an update on economic and manufacturing trends in asia

An Update on Economic & Manufacturing

Trend in Asia

March 7, 2013

Ted HongGoldin Peiser & Peiser, LLP

Asian Economy Still theLeading Growth Section of the World

GDP Growth %Country 2013 2012

USA

2.0 1.6

China

9.4 7.8

Indonesia

6.7 6.0

Taiwan

4.2 3.7

Japan

1.7 0.3

China -New Guys in Town

Xi

Xi Jinping, PresidentLi Keqiang,

PremierTop Agenda:

1. Curb corruption2. Manage sustainable growth 3. Develop domestic markets4. Continue to build infrastructure and move

manufacturing westward

Export Opportunitiesto Emerging Asia

– Natural Resources All big four oil companies in China are buying overseas oil resources via acquisitions or joint venture, including the recent CNOOC $15.1 billion purchase of Canada's Nexen energy group.

– Luxury Goods The forecasts in 2010 and 2011 predicted that China might exceed Japan to become the world’s biggest market for high-end consumer goods by 2015 with 25% of world share. The reality is that China is likely the world No. 1 luxury goods market in 2012 with 27% share.

– Brand Name ProductsEven though most are manfactured China, Chinese consumers are crazy about major name brand American goods.

– Leisure Industries U. S. tourism had a $4.4 billion trade surplus in 2011 in travel and tourism spending with China

Malls in ShenzhenPopulation: In1980 (as a small fishing village) 300,000, in 2013 around 14 million

•More than 20 luxury malls (most recently built was 750,000 sq. ft.) •Three malls within a 800-meter pedestrian-only district•All have high-end luxury brand stores (Louis Vuitton,

Gucci, Cartier, etc.)

Jakarta, Indonesia Another Booming Country

Luxury Mall in Jakarta

U. S. Tourism –An Export Opportunity in Your

Backyard• In 2011, Chinese tourists spent $73 billion worldwide• Average Chinese tourist spent $6,000 per trip, the

highest of tourist from any country • The Commerce Department expects annual increase

in the number of Chinese tourists to exceed 45%• Most Chinese tourists buy plenty of brand name

products, such as Polo Ralph Lauren, Tommy Hilfiger, Reebok, Gap, even though these products may be made in China

One of the LargestExport Retailers in California

Domestic Opportunitiesfor Exports

Tour groups with well established markets in most attractive tour destinations

A Good Example1. 70 motor coaches and shuttle buses2. Charter & sightseeing tours3. Pacific coast

How to ApproachForeign Markets

1. Guanxi – Connection – A myth that many westerners take to the heart. The reality is that it is not much different from the U. S. business culture. Connection gets you to the door and business strength and merit gets you the business.

2. Understand the local business practices via a partner or advisor who is versed with an understanding of both business environments and culture there.

3. Get through the communication gap – The Number One handicap working with a foreign partner – Lost in translation is very common occurrence.

4. Respect their culture but don’t have to follow blindly - Business people in most countries respect and enjoy diversified cultures .

Questions?

Email or call:Ted Hong, Partner

Goldin Peiser & Peiser, LLP

THong@GPPcpa.com214.635.2533

www.GPPcpa.comhttp://Manufacturing.GPPcpa.com/