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CHIEF executive officers (CEOs) in the Asia-Pacific region have expressed greater confidence for growth over the next 12 months, with the majority of them planning to back this up by stepping up investments in the Asia-Pacific Economic Cooperation (Apec) region.
A survey of more than 600 Asia-Pacific CEOs by PwC found 46 per cent of respondents to be "very confident" of revenue growth in the next 12 months, up from 42 per cent a year ago and 36 per cent in 2012; this was despite slowing growth in China, a major economic engine for the region.
The majority of CEOs (67 per cent) said they planned to increase investment in the Apec region in the coming year, with China, the United States, Indonesia, Hong Kong and Singapore being the hottest investment destinations.
More than half of them said they were either building or expanding facilities in Apec economies in the next three to five years, pumping in an estimated US$56 billion. Among them, 37 per cent said they were building or expanding facilities in China.
Frank Ning, chairman of Cofco Corporation, said: "We want to extend our supply chain beyond China into Apec economies or even beyond Apec economies. We are investing in areas like agriculture - from farming to origination of agricultural products - and trading facilities such as ports and railways, as well as trading networks."
The PwC report, released last Saturday at an Apec meeting in Beijing, noted that underscoring this confidence among CEOs was "a vision of an Asia-Pacific region that was more connected, both physically and virtually, and an outlook for more balanced regional growth".
Business leaders said they expected a more balanced and closely connected Asia-Pacific, with the great China-US dynamic remaining Apec's dominant feature over the next decade.
Jonathan Larsen, global head of retail banking and Asia-Pacific head of consumer banking at Citibank NA, said: "We expect Asia to continue to demonstrate disproportionate growth relative to the rest of the world. We expect the growth of the consumer economy to be an important factor in driving that growth."
PwC International chairman Dennis Nally noted that one loud and clear message from the CEOs was the need to "be bold and break down barriers to growth". The CEOs had expressed a desire to see the Trans-Pacific Partnership agreement finalised, intellectual property issues being addressed and greater regulatory harmony in the region, he said.
But barriers to business growth have not receded in the past four years; in some cases, they have even been amplified. A majority of respondents said they believed Apec was moving closer to a Free Trade Area of the Asia-Pacific (FTAAP), but 55 per cent conceded that progress was slow. The PwC report said businesses were looking for policy relief on behind-the-border issues. Changes to non-tariff trade barriers ranked top in terms of having the most impact on their businesses.
Nearly 60 per cent of executives surveyed said they were now more willing to share insights and resources with business partners in order to speed up product development and gain market access. And more than 40 per cent said their company was likely to enter a business combination outside their core industry.
Jiang Zengwei, chairman of the Apec CEO Summit 2014 Host Committee and China Council for the Promotion of International Trade, said: "Business models used to be focused on competitiveness and the pursuit of self-interest. Now, the survey tells us there's an ever-greater aspiration to formulate strategies that build trust and broader collaborations."
The digital economy was also shaping the way businesses viewed risks and challenges, he said, adding that as the e-commerce landscape continued to evolve, opportunities once thought inconceivable were now within reach.
DBS Group chief executive Piyush Gupta said in the report that, with the rapid integration of trade and capital-flow patterns, there was "tremendous opportunity with the growth of new Asian multinationals" - the result of small and medium-sized enterprises spreading their wings abroad and making a big shift to go digital.