What's happening in Intra Asia





Is intra-Islamic trade in intra-Asia region all it can be - or can we expect it to do better - much better?

While the world map has Islamic turf including much of the land mass in the west, that is Africa and the Mideast, the bulk of the Muslim population lives in the east - lands served by the intra-Asia trade.

Sixty-two per cent of the world's Muslims live in the intra-Asia region from Turkey (pop 80 million) to Indonesia (pop 264 million), with over one billion adherents. The largest Muslim population in one country is in Indonesia, followed by Pakistan (pop 220.8 million), Bangladesh (pop 161.3 million) and India (Muslim pop 143 million) and Malaysia (Muslim pop 19.8 million).

One would have thought that Muslims, who share a common culture and a unique banking system and a trust-based method of transferring funds, would have developed, perhaps even dominated, the intra-Asia trade, as indeed they did in pre-colonial times.

Australia wants it to be called Indo-Pacific, but protectionism is the real barrier to success

Broadening the scope of what constitutes the intra-Asia trade has been the subject of discussion - though conceptions of what it might include differ even among allies. Understandably, Australia and New Zealand would like to be included and pin their hopes on having it extended and strengthened, though they would like to see it known as the Indo-Pacific trade.

That's because to some, intra-Asia trade lanes should extend from India to Japan, taking in Korea. China and Southeast Asia, Indonesia and Philippines as well as Australia and New Zealand.

Still others, the Indians for example, would like to include the Middle East and East Africa while the Japanese and Australians would like to include North, South and Central America.

Sino-US trade war provides an escape from the low-profit, high volume intra-Asia market

Apart from the continuing political crisis and protests in Hong Kong and the fall-out from the Sino-US trade war, also clouded by the coronavirus pandemic, there are factors other than country risk that drive multinationals to diversify to South East Asia - namely cost.

Over the past few years, big companies have increasingly reacted to the trend of rising Chinese wages by relocating labour-intensive manufacturing to Southeast Asia.

This has brought about a considerable wealth transfer into the intra-Asia trading zone, which is still the poor relation of global trade, and in which it is notoriously hard to achieve profitability with its high volume and perennially low dollar volume.

To exit China - or stay put? That is still the question facing multinational corporate manufacturers today

To exit China as a manufacturing base - or stay put? That is the question faced by multinational corporations. And while those who built and perfected the China-transpacific and Asia-Europe supply chains speak with established voice of the establishment, urging all to stay put, there are other sub rosa voices who whisper exit.

Just as business exited other jurisdictions when hostile regimes took hold, those exiting did not boldly announce their intentions, but stole away, maintaining a semblance of normality as a smoke screen to cover their retreat to more congenial social climes.

We have been encouraged to think the Sino-American trade war is over. Both US President Donald Trump and Chinese President Xi Jinping need the semblance of a victory. China has agreed to make big farm purchases, which gets Trump off the hook if he can make this truce look like a lasting peace. Ditto for President Xi who needs something of the same to mollify his cadres at the municipal and provincial level who are facing unemployment, and reduced state subsidies in the face of weakening western demand – not to mention the stress brought on by the coronavirus.


Intra Asia Trade Specialists

Nippon Express (HK) Co., Ltd.
Visible & Strategic Logistics
Recent Issue

Mediterranean & Africa Trade

Feb, 2020

China Trade

Jan, 2020

Europe Trade

Dec, 2019

U.S. Trade

Nov, 2019