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European Businesses Must Engage with Rising Asia, Says HSBC Report
Source: yahoo.com
Source Date: Saturday, July 03, 2010
Focus: Citizen Engagement
Created: Jul 05, 2010

HONG KONG, July 3 (AFP) - As the global economic axis tilts towards Asia, European businesses are at risk of being left behind, according to a report released by HSBC. The model where the West did the development work and the East took care of production with cheap labor is dead, it says, adding that innovation will increasingly originate from the East. "Unless European business confronts the implications of the re-balancing of economic power and the growth of Asia, business opportunities will be lost and business threats will increase," it said. The "Looking East: The changing face of world business" report investigates the challenges and opportunities of the rise of Asia for European businesses and identifies current and future trends. It warns that European companies are at risk of not engaging with the new economic world order. "We are no longer looking at when West meets East, but at how the East will redefine the West and the way we do business," said Alan Keir, HSBC's group general manager and global co-head of Commercial Banking. "It's crucial that European businesses are not only appreciative of this fundamental and fast-paced change, but that they are able to respond swiftly and effectively. Our competitiveness as a region is at risk." Firms must look at how they can capitalize on Asia's diverse consumer base, skilled workforce and advances in research and development, while mitigating the risks posed by the macro-economic climate. Booming Eastern populations and consumer wealth will create unprecedented market opportunities for European businesses, the report says. But "the free-market, liberal principles on which the West was built are often in direct contrast to methods of rule in the East," it adds. "European businesses need to be aware that the competitive playing field is not necessarily level." "As the influence of the West declines, the importance of business relationships in Asia will grow: European companies must not find themselves sidelined in the new economic and political order." In the Asian workforce, the result partly of huge investment in education means the paradigm where the West did the design and development work and the East took care of production and manufacturing is anachronistic.
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