Conference Presentation, Panel, Fireside Chat
Forces Shaping Asia
Milken InstituteTimothy Dattels, Ronnie C. Chan, Tony Fernandes, Dilhan Pillay, Tokihiko Shimizu, Tony Tan Caktiong, Lev Mass, Ying Hosler
- U.S. foreign policy is expected to shift toward disengagement and retreat from international orthodoxy, though business leaders anticipate continued global market participation and a potential resurgence of Pacific trade; conversely, the trade deficit with China is projected to persist at levels of 200, 300, and 400 billion dollars without reversal in the near term.
- Asia is identified as the primary engine for global GDP growth, driven by China and India contributing two-thirds of global expansion, with China predicted to transition from a copycat model to an innovator of unique business models within five to ten years, supported by R&D spending rising to 2.5% of GDP.
- The ASEAN region is forecast to grow collectively with a GDP of 2.5 to 2.6 trillion U.S. dollars, outpacing India's 2.2 trillion dollars, and is expected to become a self-sufficient trade bloc capable of withstanding trade wars, driven by infrastructure harmonization and a unified payment system.
- E-commerce and digital consumption in ASEAN are projected to reach 200 billion U.S. dollars by 2025, with B2C specifically growing to 88 billion U.S. dollars at a 32% CAGR, fueled by internet penetration rising from 260 million to 480 million users and mobile adoption increasing at a 14% CAGR.
- Significant disparities in capital allocation exist between China and India, where China deployed 31 billion U.S. dollars in venture capital in 2016 compared to India's 3.3 billion, creating a roughly 10-to-1 gap despite India's higher GDP growth rate of 7.1%.
- Infrastructure and capacity constraints are critical bottlenecks in the Philippines, Malaysia, Thailand, and China, with Changi Airport handling 60 million of 66 million passengers, while Singapore plans to address sea-level rise through a marina barrage project over a 50 to 70-year horizon.
- Demographic shifts will drastically alter economic structures by 2050, with most Southeast Asian nations facing aging populations and dependency ratio changes, whereas the Philippines is highlighted for its young demographic outlook expected to sustain growth for the next 50 years.
- Risks to stability include potential social unrest in China due to structural issues, geopolitical tensions, and the removal of the TPP, while environmental degradation and pollution in cities like Beijing pose meaningful threats to social cohesion.
- Private capital is increasingly shifting from buyout to growth equity models, particularly in Southeast Asian ride-sharing and internet sectors, with funding rounds reaching one to one-and-a-half billion dollars, driven by the "unbanked" sector's potential served through mobile technology and data-driven credit.
- Specific corporate growth targets include AirAsia aiming for 63 million passengers with 60% of revenue from previously unconnected routes, and Jollibee planning to double its Highlands Coffee presence in Vietnam to 180 stores.