Illustrative image (Source: Reuters)
A growing consumer market has been identified as one of the attractions of ASEAN in driving Australian investors into the region, according to local media.
The Australian Business in ASEAN Survey 2017, conducted among Australian businessmen by the Australian chambers and business councils from ASEAN member countries, showed that 61 percent of Australian firms have identified the growing consumption among ASEAN people as the main reason for doing business in the region.
The second reason identified was improvement in infrastructure at 35 percent, a 5-percent increase from 30 percent in the previous survey.
Regional integration ranked only third among the top three factors for business expansion in the region with only 36 percent of Australian businessmen putting importance on the ASEAN Economic Community (AEC) as a major come on for them.
In the previous survey, 53 percent of Australian businessmen ranked economic integration as the second most important reason for investing in ASEAN. However, only 19 percent of Australian businesses believe that ASEAN integration does not matter to their business, although it has also increased from 16 percent in 2016.
According to the survey, a lesser attraction in the region’s economic integration was attributed to insufficient provision of information on the ASEAN integration for Australian firms, while ASEAN is a priority region for many Australian companies. The survey said that 17 percent of firms did not consider that their head office had a strong understanding of the region.
President of the Australia-ASEAN Chamber of Commerce Fraser Thomson said in their 2016 survey that the AEC and regional integration was the second important motivation for Australian firms wanting to invest and operate in the region.
According to Thomson, Australian firms wanted more information to properly understand what ASEAN regional integration could mean for their business.
Despite these challenges, the survey showed that Australian businessmen still continue to transact business with the world’s fastest growing region.
The survey showed that 62 percent of respondents had expanded their trade and investment in the region over the past two years, with only 6 percent of firms reducing their presence in the region over that time.
In the last year’s survey, 60 percent of firms said they had expanded their trade and investment and 7 percent contracted.
Among the ASEAN countries, Singapore has been the favourite destination with more than 50 percent of Australian firms operating their regional hubs in the country, followed by Malaysia and Thailand with 40 percent.
In addition, the survey said 86 percent of firms plan to increase their investment in the ASEAN region over the next five years, with less than 2 percent of businesses planning to reduce their presence in the region. Vietnam has overtaken Myanmar as the most popular market for expansion.
ASEAN accounted for 14 percent, or 93 billion AUD, of Australia’s total trade in 2015-2016. Two-way investment was valued at 224 billion AUD at the end of 2016./.