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Jeremy Cook
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Jeremy is one of the UK’s leading voices on foreign exchange, and you’ll regularly find him on television and across the national media giving his unique, thoughtful insight. He has made regular appearances on BBC News, BBC Radio 5 Live and Newsnight, as well as in leading blogs and newspapers. Having started out at HSBC in the City of London, Jeremy decided on a move into currency after a brief stint in private equity advice. He joined World First in 2007 as a Corporate Dealer when the Corporate Desk at World First consisted of only five people. He took on the role as World First's Chief Economist in 2010.

World First

September 13, 2017

What's Growing in Asia?

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Companies in Asia, be they large or small, are coming to a fork in the road. Years and years of double digit growth has slowed as everything from a darkening trade outlook, tougher regulatory atmosphere, political swings and an uncertain investment environment have come to represent growing risks to doing business in the world’s most populous region.

Writing this from London it is interesting to see that while Europe and the US become less integrated, Asia seems to be heading in the other direction. According to the latest trade figures, the majority (52%) of the continent’s trade is within the region. That figure has doubled since the early 1990s and should remain strong as newer players join the fold.

Supply chains are nowhere as dense as those that link multinational firms with factories in South Korea, Malaysia, Vietnam, Thailand and China. Sooner or later, India and Indonesia are going to be joining in. From a currency point of view, while the US dollar remains the preeminent currency in the area the growing rise of the renminbi as a world currency will also help integrate the continent although the People’s Bank of China could help this by lifting some of its capital controls.

The question that must be asked now is what’s next? Japan had its cultures of excellence instilled in the corporate atmospheres of the 1960s, 70s and 80s while South Korea’s chaebol have profited from the smallest electronics to the grandest of shipping vessels. We must wait to see what the rest of Asia builds the next leg of its growth picture onwards.

For now the concerns are about who represents ‘the new’? The tech sector has found a manufacturing base in Asia but 95% of the value of any iPhone is banked outside of the region. Similarly advances in telecoms, healthcare, green energy and transportation are more likely to be made elsewhere. More patents are filed in Asia than anywhere else but is that the triumph of incrementalism as opposed to dynamism.

Some of these could be a 'middle-income trap'; an economic phenomenon that is found when a country's residents reach a certain level of income and innovation and drive tapers off. These countries then find it difficult to transition to a higher income, fully developed economy. Developments in the corporate sector will see that transition faster more than anything that local governments are able to do.

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Disclaimer:

This editorial is strictly based on publicly available economic data and is not intended to express the political views of World First Pte. Ltd. 

These comments are the views and opinions of the author and should not be construed as advice. You should act using your own information and judgement.

Whilst information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed.

All opinions and estimates constitute the author’s own judgement as of the date of the briefing and are subject to change without notice.

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ABOUT THE AUTHOR

Jeremy is one of the UK’s leading voices on foreign exchange, and you’ll regularly find him on television and across the national media giving his unique, thoughtful insight. He has made regular appearances on BBC News, BBC Radio 5 Live and Newsnight, as well as in leading blogs and newspapers. 

Visit his author bio page to find out more about Jeremy and connect with his social profiles.

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