 Degrees East series examining how Asia's rapid growth and development are expected to influence business decision making in the future.
When asked, nearly 10% of business leaders chose Singapore as one of the top three markets offering growth opportunities. China led the overall rankings with 44% of respondents identifying it as one of their three top growth markets, followed by India at 34%, the US at 23% and Brazil at 14%.
Market size and growing consumer prosperity are the main reasons cited for high expectations in these markets.
The survey also showed that Singaporean business leaders overwhelmingly view China as the most promising market for growth opportunities, with 65% of Singaporean respondents placing China in their top three growth markets -- 53% of respondents picked India, 21% picked Vietnam while 19% picked Indonesia.
Singapore business leaders highlighted Russia, China and the US as the hardest markets to enter.
The key barriers to market entry were monopoly/duopoly markets and intellectual property in China; regulatory environment and political and economic instability in Russia; and start-up costs in the US.
An analysis of Foreign Direct Investment (FDI) flows showed that inflows into Singapore have rebounded to above pre-financial crisis levels at US$38.3 billion in 2010, compared to US$35.8 billion in 2007, while FDI outflows of US$19.7 billion in 2010 are still below the peak of US$27.6 billion in 2007.
"Singapore has shown great resilience in attracting foreign investment despite the global downturn. We can expect global investors and corporates to increase their focus on South East Asia as household incomes rise and a consumer economy develops across the region. As a regional investment hub, Singapore will likely be a major beneficiary of this trend."
According to the survey, Singapore's performance complements the broader survey findings, showing Asia Pacific's advanced influence in comparison to other regions.
Among global business leaders, one-third see the eurozone debt crisis as the greatest threat to economic recovery over the next 12 months, compared to 19% who fear an Asian slowdown, 13% who cite political instability, and 12% worried about inflation.
Business leaders in Brazil, Russia, India and China (the BRIC countries) are optimistic about growth opportunities in Asia Pacific but also far more likely to look to Africa than their global counterparts.
Three-quarters of business leaders interviewed agree that Asia's economic influence is rising, easily surpassing all other major regions. Just 2% say its influence is declining. This contrasts sharply with Europe, which more than one in five business leaders believe is in decline.
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