Huge opportunity in ASEAN as regional initiatives kick in, says new report

HONG KONG - Companies see huge opportunity in the ASEAN bloc and believe this will be accelerated by mega-regional trade initiatives - such as the proposed Trans-Pacific Partnership (TPP), China's One Belt One Road (OBOR) initiative and the Regional Comprehensive Economic Partnership (RCEP) that will work in tandem with the ASEAN Economic Community (AEC) to strengthen connectivity and the overall business environment.

A new report prepared by lawyers Baker & McKenzie and The Economist Intelligence Unit, examines what business leaders are doing to prepare for this rapidly evolving business environment over the next three to five years.

Insights include strategies and plans for further investments, human capital, protecting intellectual property and trade and logistics.

Researchers surveyed 144 business leaders in ASEAN and around the world. The highlights:
1. 85% of surveyed companies expect TPP and RCEP to boost economic integration in the region, predicting growth  with similar proportions in both intra-regional trade (85%) and investment (84%);
2. Growth rates expected from OBOR are 63% for intra-regional trade and investments;
3. Membership of TPP can also afford member countries in ASEAN a competitive advantage over non-signatories in terms of attracting inward investment, according to 69% of the respondents;
4. 62% of the companies surveyed predict that TPP will be ratified within the next three years, and close to 95% see the Partnership ratified within five. Almost 44% believe RCEP will become operational within three years, and around 97% within five;
5. OBOR is expected to help draw the region together by creating infrastructure-related investment opportunities that can then facilitate cross-border investments in the manufacturing and service sectors. 59% of the surveyed companies expect OBOR to lead to partnerships with Chinese companies, while 50% believe OBOR will increase M&A activities and investments in the ASEAN region.
http://www.bakermckenzie.com/en/insight/publications/2016/04/asean-connections?src=ClientAlert1  (ATI).