In addition to China and India, Trusted Sources’ Asia research now includes coverage of Indonesia, South Korea, Thailand and Taiwan (which is also included in our Greater China channel). We have added these countries to our research agenda because they, like the BRICs, have relatively high rates of economic growth, emerging middle classes and are either substantial marginal producers or consumers of the world’s natural resources. In addition, these countries are closely integrated with China and India as well as the world economy via deepening trade and financial linkages. Exploring the connections between and among these countries, the BRICs and developed countries form the core of our work. Finally, as is true in the BRICs, policy making in these countries is opaque; this creates an opportunity for value to be identified via the Trusted Sources approach of in-country analysts and regular country visits.
Among these countries our main focus is Indonesia. Since 1998 the country has successfully negotiated a transition from authoritarian rule to democracy while putting in place a record for solid economic management that has supported stable growth averaging more than 5 per cent annually over the last 12 years. Growth is being propelled by domestic consumption – which accounts for nearly 70 per cent of GDP – as Indonesia’s young consumers enter the middle class at a rapid pace. The country also plays a pivotal role in global commodities trade and is a major supplier of natural resources, including coal and palm oil, to China and India.
Indonesia’s challenge now is whether it can make the economic and political changes required for the country to continue to fulfil its growth potential. Our research provides a guide to Indonesia's growth prospects by focusing on its evolving position in the global commodities trade, infrastructure development, the quality of governance and the ability of the government to move forward on reform. In addition to covering growth drivers such as consumption and demographics we will also examine how these trends, mediated by government policies, will affect inflation, agriculture, natural resource development and the emergence of the manufacturing sector.
Taiwan plays an indispensable role in every link of the global IT supply chain. As a result, it has been and will continue to be a principal beneficiary of the exponential growth of consumer electronics demand. However, the country’s reliance on IT also means it is highly exposed to the global economic cycle. Moreover, cross-Strait relations have become a dominant long-term growth driver that links Taiwan with developments on the mainland. Our research provides important insights into Taiwan’s developing growth model, focusing on export dynamics as well as political and economic relations with China.
South Korea has transformed itself into the most competitive Asian exporter and is well-positioned to benefit from demand growth from China and other emerging markets. Meanwhile, its financial vulnerability to global shocks has been substantially reduced through major reform initiatives. Our analysis focuses on the internationalization of Korea while assessing its risk exposure to the global economy. The success of Korean companies in establishing leading global brands augers well for investors in the medium and long term.
Thailand's position as a critical supplier both of automotive parts and hard disk drives was highlighted late last year when floods severely disrupted regional supply chains. The country has now embarked on a major expansion of capex to replace the facilities that were destroyed and to develop extensive flood-control infrastructure. The opening up of Myanmar promises to create opportunities for Thai firms in bringing new technologies and management practices to this resource-rich nation. Thailand has a long history of conservative, pro-business management that puts it in a strong competitive position in the Southeast Asian region.