OPINION: Asia is changing constantly. That’s a given.
I firmly believe that the pace of change is one of the reasons behind many people’s limited understanding of Asian markets and how they behave.
Yet, change can be bilateral—moving towards us (Western society) or away from us.
While it is easier to assess the former—by measuring Asian markets against certain Western standards, the latter is harder to pinpoint.
A 2017 Economist Group study shows that businesses continue to remain confident in Asian markets.
Over half of the businesses that participated in the survey indicated that they would continue to invest further in markets like China, India, Indonesia, Vietnam, Philippines and Thailand.
Not surprisingly, the survey also suggested that Asian markets, in particular China, India and some ASEAN nations, are expected to pick up a considerable share of global economic growth in the next few decades.
This shows that foreign companies are learning how Asian markets operate.
Nevertheless, in order to encourage engagement, our knowledge and understanding of Asian markets needs to extend much further.
Asian markets are striving to improve their rankings in indices such as the World Bank’s Ease of Doing Business, for example by reducing the number of processes required to set up a new company. In many cases, however, the reality of practices in these markets do not necessarily align with government plans.
The 2016 Corruption Perceptions Index, saw an overall drop in the ranking of Asian markets. China, Hong Kong, Singapore, Laos and Myanmar formed the exception and managed to improve their rankings.
Despite improving, Laos and Myanmar still rank poorly. China moved up 4 ranks to 79th, suggesting its anti-corruption campaigns are beginning to show some results.
If indices such as this one are taken into consideration by foreign companies seeking to engage in Asia, it can only mean that foreign companies from more developed countries will struggle to cling to their ways of operating at home.
Just a couple of weeks ago, we had a good debate in my MBA class about what is considered corruption in some countries and what are the boundaries for getting deals done. We did not arrive at a consensus in that discussion.
The Corruption Index is just one example. Ultimately, we need to ask ourselves whether the pace of change in Asia is a legitimate excuse for not engaging with and in Asian markets?
Developing our understanding about these markets seems like a daunting task and calls for baby steps.
As individuals, we can pick up small pockets of knowledge about Asia. However, if they aren’t strung together to form a larger picture, we’re left with fragmented knowledge that can be confusing or biased.
Organisations, on the other hand, can pick up pockets of individual knowledge and connect them to provide a fuller picture of what is happening in Asia.
New information adds value to existing collective wisdom. It allows us to adapt to the changes that Asia presents.
Another thing is for sure—there’s no guarantee that Asia is converging with the Western world.
Siah Hwee Ang is the BNZ chair in Business in Asia at Victoria University of Wellington.