Be Careful Out There
The survey finds cutbacks and caution are on everyone's mind
By JASON BOOTH
Staff Reporter of THE WALL STREET JOURNAL
For executives doing business in Asia, 2001 looks to be a year of caution and retrenchment. A survey of The Asian Wall Street Journal readers in January highlights to what extent an economic slowdown in the U.S. and heavy losses in regional stock markets have cast a pall across the region's business community.
A total of 458 telephone interviews were conducted by the international call center of Taylor Nelson Sofres Hong Kong.
Those interviews found that "developing new markets" remains the top priority for executives. But whereas a year ago "focusing on e-commerce" and "investing in new technology" were near the top of the priority list, this year companies are focusing on reorganizing business lines and cutting costs.
Caution is evident throughout the survey. The percentage of executives who see direct investment opportunities increasing in Asia fell to 45% this year, compared with 55% a year before. And 47% of those recipients say they will keep their foreign-direct-investment levels unchanged.
It's a similar story for portfolio investment, where two-thirds say they will keep investment levels steady -- up from just one third the year before.
The caution is not surprising given the economic challenges confronting Asia. Goldman Sachs forecasts that Asia ex-Japan will post 5.2% real GDP growth this year, down from 7.1% in 2000. And most of that growth will be generated by the Chinese economy, while most smaller nations will see growth rates fall by half or more.
Not that tougher times have changed all investment patterns. Telecommunications and technology" remains the sector that offers the best investment opportunities, according to the survey.
And despite calls by foreign investors for greater corporate governance on the part of Asian management, "transparency" remains near the bottom of the list of priorities for Asia-based companies.
It's a similar story for portfolio investment, where two-thirds say they will keep investment levels steady -- up from just one third the year before.
The caution is not surprising given the economic challenges confronting Asia. Goldman Sachs forecasts that Asia ex-Japan will post 5.2% real GDP growth this year, down from 7.1% in 2000. And most of that growth will be generated by the Chinese economy, while most smaller nations will see growth rates fall by half or more.
Not that tougher times have changed all investment patterns. Telecommunications and technology" remains the sector that offers the best investment opportunities, according to the survey.
And despite calls by foreign investors for greater corporate governance on the part of Asian management, "transparency" remains near the bottom of the list of priorities for Asia-based companies.
Write to Jason Booth at jason.booth@awsj.com2
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