Boao Forum participants optimistic about emerging markets

Business and political leaders from around the world have gathered this week in south China’s island province of Hainan for the Boao forum for Asia.

Against the backdrop of the global downturn, their focus is Asia’s economy.

But participants are optimistic about the continent’s emerging markets. Maersk Line is the world’s largest container shipping company, and they’ve got their eye on the tremendous opportunities to be found in Asia.

Despite a robust economic outlook for the future, challenges remain. This is especially the case for export-oriented economies, which are finding their traditional markets are shrinking.

CCTV correspondent Guan Xin said, “To cope with external pressure, participants say the most important thing is to build on internal demand. That means, to encourage Asian consumers to spend more.”

Companies are already capitalizing on the trend. A top executive at Starbucks says it plans to triple the size of its workforce and network of shops in China over the next three years.

John Culver, Int’l President of Starbucks Coffee said, “We are committed to making China as our second home market of the company…By 2014, China will be our largest market outside US. And by 2015, we will have 50 hundred stores on the mainland and operating in over 70 cities, so for us, we see it as a big opportunity…”

But it’s not easy to stimulate this kind of demand. Income inequality is still a common issue for many Asian countries.

Xiang Bing, Dean of Cheung Kong Graduate School of Business, said, “Without middle class as majority, it is virtually impossible to have a harmonious society. The Chinese economies did well in terms of generating billionaires, and we are No.2 on the Forbes list already. Maybe in 3 or 5 years, we will be No.1, catching up with the US, even overtaking US. But if you look at the percentage of middle class of the total population, I think we need to improve. These are some structural changes of China. It gonna be taking some long time.”

Middle class consumers in Asia will increase by 1.2 billion by 2020. But as just a part of a much larger population, that is still far from enough.