Asia Pacific: Becoming the world’s centre of gravity?

Josep Borrell, High Representative of the European Union for Foreign Affairs and Security Policy and Vice-President of the European Commission, recently stated that, “the Asia-Pacific region is with no doubt becoming the centre of gravity of the world.”[1]

His statement was underpinned by key statistics, including the fact that the Asia-Pacific (APAC) region creates 60% of global GDP and two-thirds of global growth. It is also the second largest destination for EU exports. Further, the APAC is home to 60% of the world’s population[2] and includes the ASEAN region, described as one the fastest growing regions in the world.

Even with its growth forecast dropping from 5.5% to 4.7% in 2023, ASEAN remains above the global average International Monetary Fund growth forecast[3]. Additionally, supported by free trade agreements that facilitate the smooth movement of goods and services, the region is continuing to attract international investment and is poised for further growth.

Optimism in the Asia Pacific

With so much promise, it’s no wonder that at a recent meeting, MSI member firms expressed cautious optimism for the year ahead – even with a possible recession looming. Echoing MSI member sentiments, the JP Morgan 2023 Business Leaders Outlook[4] also reported leaders in India and Australia having a positive outlook on the global and national economies.

Despite inflationary pressures, business leaders expect their revenues to increase or remain the same in 2023. Their leading growth strategies include expanding into new domestic and international markets, as well as new distribution channels. These strategies reflect the potential for MSI member firms to capitalise and collaborate as clients look to grow both domestically and internationally.

The positive outlook is further boosted by China’s reopening of its borders, sparking hope that the move will reinvigorate a $17-trillion economy[5] that has been a significant contributor to growth in the region, especially where Chinese tourists fuel the Asia Pacific’s tourism economies.

As China reopens and the world recalibrates, governments have also increased their commitments to sustainable development. While falling behind on its efforts to achieve a net-zero future, the APAC is pacing ahead of both Europe and North America in its renewables investment, thanks largely to major pushes from China, India and Australia.[6] From a renewable and green energy front, Australia is well-placed with its extraordinary locations for solar and wind power and hydrogen[7] while Singapore has laid down plans to be a leading centre for Green and Sustainable Finance in Asia and globally[8].

As countries in the region adjust to the post-pandemic environment, bright spots on the horizon include developments in health-technology, e-commerce, fintech and renewable energy.

MSI Global Alliance in the Asia Pacific

With 50 robust accounting and legal member firms spread across Asia, Australia & New Zealand and Sub-Continent India, member firms can work together to leverage expertise and the wide MSI network of contacts to win, retain and serve clients with pan-national, international, and multinational needs.

A recent success story includes a group audit being led by MSI member Heng Lee Seng LLP (Singapore) in the Asia region. Initiated by MSI member firm, haysmacintyre (UK), the project is an excellent example of how opportunity and savvy entrepreneurship led to the engagement of six MSI member firms in a project that has the potential to keep on growing.

In Australia, and in particular Western Australia, which is looking to become a world leader in hydrogen power, MSI member Taylor Smart (Perth) is leveraging national programmes and expanding to new frontiers advising international clients who are investing in this growing industry.

MSI member Thomas Davis & Co Chartered Accountants (Sydney) assisted data technology company Supermetrics with the expansion of their business to Australia, which is another great example of leveraging the skills and local expertise of MSI member firms.

In India, MSI member Enablizer (New Delhi) is working with industry giants like Bharti Airtel to support their international expansion and working with four other MSI firms to support their global operations.

Collaborating for Growth

These examples are only the tip of the iceberg when it comes to innovations in business and fruitful collaborations across a region that is one of the most diverse and connected in the world.

The region is not without its challenges, but as it continues to grow and develop in areas like renewable energy, fintech, healthtech, e-commerce and green finance, the opportunities for our members will expand in tandem as clients seek out professional services firms to gain expert advice.

At the next Asia Pacific Regional Conference to be held in Kuala Lumpur, Malaysia on 9 – 11 March 2023, the first physical conference in the region in four years, members will be gathering to discuss new opportunities for development and “Collaborations for Growth” while exploring issues related to People, Technology and Sustainability.

If you have clients interested in exploring the region and would like more detailed conversations, reach out to a member firm in the Asia Pacific.