Optimism in the Year of the Ox – From our Beijing Director

By Alfred Montufar-Helu, Beijing Director

The 2021 edition of our yearly ‘Asian Business Outlook Survey’ (ABOS) delivered a series of interesting results pointing towards the continued importance of the region to drive global growth. Despite ongoing risks, the great majority of respondents told us that they are confident about the business outlook in Asia over the next five years, with the level of optimism higher among business leaders from MLC-based companies 

I believe this optimism is likely related to how resilient Asia has proven to be to the disruption caused by Covid-19 when compared to other regions. In fact, 44% of MLC-based companies told us that they grew or maintained their revenue levels in 2020! And 31% told us that they expect to recover to pre-Covid levels this year. This compares, respectively, to 48% and 14% of their Asian peers. 

Similarly to last year, Mainland China emerged as the top investment destination for both MLC-based companies and their Asian peers, and far ahead the second top choice. Yet, it is also where business leaders told us they face the greater risks. How to explain this seeming contradiction?

To be sure, the quality of Mainland China’s business environment does not seem a reason for pessimism, with 58% of respondents rating it as favourable, and only 13% as unfavourable – which is much better than other geographies. But most expect that, along Hong Kong SAR, Mainland China will to be the most affected by the ongoing tensions with the US. So this might be part of the reason why Mainland China is seen as riskier than other countries.