Opportunities across East and West corridors

Amidst a rapidly evolving trade landscape globally, businesses are looking for new opportunities to invest and expand across East and West corridors. Efforts are underway to make the business environment more stable and reliable, while multinationals are increasingly pursuing joint venture and M&As in key markets such as China – especially as the country continues to open up its financial markets.

Attracting foreign direct investment is a growing priority across markets. This highlights the importance of facilitating cross-border transaction activity, especially amid changing stakeholder demands and supply chain disruptions. In Asia, this trend can be seen in the boost in flows between China and ASEAN, having grown from USD641.5 billion in 2019 to USD975.3 billion in 2022¹, while in Western markets outbound investment from China is making its way into a wide range of sectors, from manufacturing and transportation to construction and healthcare.

At our recent Financial Institutions Conference, we brought together speakers to discuss the emerging opportunities for investment and trade in the East and West corridors, such as:

Growing trade between markets

Global trade is seeing increased dynamism with markets developing attractive trade policies and agreements to boost flows along key East and West corridors, while businesses pursue opportunities through local partnerships and diverse sector investments.

• Trade flows between China and ASEAN is seeing notable growth, while intra-ASEAN trade is streamlining as the region integrates economically.
• Favorable trade initiatives including ongoing establishment of pilot free trade zones, as well policies such as the Foreign Investment Law, have been important drivers of foreign investment into China. These have reinforced its global positioning as an attractive market for business in areas such as technology, clean energy, healthcare and the life sciences.
• Efforts are underway to strengthen trade links within and between regions such as South Asia, Africa and the Middle East.
• Joint venture activity amongst multinational corporations is rising in China, with many looking to restructure or form new partnerships.
• Chinese enterprises are also looking to explore overseas markets and diversify their investments, looking into sectors such as wholesale retail and manufacturing.

Advancing digitalisation and ESG

Organisations are utilising emerging digital capabilities to streamline trade and cross-border transactions, in parallel to integrating ESG factors into their supply chains and sustainability efforts.

• China is offering fresh decarbonisation opportunities, with 2,200 organisations already admitted to the country’s recently launched Emission Trading System.
• The development of digitally-based ecosystems where banks, supply chain partners and regulators can collaborate are creating a more streamlined and trusted environment for business.
• The speed of trade is increasing with institutions using technology for real-time transaction monitoring as well as faster credit decisions and underwriting.
• ESG integration helps businesses anticipate both regulatory and consumer trends.

Analysing supply chain strategy

A changing and uncertain trade environment over recent years now has businesses revisiting their supply networks and looking for ways to build resilience.

• Sustainable supply chain finance is seeing strong demand as organisations look to build resilience and deepen their alignment to suppliers.
• Nearshoring to be closer to end customers is a key trend being seen across ecommerce and platform businesses.
• Financial institutions are looking at a multi-tier finance system to better understand and anticipate the risks beyond funding tier one suppliers.

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