Executive Summary

The Asian economic landscape is undergoing a seismic transformation, presenting both challenges and opportunities that demand strategic foresight from senior leaders across industries. This paper distills the invaluable insights derived from an expert panel discussion moderated by Daniel Moss (Editor and Columnist, Global Economics at Bloomberg Opinion) and featuring Caitlin Nguyen (Head of Digital and Customer Engagement, Established Pharmaceuticals, Abbott), Sam Ahmed (Managing Director & Group COO for Global Financial Markets, DBS Bank), and Anna Green (Chief Enterprise Services Officer, Toll Group). It sheds light on key trends reshaping the region's economic dynamics.

China's strategic economic approach, exemplified by initiatives like the Belt and Road Project, has catalyzed a ripple effect across Southeast Asia. Beijing's substantial infrastructure investments and export of industrial capacity have disrupted established dynamics, prompting Southeast Asian economies to accelerate organic growth and self-driven development paths aligned with their long-term interests.

While escalating US-China geopolitical tensions have disrupted global supply chains, this disruption has unlocked new growth avenues and opportunities for companies willing to strategically invest in emerging markets. A pragmatic approach to diversifying operations, exploring untapped sourcing channels, and fostering strategic partnerships can position businesses to capitalize on the changing landscape.

However, companies must remain agile and adaptable to navigate the intricate web of regulatory complexities and stringent sustainability mandates, particularly in the European Union. Establishing balanced frameworks that foster innovation while ensuring compliance is crucial for maintaining stakeholder trust and market access. Concurrently, rapid demographic shifts, such as the "Silver Tsunami" of aging populations, are disrupting traditional business models, necessitating innovative solutions. The healthcare sector, in particular, must embrace transformative digital technologies like telehealth platforms to enhance service delivery and accessibility amidst complex regulatory environments.

Furthermore, as the US dollar continues to be wielded as an economic weapon, alternative mediums of exchange, including cryptocurrencies, are garnering interest as potential neutral currencies for global trade. Senior leaders must stay attuned to these undercurrents impacting international finance and currency dynamics.

By distilling these critical insights, this paper aims to equip senior leaders with the strategic perspectives essential for capitalizing on the immense potential of Asian markets while mitigating associated risks. Embracing long-term strategic planning, technological innovation, and adept navigation of geopolitical forces will fortify competitive advantage in the region's rapidly evolving economic landscape.

About the Contributors

Anna Green, Chief Enterprise Services Officer, Toll

Anna Green is a highly accomplished and inspiring leader with a diverse background spanning law, banking, and currently technology as an executive at Amazon Web Services (AWS). In her role at AWS, she leads the Small and Medium Business team across Asia Pacific and Japan, driving international business growth through digital transformation initiatives. Prior to AWS, Anna served as the CEO of ANZ Bank in the Philippines and Laos. She began her career as a corporate lawyer at prestigious firms in Sydney and London. Anna has held several board directorships, including for ANZ entities across ASEAN and the Bankers Association of the Philippines. A champion of diversity and inclusion, Anna has collaborated with the UN, regulators, governments, and business councils to drive meaningful change in these areas. She is a multi-talented leader with qualifications including a law degree, arts degree, and executive education from INSEAD. With experience living and working across Sydney, London, Southeast Asia, and now Singapore, Anna brings a truly global mindset. Her decade in Southeast Asia has given her an affinity for the region and a love for karaoke.

Caitlin Nguyen, Head of Digital and Customer Engagement, Established Pharmaceuticals, Abbott

Caitlin solves business problems by leveraging digital and transforming B2C and B2B organizations to deliver higher value commercial outcomes. Her area of expertise centers on driving digital transformation and innovation with a focus on the multichannel and connected customer experience. Throughout her career, Caitlin has worked with businesses such as Philips, Sanofi, Coca-Cola, Heineken, MasterCard, GSK, and Levi Strauss to deliver integrated strategy, CRM, connected commerce, and digital capability enablement.

Sam Ahmed, Managing Director & Group COO for Global Financial Markets, DBS Bank

In his current role as COO of DBS Treasury & Markets, Sam is globally responsible for Business Management Services support teams including: Trading & Sales Desk Support/Middle Office, Operational Risk, Project Management, Business Strategy Planning & New Products. He also chairs various regulatory committees including playing an active role as Director of T&M’s fund management businesses and is a member of the T&M Executive Committee. Sam came to DBS with 27 years of experience in Global Markets roles across Lehman Brothers, Merrill Lynch and Citi where he worked both in FICC trading and Securities Services sales along with managing risk and middle office teams. In his last role, Sam also ran a management consulting company focusing on helping Asian banks build FICC, custody and prime markets businesses along with working with regional banks and asset management companies to undertake digital transformation.

Daniel Moss, Editor and Columnist, Global Economics at Bloomberg Opinion

A journalist for more than two decades on four continents, Dan is a Bloomberg Opinion columnist covering Asian economies – central banks, markets, and policy. He has led teams in Asia, Europe, and North America. Previously, Dan was Executive Editor of Bloomberg News, where he built economics news at Bloomberg News into a powerhouse of reporting and editing. He also founded Bloomberg Benchmark, a podcast on the economy. Dan regularly shares his insights on Bloomberg TV and conferences around the world. His expertise includes global economics & policy, central banks, Asia and trade. He was Kuala Lumpur bureau chief during the Asian Financial Crisis. He is also a Director of the ANU Foundation USA, a nonprofit aimed at fundraising for alma mater Australian National University.

China's Strategic Economic Approach and Geopolitical Dynamics

China's Strategic Footprint Catalyzes Southeast Asia's Economic Transformation

Departing from the Western focus on short-term profits, China's economic strategy is defined by meticulous long-term planning and substantial infrastructure investments worldwide. Initiatives like the Belt and Road Project exemplify China's commitment to expanding its global economic footprint by strategically exporting industrial capacity and cultivating strategic international partnerships.

Sam Ahmed argued that dismissing China based on recent "suboptimal decisions" during and after COVID overlooks their prudent, decades-long approach to economic development. He cited China's investments from the 1990s onwards, onshoring companies while taking advantage of their excess supply of cement, steel and labor in deploying them for overseas expansion under the guise of One Belt, Road is evidence of their long term strategic vision.

While escalating US-China geopolitical tensions have disrupted global supply chains coupled with the use of sanctions, the disruption has catalyzed economic opportunities for Southeast Asian nations. As Sam Ahmed states:

"Some of the disruption has benefited Southeast Asian countries such as Vietnam, Malaysia, and Thailand who actually offer much lower labor costs. I think it's a good thing for Southeast Asia because instead of relying purely on tourism or cheaper export led growth this shifting of manufacturing will provide jobs, support the growth of a strong middle class segment which will in turn allow their their economies to grow organically, and it's a good thing for the region” - Sam Ahmed

On a similar note, while acknowledging the shifting geopolitical dynamics, Caitlin Nguyen states that beyond navigating geopolitical risks, Southeast Asia can also greatly benefit from "learnings out of the China experience" regarding its thriving digital economy and its AI advancements. The learnings and inspiration that this period can provide Southeast Asia cannot be overlooked.

China's strategic economic imprint, catalyzed by tensions with the US, has disrupted established dynamics and prompted Southeast Asian economies to accelerate organic growth. The region finds itself at an inflection point, leveraging China's infrastructure investments while embracing self-driven development paths aligned with its long-term interests. This convergence of geopolitical forces and economic realignment is poised to redefine Southeast Asia's role in the global economic landscape.

Navigating US-China Tensions and Supply Chain Shifts

Escalating US-China geopolitical tensions, driven by a bipartisan US consensus viewing China as a strategic competitor, are catalyzing shifts in global supply chains and influencing trade policies. Notably, Southeast Asian nations are emerging as attractive alternatives to China for manufacturing and resource procurement, positioning themselves as key beneficiaries of this geopolitical dynamic – a phenomenon Anna Green has witnessed firsthand during her time in the region.

Despite the confrontational rhetoric between the US and China, the panel highlighted that practical economic imperatives often lead to pragmatic solutions that facilitate the continued flow of goods and services, as Anna Green observed from her logistics experience.

Moreover, Anna Green highlighted the tangible impacts of these geopolitical undercurrents on global supply chains. "We do see the 'China plus one' policy still having an impact, with Vietnam and Indonesia being beneficiaries of that, and to some extent Mexico as well," she observed.

Interestingly, she noted how the US sanctions policy has catalyzed a novel workaround:

“Goods manufactured in China will be shipped to Mexico, partially made. There's manufacturing springing up in Mexico to complete it as 'Made in Mexico', circumventing sanctions before reaching the US.” - Anna Green

While such geopolitical motions reshape trade flows, Anna Green maintained "no sign that supply chains back and forth out of China are decreasing anytime soon." Her insights highlight China's strategic investments and the intricate supply chain adaptations amid the tectonic geopolitical shifts reverberating globally.

China's Soft Power and Strategic Investments in Southeast Asia

Drawing from her firsthand experience as the former CEO of ANZ Bank in Laos, Anna Green provided a nuanced perspective on China's strategies in the region. She recounted witnessing China's soft diplomatic power implemented through weighing and investing in the countries of the Mekong region.

Anna Green vividly recalled how the government was investing 70% of the GDP in building the Laos-China railway, underscoring China's ability to implement, architect relationships and influence economic policy through strategic investments.

Her tenure in the Philippines further reinforced these observations:

“I saw the same type of behaviors - soft diplomatic power, conversations about investment happening at a macro level, deals happening behind closed doors.” - Anna Green

These experiences revealed a continuation of a much longer-term agenda from the Chinese government focused on shaping regional perceptions, facilitating investments, and cultivating strategic partnerships. As Anna Green emphasized, China’s approach is a markedly different diplomatic motion as compared to Western approaches. She cautioned, "Don't think that because the US has a different point of view on China in the last five years, that it has any impact on their longer-term approach to investing, building and growing relationships in the region."

In contrast to the US's more confrontational stance, China has strategically leveraged soft power through substantial investments in Southeast Asia, fostering long-term economic ties and regional influence, according to Anna Green's first-hand accounts from her time in the region. This nuanced approach offers a compelling model for senior leaders to consider.

Addressing the "Silver Tsunami" through Innovation

Demographic Pressures and Economic Implications

Countries like Japan, Korea, and Singapore are grappling with the profound economic and social ramifications of aging populations – a phenomenon dubbed the "silver tsunami" by Caitlin Nguyen during the discussion. According to the World Health Organisation, the global share of the population aged 60 years and over will nearly double from 12% in 2015 to 22% by 2050, requiring healthcare systems to adapt to the increasing pace of population aging. These demographic shifts are straining pension systems, healthcare services, and altering consumer behavior patterns, necessitating innovative solutions that transcend traditional pharmaceutical approaches.

Underscoring the economic ramifications, Sam Ahmed highlighted key statistics - Singapore's population aged 65 and above is projected to surge from 20% currently to 25% by 2030 according to government forecasts. However, he also outlined potential opportunities presented by this "silver tsunami." Notably, Singapore's elderly demonstrate a high savings rate unmatched in the nation's history, coupled with being relatively well-educated and tech-savvy. This combination positions healthcare as a prime sector for investment and innovation tailored to their evolving needs.

Sam Ahmed envisions a paradigm shift away from traditional brick-and-mortar hospitals towards remote healthcare solutions - wearable gadgets for self-monitoring, mobile apps connected to these devices uploading data to cloud services for real time self assessment, and a heightened emphasis on disease prevention. Sam Ahmed shares:

So, you know, we are seeing increasing trends of private equity & VC companies seeking investments towards smart monitoring technology & wellness services for the elderly and I think that it'll continue to grow.” - Sam Ahmed

Moreover, Singapore's world-class medical infrastructure presents prospects for capitalizing on medical tourism, seamlessly facilitating inbound patient care from regional hubs like the Middle East through optimized processes at Changi Airport and partner hospitals. As the nation grapples with its graying demographics, novel solutions transcending conventional pharmaceutical approaches will be pivotal to sustain economic vitality.

Similarly, as Caitlin Nguyen explained, the healthcare industry's traditional focus has been "the pill" - developing therapeutics, molecular inhibitions, and delivery mechanisms for healthcare solutions.

“This is a topic that myself, my leaders, and stakeholders have been discussing with huge focus. We need to move beyond the pill, to address the evolving needs of this silver economy or silver tsunami” - Caitlin Nguyen

However, she emphasized that addressing the "evolving needs of this silver economy or silver tsunami" requires a paradigm shift. This imperative demands connecting different domains and leveraging technology to enhance service delivery models. As Caitlin Nguyen described, "It's about thinking how we connect those dots from a service perspective, leveraging technology where possible to develop feedback loops that drive innovation for better, faster health outcomes."

The Transformative Potential of Digital Technology

According to the United Nations, the growth of the older population is outpacing the growth of the working-age population in many countries, putting strain on healthcare services.

By adopting this patient-centric, technology-enabled approach that transcends conventional pharmaceuticals, healthcare leaders can pioneer breakthrough solutions to meet the multifaceted needs of rapidly aging Asian societies. Caitlin Nguyen's insights underscore the urgency of redefining value propositions for the Silver Tsunami through comprehensive care paradigms.

Integrated healthcare solutions harnessing technological advancements offer a viable path forward. Telehealth platforms, exemplified by Indonesia's HelloDoc cited by Caitlin Nguyen, are revolutionizing healthcare access for aging populations.

As economies grapple with rapidly aging populations, traditional industries like logistics and freight forwarding are being reshaped by shifting consumer dynamics and technological disruption. Anna Green, an industry veteran who transitioned from Amazon Web Services to Toll Group, highlights how the burgeoning digital healthcare ecosystem has fundamentally altered supply chain requirements. Online clinics and remote medical solutions necessitate transporting specialized equipment across borders with stringent specifications. However, this disruption extends beyond just medical supplies to encompass technology products catering to silver consumers' evolving needs and lifestyles.

While the digital economy presents new revenue streams for legacy logistics players, Anna Green cautions that capitalizing on these opportunities requires overcoming significant hurdles. Traditional supply chains are encumbered by entrenched, legacy architectures that impede agile innovation and technology implementation at scale.

Trailblazers like Amazon exemplify the future state, seamlessly integrating end-to-end monitoring and digital capabilities into their logistics operations. Yet, Anna Green acknowledges that most incumbent firms lag far behind such pioneering leaders in realizing technology's transformative potential within their operations.

As senior leaders navigate technological upheavals and demographic shifts, Anna Green's perspective underscores the urgency of embracing digital transformation. Success will hinge on overhauling antiquated systems, fostering an innovation mindset, and forming strategic partnerships to access cutting-edge supply chain capabilities. Failing to adapt risks obsolescence in a rapidly evolving landscape where consumer needs, fulfillment channels, and underpinning technologies are being revolutionized. At the same time, business leaders must skillfully navigate the intricate web of regulatory environments across Asian markets to ensure the safe and effective implementation of these digital healthcare innovations.

Navigating Regulatory Complexities and Digital Transformation

The Rise of Digital Healthcare Platforms

Digital healthcare platforms are catalyzing transformative changes in patient care and medical service delivery, enabling seamless access to consultations and prescriptions while driving productivity gains. However, the regulatory landscape across markets like Vietnam, as Caitlin Nguyen illustrated, presents a formidable challenge to their widespread adoption:

“In Vietnam, Rx and over-the-counter medicines may not be sold online - that's a legal topic. However, companies and pharmacy chains have been quite resourceful and innovative in finding a different way to meet consumer expectations for convenience and frictionless prescription fulfillment.” - Caitlin Nguyen

She explained how they've leveraged technology platforms to provide an offline experience that still captures the benefits of digital enablement. "It's not an online business per se, but fueled and enabled by the online. We can't report it as e-commerce sales, but we may report it as telesales - a regulatory workaround, more of which we look forward to in the future."

The Need for Balanced Regulatory Frameworks

Businesses are pioneering such creative strategies to adhere to constraints while meeting consumer demands, underscoring the need for adaptive approaches amidst regulatory complexities in Asia's rapidly evolving digital healthcare landscape.

Amidst intensifying geopolitical frictions and the rise of protectionist policies, senior business leaders are tasked with charting a steady course through a regulatory landscape of escalating complexity. While national governments may publicly project hardline stances, the commercial imperative to sustain global trade flows often necessitates more nuanced approaches leveraging intermediaries and jurisdictional gray areas.

However, according to Anna Green, a formidable challenge looms in the form of stringent new compliance regimes and sustainability reporting mandates, spearheaded by the European Union.

“Although what I find interesting now in terms of the world environment is the fact that regulations and compliance is really going to start to bite. It's biting now in Europe, it will be even more so if you're thinking about manufacturing. ” - Anna Green

Comprehensive disclosure requirements encompassing Scope 1, 2, and 3 emissions across entire corporate value chains have been institutionalized, carrying consequences for firms unable to rigorously trace and verify the environmental footprint of their products and operations. For enterprises with a substantial Asian manufacturing presence in emissions-intensive sectors, these eco-governance edicts pose a call to action on having a perspective and being able to assure governments on compliance requirements, particularly in Europe. Failure to align sourcing, production, logistics, and distribution with escalating sustainability criteria could culminate in punitive restrictions, reputational damage, and ultimately, loss of market access in key economic blocs.

To foster an environment conducive to innovation while ensuring patient safety and compliance, panelists Caitlin Nguyen and Anna Green stressed the criticality of establishing balanced regulatory frameworks. As the global regulatory paradigm pivots toward sustainability as a decisive battleground, senior executives must exhibit judicious foresight and operational agility so as to deftly navigate trade barriers while earning stakeholder trust.

Currency Dynamics and the Future of Global Trade

The Enduring Dominance of the US Dollar

Despite heightened geopolitical tensions, the US dollar remains the preeminent currency in global trade and finance, buoyed by its liquidity and widespread acceptance. However, Sam Ahmed warned against complacency:

“Everyone naturally defaults to this argument that because of geopolitical conflicts, we'll see a move away from the US dollar. But honestly, we haven't seen that in the data - the dollar is so predominant, liquid, and acceptable everywhere.” - Sam Ahmed

The crux lies in how the dollar is wielded as a geopolitical tool. Sam Ahmed cautioned, that a concerning unilateral use of financial sanctions and the increasingly punitive deployment of the dollar as a weaponized currency may lead an undesirable outcome. Should nations or entities perceive these sanctions as unfairly imposed, they may lose faith in the dollar's impartiality as the world's reserve currency and seek alternative means of exchange.

Sam Ahmed highlights that signs of this shift are already emerging in the banking industry. An emerging trend has caught the attention of economic observers - when engaging in trade between some nations in the Middle East, and Chinese entities, there have been instances where a pronounced preference for structuring transactions using third-party currencies have been cited. This deliberate sidestepping of the U.S. dollar as the conventional medium of exchange could well represent a strategic pivot motivated by heightened concerns over potential sanctions.

The Emerging Role of Cryptocurrencies

The panel, including Sam Ahmed's perspective, also explored the growing interest in cryptocurrencies as potential alternatives to traditional fiat currencies like the US dollar. As Sam Ahmed pointed out:

“We're seeing slight spikes in crypto prices correlated to geo political events. For example, when Russia invaded Ukraine and ensuing sanctions were imposed, there was an immediate move to cryptocurrencies by Russian entities.” - Sam Ahmed

He noted how regulators have cracked down on centralized crypto exchanges while the decentralized landscape remains more difficult to control. Sam Ahmed posited that "What the world wants is a neutral medium of exchange. US policymakers need to really think about whether we offer the US dollar as that neutral medium or as a tool for compliance."

Despite these escalating frictions, Sam Ahmed acknowledged the dollar's continued dominance, stating, there hasn’t been a drop in dollar usage thus far except in small pockets such as in commodities and energy. However, the US needs to pay attention to newer cross border payment platforms that are being unrolled without the use of the USD as an intermediary currency.

While cryptocurrencies present novel opportunities, the lack of a cohesive global regulatory framework poses challenges for their seamless integration into mainstream financial systems. As geopolitical rifts widen, businesses must stay attuned to the evolving cryptocurrency landscape and its implications for international trade and finance.

Conclusion

The insights gleaned from this expert panel featuring Caitlin Nguyen, Sam Ahmed, and Anna Green underscore the immense potential and complexities inherent in navigating Asian economies. By embracing long-term strategic planning, capitalizing on technological innovations, and deftly maneuvering geopolitical dynamics, senior leaders can position their organizations to thrive.

This paper serves as a strategic resource, equipping decision-makers with perspectives to unlock sustainable growth and fortify their competitive advantage in Asia.

Many thanks to the Tigerhall Thinkfluencer panelists and moderator for their time and thoughtful insights.

Key Insights

• Escalating US-China tensions have catalyzed economic opportunities for Southeast Asian nations by disrupting established supply chains and prompting organic growth.
• China's strategic economic imprint, driven by long-term planning and substantial infrastructure investments like the Belt and Road Initiative, is redefining Southeast Asia's role in the global economy.
• China leverages "soft power" through strategic investments in Southeast Asia, fostering long-term economic ties and regional influence.
• Demographic shifts like aging populations are disrupting traditional business models, necessitating innovative solutions like telehealth platforms and remote healthcare services tailored to the "silver tsunami."
• While escalating geopolitical frictions persist, the US dollar remains dominant in global trade and finance, though its continued use as an economic weapon could accelerate the pursuit of alternative currencies and financial systems.
• Cryptocurrencies present novel opportunities but lack a cohesive global regulatory framework, posing challenges for seamless integration into mainstream financial systems.
• Navigating complex regulatory environments across Asian markets is crucial for the safe and effective implementation of digital healthcare innovations and sustainable business practices.
• Embracing digital transformation, overhauling antiquated systems, fostering an innovation mindset, and forming strategic partnerships are vital for organizations to adapt to rapidly evolving consumer needs and technologies.
• Establishing balanced regulatory frameworks that foster innovation while ensuring patient safety and compliance is critical in the rapidly evolving digital healthcare landscape.
• Long-term strategic planning, technological innovation, and deft navigation of geopolitical dynamics are critical for unlocking sustainable growth in Asian economies.

Resources for Further Exploration

Council on Foreign Relations. (2023). The Belt & Road Initiative. https://www.cfr.org/backgrounder/chinas-massive-belt-and-road-initiative

World Economic Forum. (2023). The Belt & Road Initiative. https://www.weforum.org/agenda/2023/11/china-belt-road-initiative-trade-bri-silk-road/

World Health Organisation. (2022). Ageing & Health. https://www.who.int/news-room/fact-sheets/detail/ageing-and-health#:~:text=The%20pace%20of%20population%20ageing,from%2012%25%20to%2022%25.

United Nations, Department of Economic and Social Affairs. (2020). World Population Ageing Report Highlights. https://www.un.org/development/desa/pd/sites/www.un.org.development.desa.pd/files/undesa_pd-2020_world_population_ageing_highlights.pdf

National Library of Medicine, US Government. (2019). Digital Healthcare in Vietnam. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6880519/

National Population and Talent Division. (2023). Ageing Population in Singapore. https://www.population.gov.sg/our-population/population-trends/overview/

Vanguard Expert Insight. (2024). US Dollar Dominance. https://corporate.vanguard.com/content/corporatesite/us/en/corp/articles/why-us-dollar-remains-reserve-currency-leader.html

Chainalysis. (2022). Spikes in Cryptocurrency Markets. https://www.chainalysis.com/blog/eastern-europe-cryptocurrency-geography-report-2022-preview/