Asia's Prospects Shine Relative to the West

Asian CFOs see growth closer to home; Western economic fires threaten.

As 2012 begins, CFOs across Asia are combining optimism with caution, upbeat about the prospects for their own companies in the year ahead yet mindful of the threats posed by economies in the West – namely the European debt crisis and the U.S. budget deficit.

CFOs in Asia predict regional and domestic growth for their companies and have a rather cautious view of the West. However, all recognized that success in Asia hinges on the West's economic ailments. Will the Year of the Dragon prove that Asia is immune to the troubles of the West?

Upbeat But Not Complacent

Cautious optimism for Asia is the overriding theme of Bank of America Merrill Lynch's inaugural CFO Outlook Asia report. Bringing together responses from 465 CFOs across seven countries and territories in Asia – Australia, China, Hong Kong, India, Japan, Singapore and South Korea – the report looks to tap into the views of the finance chiefs of Asia's large corporations.

With the global financial crisis still fresh in the minds of CFOs, could the next 12 months see the return of those challenging market conditions? In Asia, where the impact of the crisis was less severe, CFOs report they are upbeat on their own revenue expectations – but they are far from complacent, and confidence in the economy today is tempered by caution about the year ahead.

Meanwhile, the prospect of a credit crunch does not appear to worry the CFOs of Asia. Only 10% of CFOs say the availability of financing reduced in 2011. M&A activity is expected to rise this year with CFOs looking to buy in Asia, but bargains are not anticipated.


 
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An Introduction to CFO Outlook Asia
A survey of chief financial officers

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China's Economic Dragon Fires Up Regional Growth While Fuelling Fears

China is a key area of interest within the survey's findings. The country's global standing was recognised a year ago when China was officially pronounced the world's second largest economy. In 2012, China is set to be a hub of M&A activity, according to the results of the survey, and CFOs across the region are concerned about the competitive threat from China – but also need its continued growth.

As well as providing insights into the nature of China's importance within the region, the report highlights the biggest challenges faced by finance chiefs in China and their plans for 2012.

Analytical Chart

Use this interactive chart to explore data from the CFO Outlook Asia findings:

Exploring The Results

Comparing the responses by country reveals some telling geographical variations across the region. Can Japan's economic outlook be so dim with a roaring Chinese dragon in the backyard?

Meanwhile the survey drills down into the views of Asia's CFOs on a wide range of topics including:

 

Looking Forward

Bank of America Merrill Lynch would like to take this opportunity to thank the many CFOs who took the time to share their views on these important topics. In future editions of this survey we will look to build on these findings and pinpoint how CFOs' views are evolving over time.