“Don’t believe the headlines. Nobody is slowing down.”
That was the uncompromising message from Citigroup Asia CEO Francisco Aristeguieta at the APCAC Business Summit 2019 in Hong Kong.
Addressing the theme of the two-day annual conference, the Future of US Trade and Investment in Asia, Aristeguieta said that there was no escape from the issues – and nor should there be.
The “negative” view created by recent discussions between the US and China was “quite significant and real.” But the tensions were simply a part of the world “coming to terms with China.”
Trade problems – even discussions – meant evolution, and that in turn meant opportunity for American business across the region as supply chains get reassessed. Mr Aristeguieta, who oversees the bank’s businesses across 16 markets, predicted the chief beneficiaries of this trend would be Asean countries.
“Asia trade flows are the most important, and capital flows much larger than anywhere else in the world and will continue to grow,” he said. “Trade revenues in Asia last year grew 22 percent and there is no indication that growth is slowing down."
Citigroup had an “extraordinary perspective” on these developments given the fact the company has 60,000 employees across the region and a “country first” policy when establishing its businesses.
“Trade that is Asia-to-Asia is the most important to this region,” said Aristeguieta. “They are two times the size of the EU trade flows coming into Asia and five times the size of the trade flows from the US.”
This is a trend that will consolidate and improve, he said. “What we’re seeing is those supply chains moving around, and that is likely to continue until things settle in the next few years,” Aristeguieta said.
“Asia has grown on the back of free and active trade. Discussions are going on around Asia to protect that free trade and that is a fundamental component of growth.”
In terms of market growth, Aristeguieta highlighted digitization – another theme that ran across the summit – as where the greatest opportunities lay.
“Asia is leading the world in adoption of new tech and digitalization of daily lives,” he said. “A simple way to explain what is going on, particularly around payments, is ‘rocks to water’: Size of payments is coming down but volume is growing exponentially.”
The result was that distribution models were changing and now business can go straight to consumers. “There is an engagement with a proliferation of ecosystems on the back of social networks and e-commerce networks,”he said. “We are beginning to see integration by many of our clients with these and it is resulting in unprecedented growth.
“We are seeing Asian companies that start small in one country and, having access to these networks, they are expanding at an unprecedented pace.”
The two-day annual meeting of the Asia Pacific Council of American Chambers of Commerce was organized by AmCham HK and held at the Grand Hyatt Hotel.