Date: Thu 16th September, 2010
Venue: Manchester Art Gallery, Mosley Street, Manchester, M2 3JL
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If Clive Drinkwater had £1 for every time a business came to his office at UK Trade and Investment North West to ask about getting into China, he’d be able to retire to a beach in Barbados. Less common, he says, are enquiries about Indonesia, Malaysia, Thailand and Singapore. And yet, these are places that not only welcome UK businesses with relatively open arms, they can also provide a decent "bridgehead" to China.
Drinkwater knows what he’s talking about, before heading up UKTI in the North West he was an executive with metals and chemicals business Johnson Matthey in Indonesia. Which is why he was a good choice as opening speaker at the Insider International Trade Breakfast event on Doing Business in South East Asia.
"The South East Asian economies are growing at an average of 6 per cent a year," he said. "They speak English widely, they have trade surpluses and healthy currency reserves, so they are stable economies."
The central premise is that the cluster of countries below China, east of India and north of Australia are hot spots because of that location, but also because they are growing economies in their own right. The gross domestic product for Indonesia, Malaysia, Singapore, Thailand and Vietnam alone exceeds $1.2tn and a host of growing sectors including: information and communications technology; education; the creative industries and infrastructure are attracting interest from overseas firms.
They are all good enough reasons to do business in the region, but Drinkwater says there are still issues to bear in mind. "People think there are difficulties with corruption, but Indonesia, for example, is tackling corruption and there are people now on trial who were once considered untouchable," he said. "Security is a concern and news about riots in Bangkok come to mind, but I’d feel safer walking the street of Kuala Lumpur after dark than I would in Manchester."
What also makes South East Asia a region with great promise for UK businesses is the perception there of the UK. Mark Leaver, who heads a Knowledge Transfer Partnership for the creative industries, said: "There is a perception there that the UK is a creative leader. The Singapore government is trying to create a soft landing for creative media companies that can provide them with a soft landing which can help them to make sales quickly."
For Peter Thompson, international division manager, Evans Vanodine, who was also on the panel at the event, many of the barriers to doing business there are actually self-imposed. "Regulation in Europe is a nightmare, unnecessarily so, that’s not the case in South East Asia, it’s a very welcoming region, if it’s got Made in Britain on the label you have a market, there is a natural acceptance of our products as they sit at the top end of the quality chain.
Taking the argument the other way, the perception of the North West in Asia is generally positive. Leaver said in Singapore there’s a desire to teach creativity. "There’s a great admiration for the radical, edgy, leftfield creative thinking that Manchester is particularly known for," he said.
More generally British people have to up their game in South East Asia though, warned Drinkwater. "Yes, the UK is seen as having great products and a favourable currency. But we also have a reputation for being cautious, for not always following things up. They think we don’t adapt and embrace change. It’s important to take that on board, because competitors from France, Italy and Germany are doing well out there."
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