The new Standard Chartered survey “Borderless Business: US-ASEAN Corridor” assesses the growth potential for U.S. companies in the region.
Singapore has emerged as the most attractive destination for U.S. companies in the ASEAN region. The Standard Chartered commissioned survey intends to explore potential opportunities for cross-border growth in this trade corridor.
U.S. companies are optimistic about the region in general, and 93 per cent of respondents expect an increase in revenue and 86 per cent anticipate an expansion in production.
The survey showed that U.S. executives are especially focusing on growth in Singapore (58 per cent) followed by Indonesia (45 per cent) and Thailand (43 per cent). Among those U.S. firms that are honing in on Singapore, 57 per cent consider it the ideal place to set up their headquarters in the region for sales, marketing and corporate functions. 43 per cent plan to use Singapore as their hub for R&D and innovation.
The ASEAN region’s population is estimated to rise to 723 million by 2030, with 67 per cent of it expected to be middle class. The region’s talent pools and proficiency in English can make it an attractive proposal for U.S. companies.
When senior executives were polled, they said access to the market (70 per cent), availability of human capital (53 per cent) and diversification of its production footprint (40 per cent) were the key drivers for expanding into the region. 43 per cent of respondents plan to expand into the region once the Regional Comprehensive Economic Partnership (RCEP) agreement is ratified.
There are concerns in the region too, and executives state geopolitical uncertainty (73 per cent), slow economic revival and slow consumer spending (65 per cent) and the COVID-19 pandemic and other health crises (63 per cent) as the biggest risks that require tackling. U.S. companies also understand the need to adapt their business to local conditions (68 per cent), learn local regulations (60 per cent) and build relationships with local suppliers (55 per cent).
In order to mitigate those risks, executives plan to enter partnerships and joint ventures (68 per cent), invest in talent (53 per cent) and execute digital transformation programs (48 per cent). Companies seek banking partners in the region and will focus on those with one-stop corporate financing and capital raising services (50 per cent), FOREX hedging and multicurrency settlement services (48 per cent) and a comprehensive cross-border network (48 per cent).
“ASEAN is core to Standard Chartered’s business strategy. An attractive growing market for consumer goods, medical devices and pharmaceuticals, the region offers US companies significant opportunities to expand their production and supply networks,” said Heidi Toribio, regional co-head, client coverage, Asia, corporate, commercial and institutional banking, Standard Chartered.
“As the only international bank with full presence in all 10 markets in ASEAN, we play a critical role in supporting our clients’ growth ambitions in the region.
“Our network and capabilities facilitate our clients’ market penetration and expansion and enable seamless cross-border trade and investments, while our digital co-creations allow them to streamline operations and enhance their customers’ experience.”
“Thanks to a sizeable market, increased adoption of new technology and a rapidly expanding middle class, ASEAN continues to be full of exciting business opportunities for US companies across various sectors,” said Steven Cranwell, CEO, Americas, Standard Chartered.
“As US companies push ahead with their growth ambitions, their ability to diversify their production presence to increase supply chain resilience, align with consumer expectations and government priorities—such as Environmental, Social and Governance practices—and partner with local industry players, financial institutions and government agencies will influence their growth in this dynamic region.”