Doing business in Asia Pacific 2017-2018: A world in transition

27 November 2017

The results of our annual APEC CEO Survey - conducted each year by PwC Research - have been released by Bob Moritz, PwC Network Chairman, at the APEC CEO Summit in Vietnam.

Over the next three years, Asia Pacific CEOs expect their businesses will become more global, more automated and more closely linked to a region that they believe is slowly and steadily becoming more economically cohesive.

Following electoral success by nationalist parties and rhetoric against free trade, we looked for evidence of a pullback from the global economy but found little. APEC CEOs are more optimistic today than during the previous two years — 37% say they are “very confident” of their prospects for revenue growth during the next 12 months. Stronger prospects for GDP growth in some APEC economies and export markets in Europe are bolstering that sentiment.  International trade flows are picking up and - according to the World Trade Organisation - are projected to outpace global economic growth in 2017 for the first time in five years.

In fact, 63% of regional business leaders surveyed by PwC expect their global footprint to expand over the next three years. A net 50% plan to increase investments globally, up from 43% at the same time last year. Executives are forging ahead despite tremendous uncertainty over trade policy directions.

Yet these business leaders are also preparing to make adjustments in how they operate internationally, adapting to changing views on trade openness. They expect to make greater use of strategic alliances (71%) to secure footholds in foreign markets and,  amongst other adaptations, some will move to a ‘build where they sell’ (51%) model.

They will also balance an array of incentives -both economic and market-driven -to do more internationally against threats of increased barriers to foreign trade and investment. With governments seeking to protect jobs and attract or retain a greater share of business activity, especially R&D, trade relations and tax policies are in flux. Amongst the APEC economies, perceptions are that the conditions for paying business taxes have improved since 2010, although they  remain volatile for cross-border trade, according to the World Bank’s annual Ease of Doing Business, which  ranks economies against the highest-scoring global economy.

Upcoming global strategies will be driven by wider adoptions of technologies - like robotics and 3D printing in manufacturing - as much as any sharp reversal in trade openness. Automation in the workplace is moving at a pace few CEOs could have imagined. With over half of business leaders (58%) currently automating certain functions in their organisations, APEC businesses are laying the groundwork for a future workforce that is more analytical, more intelligence-consuming, and less focused on commoditised tasks.

For the last seven years, in its role as Knowledge Partner to the APEC CEO Summit, PwC has delivered the business perspective on doing business in in the region through its annual APEC CEO Survey. This year’s survey shows how business leaders are taking stock of a more fluid trade policy and technology environment. PwC Research surveyed 1,412 APEC business leaders from May-July 2017. Responses are scored from each of the 21 APEC economies. Over half of respondents are in organisations with over US$1 billion in annual revenue.

Click here to find out more about APEC 2017.

For more information on the research, contact:

Cliona O'Beirne | Manager, PwC Research
Profile | Email | +44(0)28 9041 5229

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