Stability and transparency necessary to attract business
Political risk is a serious concern for investors across Southeast Asia.
19 OCTOBER, 2018
Approximately 20 years ago, Southeast Asia was plunged into chaos as the Asian financial crisis ravaged a string of countries where growth had been fuelled by unhealthy levels of debt. Since then we have seen a strong comeback by countries such as Indonesia, Malaysia, the Philippines, and Vietnam. Along with the other ASEAN countries, they represent both yesterday’s Asia and the Asia of tomorrow.
For China it will be of key strategic interest to find ways of growing in harmony with Southeast Asia. There is a need for continuity and patience in ongoing China-ASEAN discussions aimed at strengthening relations across the spectrum, within trade of course, but also for example within peace and security. Forecasts pointing to Asian countries representing four of the world’s five most powerful economies in 2030 are predicated on long-term stability. In other words, none of the countries concerned can afford unnecessary disputes, let alone military muscle flexing over contested areas like the South China Sea.
As made clear in our Focus story, political risk is a serious concern for investors across Southeast Asia. Quotes from member companies indicate that a stable political environment, transparent rules, and a society characterised by openness and opportunity for individuals, will attract business.
Political stability and transparent regulation have of course been hallmarks of Hong Kong for decades, helping turn the territory into a truly unique international business hub, “imitated by many, surpassed by none”. One intriguing opportunity for Hong Kong today is to strengthen its reach into Southeast Asia. Thanks to an extensive free-trade agreement signed by the Special Administrative Region and ASEAN in 2017, the necessary legal infrastructure is already in place.
At the same time, Hong Kong needs to make sure it does not forfeit any of its inherent advantages, the rule of law being chief among them. Recent developments in the area of press freedom have created concerns that the government does not fully appreciate the importance of fundamental freedoms, as enshrined in Hong Kong’s constitution, the Basic Law. This is in fact Hong Kong’s trump card. We therefore take this opportunity to call on the government of Hong Kong to confirm its commitment to a free press, in both word and deed.
Today we see Chinese media organisations expanding across the world. In doing so, they seek to bring a Chinese perspective to international news reporting. This should be welcomed, just like China and Hong Kong must welcome international journalists reporting, sometimes critically, on events in this part of the world. With Hong Kong’s proud tradition as an international media hub, international companies are right to be concerned if the government is seen to infringe on press freedom.
We are also pleased to report that a network of Swedish business organisations across Asia is starting to take shape. Our chambers of commerce have an invaluable function as facilitators of trade and investment. By coordinating our activities and learning from each other, we believe we will be able to bring our members even more value. A first “SwedCham Asia Summit” will be held in Hong Kong in early 2019. We hope to see you there!
On a final note, it also pleases us that Dragon News, from this issue, is taking another step in its development by transforming itself into a web magazine. From now on you will be able to read the magazine’s content on www.dragonnews.se but we will also keep the printed edition. With the new web magazine, our members will have the opportunity to share articles with friends and colleagues and our member companies will be offered even better advertisement options to reach the Swedish communities in Hong Kong and China.