James Cheo, Chief Investment Officer, Southeast Asia, Global Private Banking and Wealth, HSBC
“I think South East Asia is something everyone should watch out for. Clearly the economic gravity is shifting to South East Asia, but if you look at general investors, global investors are still very much underinvested in South East Asia. For people who look at South East Asia over a long time, it’s almost like watching a movie, but slow motion. It’s always moving in the right direction, but of course, the prospect is bright if you look at historical data. I’ll give you some statistics. Back in 2000, South East Asia trade with Mainland China is only about 40 billion. Today it’s 850 billion, so it’s increased 20 times and the size of South East Asia’s economy compared to back in 2000, compared to Japan, for example, Japan was eight to nine times larger than South East Asia. Right now Japan’s only 1.5 times larger and clearly in the years ahead, South East Asia is going to catch up. What’s also very important is that South East Asia has very different complimentary strengths, of course, Singapore financial center, strong manufacturing base, industrial powerhouse and you have, of course, in Thailand, for example, it has a very strong automotive industry, Malaysia electronics production and Indonesia for its natural resource. This year with the implementation of the regional comprehensive economic partnership, the world’s largest free trade agreement, it’s going tie the region together and would spur investment and trade in the years ahead. I think that’s going to be a very interesting proposition that investors have to consider South East Asia. It’s a 3 trillion economy, sits at a crossroad of 3.4 trillion of global trade every single year. That’s something that I think investors have to think seriously about in the years ahead.
