Japan

Please see below selected pre-2016 intelligence about the Asia Pacific region. This is a synthesis of major recent developments at competitors, business schools, thinktanks, media, commentators, and other key influencers in our external environment.

Asia-Pacific is a region of huge diversity, not only culturally and geographically, but economically too. Japan is a member of the G7 and a world leader in automotive and technology. Singapore competes with London and New York as a global financial centre. Australia and New Zealand are sometimes treated as a region in their own right due to both geography and culture - it takes over 12 hours to fly from Delhi to Sydney and history ties them more to the UK and US - but they are increasingly connected to Asia through trade.

December 2015

• In The Future of Asia Pacific, Grant Thornton drew on interviews from our International Business Report and data from the IMF, UN and Economist Intelligence Unit to explore the opportunities and challenges for business growth in Asia-Pacific. The slowdown in China, regional tensions and ageing populations emerge as key threats to regional growth prospects, while businesses are excited by the Trans-Pacific Partnership and increased ASEAN cooperation.

• Australia’s GDP growth strengthened in the September quarter, to 0.9% in the quarter and 2.5% over the year, up from 0.3% in the quarter and 2.0% over the year to June. Australia’s long-run average annual GDP growth rate is around 3.1%.

• Official figures released just three weeks ago indicating that Japan had dipped into recession were revised to show that the economy had grown. An initial estimate recorded GDP contracting at an annualised rate of 0.8% in the third quarter, but updated numbers on business investment suggest that the economy instead grew by 1%.

Please see below selected recent intelligence about the Asia Pacific region. This is a synthesis of major recent developments at competitors, business schools, thinktanks, media, commentators, and other key influencers in our external environment.

Asia-Pacific is a region of huge diversity, not only culturally and geographically, but economically too. Japan is a member of the G7 and a world leader in automotive and technology. Singapore competes with London and New York as a global financial centre. Australia and New Zealand are sometimes treated as a region in their own right due to both geography and culture - it takes over 12 hours to fly from Delhi to Sydney and history ties them more to the UK and US - but they are increasingly connected to Asia through trade.

See also:

• ASEAN Connections: how mega-regional trade and investment initiatives in Asia will shape business strategy in ASEAN and beyond - The Economist
• Outlook for Key Emerging Asian Markets - Economist Intelligence Unit

• Please note that, due to the disproportionately high number of stories involving China, we cover these in a separate blog post - please see On China's economic uncertainty.

June 2016

• The Australian economy grew 1.1 per cent quarter-on-quarter in the first three months of the year, trumping expectations. That took the annual rate to 3.1 per cent, compared to expectations of 2.8 per cent.

• On the global economic radar, Bangladesh has long been overshadowed by its larger neighbour in the region, India. However, with a population exceeding 160 million, Bangladesh has been steadily building its economic strength and is now emerging as an attractive frontier growth market in South Asia. This presents a sizeable opportunity for organisations seeking to expand their global footprint and further establish a presence in the South Asia region. In this article, we explore some of the economic growth drivers for Bangladesh and potential opportunities for global companies to tap into. Read more about Bangladesh's recent economic growth and investment potential in PwC's Growth Markets Centre's latest blog.

• Japan has one of the highest levels of public debt to GDP of any country in the world. In 2015 the ratio stood at 229%, compared with 74% for the US and 19% for China. Since Japan has a shrinking population and almost no economic growth, one wonders how this can ever be paid off. On top of which, the Economist Intelligence Unit expects the ratio to keep rising, to 253% of GDP by the end of the decade.

• The Malaysian economy expanded by 4.2% year-on-year in the March quarter, moderating from a 4.5% growth in the previous period but slightly above market expectations of a 4.1% expansion. It is the weakest growth since the first quarter of 2013.

• South Korea’s economy grew in the first quarter by just a shade more than initially revealed. GDP grew by 0.5 per cent quarter-on-quarter in the first three months of this year, up from the initial estimate of 0.4 per cent. That was enough to bump up the yearly rate by 0.1 percentage points to 2.8 per cent. Economists, on average, expected no change.

Please see below selected recent intelligence about Asia Pacific. Please contact Dominic Kelleher with any questions.  

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June 2015

• The Financial Times published an FT Focus - Asia special edition.

• According to BankofAmericaMerrilLynch, for Asia Pacific’s most influential CFOs, 2015 will be a year of growth but will require a heightened level of courage, commitment and care to deliver on expectations. Change will be inevitable. Challenges will be multi-faceted. Risk and market volatility will remain a reality. But with an actively managed finance strategy and a clear understanding of the diverse headwinds, opportunities will materialise. These are some of the projections of Asia Pacific’s leading CFOs.

• integrAsian, a new Economist Intelligence Unit study, sponsored by ANZ Banking Group, looked at how trade and investment ties between Asian economies are evolving, and the opportunities as well as risks this process is creating for the private sector. This report is based on a survey of senior executives at 525 companies in Australia, China, Hong Kong, India, Indonesia, Singapore and Taiwan, as well as interviews with business leaders and experts. It also examines how growing integration affects the business strategies of firms in the region through profiles of companies in three industries: information technology, consumer electronics and energy.

• KPMG Australia announced a record 51 new partners and executive directors. The breakdown by line of service is as follows: Advisory 50% (dominated by management consulting and deal advisory); Private Enterprise 18%; Tax 18%; Audit 10% and Shared Services 4%.

• A stronger-than-expected jump in mining exports helped Australia’s economy to expand by 2.3% in the first quarter compared with the same three months last year. Joe Hockey, the Treasurer, said the figures reflected the “deep resilience” of the economy. But with consumer spending still weak, the Reserve Bank of Australia erred on the side of caution and kept interest rates on hold at a record low of 2%.

• China will increase support for cross-border e-commerce as the world's second-largest economy shifts from manufacturing to higher-value services, the government said. China's e-commerce industry has been booming in recent years, with companies like Alibaba Group Holding Ltd and JD.com Inc benefiting from a rising middle class with more disposable income. The government released policy guidelines that include tax policies aimed at boosting domestic consumption and pilot projects to ease overseas payments, according to a statement posted on the central government's website www.gov.cn.

• According to Eurasia Group, China’s leadership is undertaking an historic reform agenda, seeking to overhaul political and corporate governance in order to shift toward more sustainable growth. To facilitate this process, senior leaders will work to strengthen their internal standing within the government and to bolster popular legitimacy by demonstrating progress on issues such as the environment and income inequality.

• China aimed to pledge a multi-billion dollar investment in Europe’s new infrastructure fund at a summit in late June in Brussels, Reuters reported. The exact sum has yet to be decided. In return for the investment in Europe, China is expected to ask Europe to invest in its revival of the Silk Road. The “One Belt, One Road” initiative is expected to build energy and communications links such as railways, highways, oil and gas pipelines, power grids, Internet networks, maritime and other infrastructure links across Central, West and South Asia to as far as Greece.

• The Economist Intelligence Unit now expects the Chinese economy to grow by 6.8% in 2015, as rising incomes support household spending growth but as slowing growth in investment - especially in property- holds back the pace of expansion. falling global oil prices and excess local industrial capacity will cause average consumer price inflation to slow to 1.2% in 2015, from 2.1% in 2014. The renminbi is expected to weaken against the US dollar in 2015, depreciating on an annual average basis for the first time since 1994.

• Japan’s economy grew in the first quarter at a much faster rate than had been thought. A revised estimate found that GDP expanded by 3.9% at an annualised rate, up from the 2.4% that was first reported last month. Inventories remained very high, prompting more warnings about a possible oversupply of goods in the economy, but the upward revision also reflected a surge in business investment.

• Deloitte appointed its first Asia Pacific leader to come from Japan. Yoichiro Ogawa, who has a 30-year career with Deloitte Japan, will serve a four-year term. In his role, Ogawa will be responsible for driving market leadership and quality across the region, strengthening the firm's brand and client services and identifying further growth opportunities while working with member firm leaders to enhance bonds and collaboration. In addition to the Asia Pacific regional leadership role, Ogawa will also become the Deloitte global managing director of regions and will serve as a member of the network's executive and operating committees. Ogawa's appointment is part of the new leadership team set up by Punit Renjen, Deloitte's global chief executive as of 1 June 2015.