December 1, 2008 Monday

Crisis has sped up shift of power to Asia

Asia's ability to weather hard times clearer with collapse of West: authors

By Robin Chan

THE financial and economic crises have sped up the inevitable shift of power to Asia, said experts on the matter last Friday.

Professor Wee Chow Hou, Nanyang Business School's head of the division of strategy, management and organisation, said: 'We knew the East was rising, it was just a matter of time. But the financial tsunami has accelerated this.'

He was speaking at the Raffles Town Club at the launch of a book entitled Business Journey To The East, which he co-wrote with Mr Fred Combe, founder and managing director of Natus, a Singapore-based corporate management consultancy.

Mr Combe said: 'Nobody could have perceived the collapse, but everyone knew the East was funding the West's deficits. The events that happened in the last few months have accentuated the problem. So the book has more relevance today than when we started two years ago.'

The book highlights the importance of engaging Asia, especially China, on its terms through a better understanding of the business culture there.

Mr Combe said: 'I've been working in Asia for a long time, and to see Western companies make the same mistakes is frustrating. We wanted to capture this learning and pass it on to companies who want to be in Asia.'

One of the main topics includes the issue of 'face' and the importance of cultivating relationships or guan xi.

Despite the recent turmoil in Bangkok and Mumbai, both authors said that these conflicts will not disrupt Asia's rise.

Prof Wee said: 'In Asia, we have to look at it in totality. The dragon head is China. Even with the economic crisis, it is only slowing to 7.5 or 8 per cent.

'Asia has always been dotted by some hiccups here and there. It's not something new. Somehow Asia has been able to overcome these hiccups and still grow. In fact the trend is now much clearer because the West has collapsed.'

He added that while the going will be tough in the next few years, he believes that Asian governments are now a lot better prepared than during the Asian financial crisis.

Mr Combe said: 'The crisis has reinforced the need for the two cultures to rebuild together from the ashes. Smart companies will reflect on what has happened and capitalise on opportunities.'

He believes that Asian companies or sovereign wealth funds will be looking at possible acquisitions of Western companies because their valuations are now low.

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