Are these the greatest opportunities in Asia right now?

As a privileged part of the Australian delegation to the Asian Financial Forum in Hong Kong last month, Luke Malone, the head of our Asian Business Desk, has his eye on Asia. 

The Asian Financial Forum last month brought together 1200 business leaders from throughout the Asia Pacific region and addressed many of the economic opportunities and issues that matter. 

Over coming months I plan to provide you with articles that give you an insight to these, so you can take advantage of our learnings as we navigate the Asian Century.

This week I want to talk about the three biggest areas of focus at the conference, and highlight what could be the most exciting opportunities for Australia in coming years:

1.  Food security and production for a growing Asian population

Food security in Asia is a large opportunity for Australian food businesses looking to produce and export into the region.  Recent data shows that we have the capacity and ability to produce food for over 500 million people here in Australia.  With growing population density throughout Asia and land shortage in many countries, the ability to produce the quantities of food for the emerging middle class in these countries seeks is becoming more and more difficult.  The changing socio-economic position of many has increased their desire to eat well, and their ability to afford high quality produce for which Australia is most renowned.  This is a trend that may change the allure of farming and food production investment in Australia in coming years.

2.  China and the ASEAN+6 Relationship will lower tariffs and build trust

This year, the 10 ASEAN Countries plus China, Japan, South Korea, India and Australia and New Zealand will start negotiating a Regional Comprehensive Economic Partnership.  The plan is to have a deal in place by 2015 creating a free trade zone that will encompass almost two thirds of the world’s population.  Lower trade barriers and greater trade integration should lower the tariff costs for businesses working across borders in these 16 countries.

3.  Chinese capital is freely flowing out of China seeking a return  

Recent figures on China’s foreign direct investment (FDI) shows two very interesting trends.  Outgoing FDI rose almost twelvefold from $5.5 billion a year to more than $65 billion per year from 2004 to 2011 and is expected to reach approximately $150 billion per year by 2015. In contrast, inward FDI fell 0.2 percent in October 2012 from a year earlier to $8.3 billion, the 11th fall in 12 months.  (Source: China Daily Jan 18-24 2013).  The sentiment of Chinese investors and businesses is strong despite some of the portrayed ‘slow down’ of the Chinese economy portrayed by the Western media.  My discussions with many prominent investors and high net wealth family groups during the Asian Financial Forum indicated that the desire for investments in Australian agricultural assets, resources, real estate and education remains strong.

Each of these issues presents terrific opportunities for Australia in an Asian context.  We are watching the trends closely with many of our Asian Business Desk clients, looking for ways that business and investment can benefit from the changes.

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About our Asian Business Desk

At Prosperity Advisers we have a dedicated Asian and Chinese business desk that understands the culture of doing business in China.

Our team includes Tax, Accounting, Corporate Advisory, Audit, Wealth Management and Mergers & Acquisitions Specialists who speak the language and have extensive Chinese and Asian business experience.  We currently act for a number of high net wealth Chinese investors and we help guide them on the transaction and regulatory path to both source investment opportunities in Australia by connecting them with the right people, while at the same time managing tax and other compliance objections.

For outbound investment into China, Luke and his team spend significant time in China and the Asian region and our connections in the region allow us to advise outbound Australian investors on the complex path of investing in China and Asia.  We are also a member of the Leading Edge Alliance, an accounting firm affiliation of some 4,000 members throughout the world and a strong presence in China and Asia.