Feature of the Month: ASEAN Outlook
Countries in the ASEAN bloc are projected to grow annually at an average 4.6% and is projected to rise to 5.2% over the next few years. Despite the projected growth rates, many economic risks persist, such as the potential lower demands from China. Malaysia, Singapore, and Thailand can be negatively affected by the decrease in exports to China, the decrease in financial investments, and a drop in tourism. A few other risks regarding economic growth for ASEAN countries are the interest rates in the United States and the decrease in productivity growth in ASEAN countries.
The ASEAN Economic Community (AEC) was formed to help integrate economies in the ASEAN bloc and Southeast Asia to increase their presence in the global economy. The goal would be to increase regional integration in the areas of trade in goods and services and the liberalization in investment and capital markets. It is projected that the region’s $2.6 trillion combined economy will almost double by 2030.
The AEC doesn’t plan to have a common currency like the European Union and will continue to limit cross- border travel, unlike the EU’s Schengen Area. Although import tariffs have decreased in the ASEAN bloc, other barriers such as quotas on imports, language requirements for foreign workers, and worries of a potential brain drain to wealthier countries exist
Featured Resources
The ASEAN Economic Community (AEC)
The ASEAN Economic Community (AEC) insights page provided by Deloitte offers a thorough description of the AEC and how it impacts businesses around the world. A brochure is available for download that provides key statistics, important milestones, and a look at what is to come for the AEC.
Categories: ASEAN , Trade Bloc
ASEAN UP
ASEAN UP is a website designed to empower business in Southeast Asia by compiling a wide variety of resources pertaining to the ASEAN trade bloc. This site includes an ASEAN business directory, business resources for each country in ASEAN, and a blog covering opportunities in ASEAN. Latest news and data regarding ASEAN are also available on the site.
Categories: ASEAN, Trade Bloc
Featured Academy
Doing Business in Southeast Asia
The Southeast Asia module provides one with insight into: the benefits of doing business here and the region’s hot industries; the functions of the Association of Southeast Asian Nations (ASEAN) and its impact on international business; the diversity of Southeast Asian cultures and the impact of foreign civilizations on their development; common business practices; the basic logistics environment, including the characteristics of local distribution; and the obstacles for these countries to achieve economic integration and grow their economies. A case study on the economic integration challenges ASEAN has faced is also incorporated into this module.
Regionalization and Trading Blocs
The Regionalization and Trading Blocs module provides one with information on: what globalization means, its impact on business, and the forces that are driving it; the advantages and disadvantages of globalization, as well as who is in favor of globalization and who opposes the movement; what the World Trade Organization (WTO) and the General Agreement on Tariffs and Trade (GATT) are, how they work, and what their history is; the history and purpose of some of the world's largest and most influential Regional Agreements: NAFTA, MERCOSUR, ASEAN, and the EU; and the basic premises of the Free Trade Area of the Americas (FTAA) that is currently under negotiation in North, South, and Latin America. A case study on Quebec’s language laws is also provided.
globalEDGE Business Beat
Tomas Hult
Here you will find a commentary in Fortune, by Tomas Hult, professor of international business at Michigan State University.
The Reserve Bank of India, European Central Bank and People’s Bank of China — which boasts the world’s largest stash of foreign currency — are all growing more influential.
Tomas Hult
Tomas Hult, Byington Endowed Chair and Professor of International Business at Michigan State University, is the author of the attached article, which was originally published in The Conversation.
News that the People’s Bank of China, the country’s central bank, changed its formula for calculating the reference rate of the yuan (RMB) prompted the currency to fall to a four-year low.
Essentially, the People’s Bank of China is now calculating the reference rate on a daily basis and incorporating market forces. Some financial experts argue that allowing market forces to help determine the value of the yuan is logical, while others assert that China is merely trying to boost its own exporters – at the expense of foreign companies – by making their products relatively cheaper in the global marketplace. Many in the U.S. are concerned that our businesses will be hurt, with some accusing China of currency manipulation.
