China remains the top destination for business expansion by Asian enterprises. Malaysia took second spot while Singapore and Vietnam are in joint third position as destinations for regional companies to expand. These are findings from the UOB Asian Enterprise Survey 2014 released on Monday (Sep 15).
The survey was conducted among 1,024 business leaders across six markets in Asia. It was to find out what Asian enterprises are doing to fuel their next stage of growth, what their business expansion strategies are, and which markets within Asia are most favoured.
The results show that when it comes to expansion in Asia, companies prefer markets that are home to a large middle-class consumer base or those that offer lower cost manufacturing.
Among the factors driving Asian enterprises to expand abroad is rising labour costs – which is forcing some companies to expand into countries with lower costs to sustain profitability.
Other factors that may influence Asian enterprises to expand regionally include acting on advice of personal and business contacts. These contacts could be those with a similar language or culture, or trade associations and financial advisers.
Meanwhile for Chinese enterprises, many prefer to expand in their domestic market as they are fully aware of the growth potential. The survey showed that more than 40 per cent of Chinese enterprises are looking to invest and expand in Southwestern and Central China.
Source : Channel News Asia | September 15, 2014