Asia market roundup: stability, growth, and the cost of complexity

• Recently, Asia CEOs and leaders shared their views on individual markets. Below is a curated selection.

Why it matters: Asia’s economies are varied and complex. Many Asia CEOs say it is often best to tell the region’s story ‘in aggregate’ to their board and C-suite to communicate effectively.

• But individual-market insights are essential when deciding where time, resources, and investment will earn the best return.

We all want global leaders to appreciate the nuance of these markets, but in multinationals with globalised operating models, vertical functions, and hierarchical decision-making, it can also be an advantage to keep the region a black box.

The tension lies in knowing when to unpack it and when to leave it packed. One has to be deliberate: Who are you speaking to, for what purpose, and at what point in the annual cycle? A budget discussion requires something different from an ongoing business review.

During a crisis, however, you generally need to unpack the detail because crises play out very differently across these markets. The challenge is knowing when to present Asia Pacific as a coherent whole—and when to expose the differences within it.

Here’s what Asia CEOs at industrial, service, and high-tech firms are saying.

Japan is back on the radar for foreign investors…

Investors have a lot of familiarity with Japan, but it has felt sleepy and slow. Japan’s policies have been moving in the right direction, and it is all beginning to click. Japan has woken up. After living there for almost a decade, it is remarkable to see how they are changing the way they operate. They have become much more focussed on return on equity (ROE) and shareholders They are making their international businesses more growth-focused. Investors are beginning to show more interest. It is worth disaggregating Japan from the Asia story, depending on your business. It remains a massive market.

…while for MNCs it remains a large market that delivers healthy margins…

When I wake up in the morning, I think about Japan and Australia. Between the two of them, they deliver 75% of our margins in Asia.

…even if Japanese managers are known to resist outside influence.

Getting buy-in from the leadership team in Japan takes at least six months. Trust and respect take time to build, before any influence is accepted. Often, the approach is “Don’t talk to us. Let us run Japan; we have it covered.” And when they have a problem, you have to check in subtly and ask, “Is everything okay?”

Indonesia’s political volatility has returned…

Southeast Asian markets can be very frustrating. There can be positive movement in a country, and then the wrong leader comes in, and it starts falling apart again. Indonesia is our favourite event —going from excitement to disappointment and then back again. At the moment, the sentiment on the ground is that corruption is on the rise. A lot of manufacturing is moving out. The dollar is killing the market.

…and this has led some firms to reconsider their plans for greater direct investment there, to more stable markets like Japan.

We have been able to maintain a high market share, good penetration through partners in some Asian countries. It’s making me rethink: Do we need a formal setup to make money and grow in these countries, or are we disadvantaged because we’re an American company? Is it better to give the business to somebody local who can better navigate the political situation?

During COVID, nationalism was on the rise and every country wanted firms to set up local manufacturing, but that has changed. Indonesia wants that local presence, but growth has not been there to justify it. Consider Indonesia’s temporary ban on iPhone 16 sales, which was lifted in 2025 after Apple agreed to further local investment. More recently, the local-investment requirement for us, as a US firm, has become less stringent. I am rethinking whether we really need a strong footprint there, or whether we should reallocate our capital. Japan is very significant and profitable for us. So, my thoughts are: Do I want to work very hard for something that I don’t know will deliver fast enough given our quarterly reporting?

Thailand, the Philippines, and Indonesia remain among the region’s most difficult to predict…

Indonesia is good one day, and then six months later, it’s more opaque. Thailand is not so different and is a question mark. In the Philippines, we rode a wave, it came crashing down, and now we’re expecting another wave to come in. The Philippines is like Indonesia. These markets are uncertain and can be tough places to operate.

…so, when Asia heads ‘pick their battles’, less predictable markets receive fewer resources…

Telling a story for these markets is difficult because nobody can be certain what will happen in six months. That is why we focus on what we can control and manage. So India, China, Japan, Singapore, and Australia are all more manageable, predictable, and stable markets for our business.

…and the less stable remain managed indirectly via partners.

Indonesia and the Philippines are smaller markets for us and are largely partner-led by local channel partners that can navigate those ecosystems more effectively, sparing us much of the complexity of operating directly. Those markets are predominantly retail, while our larger markets skew towards B2B. Ultimately, we have to pick our battles: incremental 3% to 5% growth in established markets can deliver a more stable and profitable return than trying to manage every market directly.

Vietnam is one small-market exception; it is growing well, and local teams perform well…

Vietnam as a market is quite dynamic and our team is very capable there. We see a lot of development in software, data centres, and infrastructure, all growing at double-digit rates.

…but its ties to China are what make it stand out.

Vietnam has good growth, but it is a small market in our industry (services). From a corporate perspective, it gets lumped in with ASEAN. There’s very little focus on Vietnam, except when it comes to the relationship with China. We have a JV partner in China, and they are looking at Malaysia and Vietnam to follow our Chinese client base, such as Huawei and others, as they go out.

Meanwhile, Hong Kong’s prospects are complicated by Mainland China’s growing influence. For some, this is happening slowly…

I think the Greater Bay Area (GBA) will be meaningful, but it is a 50-year game. The data supports it, the government is pumping a lot of money into its connectivity, and Hong Kong is no longer holding back so much; they too are moving to integrate. But it will be at least ten years before it changes the dynamic of Hong Kong.

Post-COVID, there was a dip as some businesses left Hong Kong, but our business continues to be solid and a lot of investment is coming back. Hong Kong remains a conduit to China, and we anticipate growth this year. There is a lot of talk that the city is becoming more like China, that it will become the GBA, but it won’t happen so fast. Hong Kong is still special and remains where many expats prefer to live.

…for others the concern is more geopolitical and risk-related…

We have a ring-fenced business for the defence department (in a Western market), and in their minds, geopolitically, Hong Kong is China. This is something we are discussing—how to handle Hong Kong, as a geopolitical question if we continue to do outside defence contracts.

Many financial-services firms have their Asia group business headquartered in Hong Kong, and they are quietly afraid of what could play out if it becomes a flashpoint. Immediately, what comes to mind is McDonald’s in Russia, where they had to give up their stores and leave. There are many such examples. But the Russian market is much smaller. For most businesses in Hong Kong, they can’t easily walk away.

…and this has forced a delicate repositioning.

Financial firms are quietly rebasing—setting up in Singapore and progressively moving parts of their businesses into holding-company structures—without attracting attention. They do not want to trip wires with the Chinese government or create consternation among their employees in Hong Kong.

Many younger Hong Kong Chinese employees sense what is happening; their radar is much more attuned to it. The older generation, by contrast, is more resigned. The impact is generational, and the response varies by industry. Still, financial services firms are wrestling with the same quandary: how do we de-risk while keeping it off everyone’s radar?

While others see greater interaction between Hong Kong and the mainland as a net positive.

It is much easier to obtain documentation and cross the border. Many people in Hong Kong go to Shenzhen for a good dinner, a massage, or for the weekend because they can get much the same experience at half the cost. That is the natural evolution—or perhaps the beginning—of a much more integrated Greater Bay Area. It is clever planning. Ultimately, integration works best when everyone sees more upside than downside.

Singapore, like Australia, is valued for its good governance, but for some, it goes far beyond that. Singapore is positioning itself as a leader in advanced industries such as pharmaceuticals and especially AI…

The government is actively pursuing AI investment and co-funding development. In one of our initiatives, we work closely with government agencies, institutes of higher learning, and OpenAI, which has established a significant hub here. Singapore is deliberately attracting AI companies and building the surrounding ecosystem.

Singapore is our regional headquarters because it is well managed, organised, and reliable. It is also one of the region’s most digitally advanced markets. Governments across Asia come here to study the Smart Nation model and services such as Singpass, PayNow, and Parking.sg. This is not technology adoption for its own sake. These tools make citizens’ lives easier while improving security.

…and the government’s support is appreciated by Asia CEOs.

The Singapore Economic Development Board may be your most important connection. Singapore is highly regarded for government support, including grants, as well as its cybersecurity and intellectual-property protections. Compared with China, it also offers a relatively neutral base that is less directly exposed to US–China tensions. EDB can also share the government’s five- and ten-year plans. That long-term visibility is a major selling point in itself.

Singapore’s stable governance and AI advantages compare well not only with other Asian markets, but with Western ones as well, argues one Asia CEO.

How much strategic weight can a location like Singapore carry? The US is an enormous market but increasingly unpredictable on regulation. China is enormous too but faces a trust deficit. Europe is well regulated and has potential, but moves too slowly. Can Singapore carve out a distinctive position?

As a regional leader, I want to draw more corporate investment into Asia Pacific. I pitched our global team on establishing a Singapore centre of excellence for R&D and AI, even as the company was expanding headcount in California.

The Middle East has entered the Asia portfolio for some firms—and geopolitical risk is disrupting a strong growth story.

Saudi Arabia continues to perform well for us, but the UAE has been badly disrupted. People are unnerved because few imagined that the UAE itself could come under fire.

For some Asia heads, APMEA is more than an org-chart acronym: it reflects the people links between India and the Middle East…

There is a much greater flow of people between India and the Middle East than between China and the Middle East, which fundamentally changes the trust dynamic. Today, 40% of our products are manufactured in India. Its proximity to the Middle East, shorter shipping times, and stronger trust with Middle Eastern customers have made India a great success for us.

It has now become APMEA—Asia Pacific, the Middle East, and Africa. We joke that the acronym sounds like “sleep apnoea”, and the lack of sleep is real.

…and that logic is also shaped by supply chains.

The factory was originally established to serve India, which is a massive market for us, and much of its production is still consumed domestically. We have since begun exporting to the Middle East. We occasionally supply Australia as well, supported by the trade agreement, particularly when we cannot deliver something from China. But the longer shipping times remain a challenge.

The upshot: In a fragmented region, management attention is the scarce resource.

• Asia CEOs are concentrating efforts where scale, control, and returns converge and use lighter-touch, third-party models elsewhere.