Author: eastwestmarkets

Indonesian-US Relations

digitalRelations between Indonesia and America are expanding.  Today, according to the International Institute of Education (IIE), over the last decade there has been a substantial increase students from Indonesia (approximately 8,200 from September 2014 to May 2015) attending higher education facilities in America.

And back on the other side, according to a World Education Services (WES) study, Indonesia is building up a positive reputation since it is fast becoming one of the top markets for American global college recruitment.  It was also ranked as the third most promising market.  it seems that there is an increasing inclination for superior education which is driven by a fast-expanding economy and a large degree of the population in the early 20s demographic.

When it comes to digital advertising, Indonesia is likewise up in front.  According to Strategy Analytics, this year Asia Pacific has actually surpassed North America as “the world’s biggest market for digital advertising spend for the first time.”  Indeed, the increase in Asia Pacific for expenditure on digital advertising increased 18.2 percent and North America, almost half of that at just 9.6 percent. While it is China driving this increase, according to Digital Landscape, Indonesia is also playing a significant role as a mobile Internet frontier. Plus, according to CEO of AdKnowledge Asia, Matt Sutton, Indonesia “already big in absolute numbers. The economy is growing real quick, the e-commerce market is exciting and social penetration is really high, so it’s a combination of factors.”

So Indonesia is a region with which to be reckoned vis-à-vis education and economics for the west.

Go Power Rangers!

by Eric James Sarmiento
by Eric James Sarmiento

Some years ago, at the start of his career, Jeff Bowler held the role of business development executive for the Bandai Company – a toy store firm with a presence in both America and China. While there, Bowler managed licensing for the Mighty Morphin Power Rangers brand.

Earlier this month, these same Power Rangers Bowler worked on all those years ago, have made news!  Thanks to Funko fans can now purchase this series in vinyl figures.  Choose from: the Black Ranger, Blue Ranger, Green Ranger and Yellow Ranger.  Yes indeed, the original Mighty Morphin Power Rangers are “ready for battle!”

The superhero figures will be available for purchase in August.

UK and Japan: Working Together

stock-exchange-1222518_640The Japanese and British have been working together for centuries, dating back to the year 1600, when William Adams arrived on Japanese soil. There was a cessation of relations for over 200 years however, from 1641 to 1853, but at that point the 1854 Treaty led to relations being resumed. Since then they have gone from strength to strength, with just five years ago William Hague, Britain’s Foreign Secretary referring to Japan as “one of [Britain’s] closest partners in Asia.”

So if Britain leaves the EU, what will this mean for its relations abroad, specifically with Japan? According to Japan’s Prime Minister, Shinzo Abe, bad news. He said that it could result in a “withdrawal of Japanese companies from UK, as they often see UK as gateway to European markets.” He has thus cautioned British voters to consider this as investment from Japan would likely come under threat, resulting in less stability for the 100,000 jobs this provides.

This would mean a huge fiscal loss, causing potential damage to Britain’s economy. Japan’s economy is huge – the world’s third largest (bigger than Germany and the UK together) and in terms of technology it is seen as Asia’s “high-tech powerhouse.” Furthermore, investing there, is relatively easy; according to a UK government publication “you can set up a company in 14 days.”

Abe also mentioned that one of the reasons over a thousand companies from Japan invest in Britain right now is due to it being “the gateway to the EU.” Should this no longer be the case due to Brexit, the investments could move elsewhere. He added that their “priority is reaching trade deals with the EU, and large trade areas, rather than with individual states in the EU,” he said.

 

China in the West

chinaHow is China faring in the west these days?  While there has been some stagnation and stock market drops, simultaneously there has been direct investment and acquisitions.  One recent example was the acquisition of Syngenta by ChemChina and KraussMaffei. In addition, for the last decade and a half, there have been large-scale investments into Africa from China.  Trade has actually reached $200bn per annum, making China Africa’s largest trading partner.

Academically this is also the case.  Earlier this year, a Dual Degree EMBA has been offered by the Cheung Kong Graduate School of Business and IMD Business School in Switzerland.  Featuring five different subjects, two are taught in Europe, two in China and the fifth in South Africa given that it is midway between East and West.

A Chinese company also recently purchased Ahava. Conglomerate Fosum spent $77 million on the firm, indicating that BDS is not at the forefront of their minds.

There is a lot to be said for the pursuance of Chinese-Euro relationships.  Daniël Ben-Ezra, Media Director of Spotz Media has been studying the phenomenon over the last few years.  What he found was that ultimately the corporate gap between Asia and Europe is not that huge.  He explains:

“If you compare the European way of doing business with that of the Chinese, the importance of networking in China is paramount. Moreover, decisions are invariably made at the top of the pyramid. There is a strong hierarchy. For example, it is a waste of time talking to assistants as they have little or no authority to make decisions. The Chinese are also very bureaucratic, they love the red tape of seals, multiple signatures and copies of forms.”

Ultimately the statistics speak for themselves. Trading has escalated hugely over the last few decades.  Just back in 1977 China held a mere 0.6 percent of international trade.  But by 2012 it had become the world’s largest trading nation.   Today, 124 countries view China as their “largest trading partner,” which is huge compared to the US number of 76.

Bridging the East West Cultural Gap in Business

ChinaA cultural gap between two nations trying to conduct business together can be most disconcerting and result in failure of trade and investment deals. Articles have been written about this and those working between the two cultures have tried to come up with possible ways of overcoming this.

Adam Roseman, CEO and co-founder of FansTang (a digital media firm that specializes in the increasing demand China has for localized global content), spoke about this concept in a YouTube interview. He actually views the situation positively noting that there is a potential for “greater collaboration” between the US and China “across all industries.”  On talking about new entrants to the market on either side, having been in this position himself, he points out the importance of gaining a deeper understanding of the challenges, such as how “China and the US are both tremendous economic powers [which] both operate very very differently from a cultural perspective.”

So what are these cultural differences?  According to an article in China Daily published last year, some of them can be categorized into six points as follows:

  1. Privacy (the Chinese are quite happy to discuss topics Americans consider private such as: age, salary, marital status etc.)
  2. Family (the Chinese have a lot of respect for elders and the young are cherished and nurtured; in the US, independence is a highly sought after commodity)
  3. Friendships (Chinese have much more committed friendships; hanging out or different types of friends is not really considered a friendship like is the case in America)
  4. Money (Chinese save, Americans spend)
  5. Education (Chinese push for education whereas Americans prioritize character trait development)
  6. Collectivism (China values community; America, the individual).

Given the above, it is important to learn about each others’ cultures and work with them, rather than against them.  Roseman noted that “every deal we do, every deal we’re a part of, is a challenge but at the end of the day it really is just experience. It comes down to what is achievable, what’s doable from a Chinese perspective, what’s achievable, what’s doable from an American perspective and trying to find ways to bridge those gaps.”

Roseman also believes that in this regard, China is making greater efforts to bridge the cultural gap.  He says that both cultures need to learn from each other “through time share together and through educational exchanges.”  Having worked with both, he sees that “China has been much better in this fashion than the US has historically in terms of Chinese students coming to study in the US. We have a number that work with us who have been able to learn both cultures as a result of that. But there’s not as many American students and American professionals who do this and that needs to change. And there are a number of initiatives that have been launched in that regard you know Hillary Clinton has the 100 000 strong initiative where they’re working very heavily on getting more and more American students to China but those educational and cultural exchanges need to happen much more than they are today for the market to progress as much as it can.”

With some work and effort – probably more so by the Americans at this point – the east-west cultural gap can be narrowed and more collaboration can result, leading to a facilitation in business deals between the US and China.

East West Trade Agreement

canadaThe FIPA has just been approved.  This Canada-Hong Kong foreign investment promotion and protection agreement was signed by Minister of International Trade in Canada, Chrystia Freeland and Secretary for Commerce and Economic Development in Hong Kong, Gregory So.

It is hoped that Canada will benefit from this via new potential investments in: agricultural products and processed food, financial services, communications technology, education, information technology, professional services, sustainable technologies and transportation.

According to Freeland:

“With our strong trade ties and established trade and investment links, Hong Kong is a natural partner for Canadian business.  Hong Kong offers a dynamic economy, and today’s investment agreement will help Canadian businesses more easily access this reliable entry point into the larger Asia-Pacific region. Together, we are focused on enhancing the prosperity of Canadians at home and connecting them to opportunities abroad.”

So added:

“Hong Kong is the key trade and investment center of Asia and an ideal gateway for Canadian businesses to tap into the vast market potential in the region, particularly the mainland of China. The signing of the investment agreement will give additional assurance to investors, expand investment flows between Hong Kong and Canada and further strengthen our existing strong economic and trade ties.”

The agreement can only be a good thing, given the existing collaboration between the two regions.  Currently there are around 300,000 Canadians living in Hong Kong and 500,000 Hongkongers living in Canada.

Euro-Indonesian Trade

indonesia marketIndonesia sees the benefits of improving its trade relations with Europe through the establishment of the Indonesia-European Union (EU) Comprehensive Economic Partnership Agreement (CEPA). By being a part of this, Trade Minister for Indonesia Thomas Lembong believes it will lead to “modernization” of current trade regulations in Indonesia and it has thus become “the current top priority” of the government. Hopefully an agreement between Indonesia and the EU will be reached by late 2017. Following that the next move will be becoming a member of the Trans-Pacific Partnership as well as the European Free Trade Association (TPP and EFTA).

Given that Indonesia is the largest economy in the Southeast Asia region, if this CEPA membership goes ahead, it will not only strengthen its investment climate, but this will have a trickle down affect into the entire region. By emancipating government appropriation and diminishing trade barriers, various major commodities will be given “great potential.”

While there has already been free trade cooperation agreements between the EU and Indonesia since 2011 with Susilo Bambang Yudhoyono’s administration, the CEPA will further formalize these and lead to a relaxing of barriers, furthering trade between the regions. It has thus been decided that CEPA membership is a higher priority than the TPP once. Further, if trade commitment is not enhanced between the EU and Indonesia, this will negatively impact the competitive edge Indonesia has, making Malaysia and Vietnam more attractive options for FDI. As things stand, Vietnam already has free access to take part in the US and EU export markets.

So these official agreements have to be made, and soon, if Indonesia wants to remain a key player in East-West markets.

Enhancing UK-China Trade Relations

[youtube https://www.youtube.com/watch?v=OYSZE-WuUSU&w=560&h=315]
Officials from China and the UK on Tuesday held talks in continuing the momentum of China-Britain relations and cooperation in the new year.

A joint press conference was also held where Chinese Foreign Minister Wang Yi and the UK Secretary of State for Foreign and Commonwealth Affairs Philip Hammond exchanged views in building future projects and working together in various fields.

Wang and Hammond agreed that Chinese President Xi Jinping’s state visit to the UK last October was a great success, and now both sides have the responsibility to implement the decisions and commitments made during his visit.

Women in the Workforce: East V West

womenHow are women faring in the workforce throughout the world? How does the east compare to the west? According to a study recently released by Swiss bank UBNS Group AG, there is a major increase in the amount of women who are billionaires throughout the world.   A lot of them, the study found, are from the Asia region, in the last decade, up to 25 from three. Many of these female Asian billionaires are from China and Hong Kong and over half made their own money themselves, a lot of it coming from real estate investments.

Indeed, looking back over the last two decades, it seems that the amount of female billionaires has increased seven times with the average wealth almost doubling to $4.3 billion, which is more than the average amount a male billionaire has – $4 billion net worth. Although men still comprise the majority of billionaires, women still made up 11 percent last year which is an increase of 9 percent 20 years ago.

However, moving over to Europe, a recent report from Mercer showed that the billionaire bug is not exactly the same for women. Indeed, it is being predicted that there will be a halt in the increase of women in broad professional ranks of Europe’s leading employers. This seems inconsistent with the significant advances women have made in top executive roles.

Still, in more positive news it is forecasted that there will be an increase of 21% to 33% by 2025 in the “share of women in executive ranks” in Europe. The somewhat strange contradictory phenomenon is explained by Principle in Mercer’s Workforce Analytics, Julia Howes. She said: “Quotas in Europe have had a big impact in boosting female representation in senior roles. But there’s a disturbing revolving door. While firms are focused on recruiting women at the top, it doesn’t appear they’re keeping them…and that could threaten the progress they’ve made, unless they act now.”