Boardman International Blog: Insights into APAC – A Must-Know for Finnish Board Members

Boardman International Blog: Insights into APAC – A Must-Know for Finnish Board Members

APAC countries may seem distant to a Finnish board member, both geographically and culturally. If a company aims to expand its operations into APAC countries, then the minimum requirement is that at least one board member understands these countries.

Iñaki Amate is the Chairman of the European Chamber of Commerce in Hong Kong and a Boardman Member.

Expanding business into APAC countries without knowledge of the region is challenging because culturally they are very different to Finland, accessing the right people is not always easy and it takes several iterations and going through several people till you find the right person.

There are also major differences from country to country and even within countries like China that must be taken into account. A board member with experience and a network in APAC will be able to help understanding the landscape, open connections and make considered recommendations.

China and Hong Kong are slowly recovering after Covid

Last year China and Hong Kong, opened to the world after three years of isolation because COVID. While most of the economies experienced a relatively fast recovery in the form of V or U-shaped curves, in this part of the world we have seeing an L-shaped recovery that is slowly starting to curve up.

This long isolation triggered many multinationals relocating part of their production outside China, something that had started already with the trade war between the US and China. A big part of those factories was built in places like Vietnam, Indonesia or even Mexico are of Chinese Capital.

While the rest of the world thought that China was locked down not doing anything, they were upgrading their whole manufacturing into advanced manufacturing with a clear view to move the intense labor manufacturing to third countries. Their aspiration now is to build global brands and they need help to create them and scale them.

Finnish organizations and professionals specialized on designing, branding, or internationalization might have an opportunity.

Chinese Government Introduces New Measures to Simplify the Return of Foreign Companies

In December 2023, I visited the Chinese Central Government and for the first time in 4 years they were clearly asking foreign organizations what do we need to return back to China.

Despite the fact that most of the foreign companies have become a bit more skeptical to entering the Chinese market, the opportunity remains and the Chinese government is constantly introducing measures to ease the process for foreigners to get back, for instance by easing the process to get visas.

In Hong Kong, the government, has also realized that they need to do something to get back foreign companies. For Finnish companies willing to expand into this part of the world OASES, Office for Attracting Strategic Enterprise offers a number of incentives for companies willing to set up their offices here. Invest Hong Kong has also set up a unit to attract foreign family offices with a similar set of incentives.

Hong Kong and China Are Going After International Investors and Talent

Hong Kong, that lost a significant part of the foreign population over the last years, is launching a battery of measures to reboot the economy. While most of the population has passed the 2019 demonstrations and the COVID pages, the sentiment here is that the rest of the world has associated in their mind Hong Kong and China with masks, and a tense socio-economic situation. The image that the media portrays creates a significant distortion.

While Hong Kong has lost a lot of talent to Singapore, both Hong Kong and China are finally waking up and going after international investors and talent to re-build the Asian hub and gateway to China.

Finnish organizations considering entering these markets will need to take into consideration the markets they want to prioritize as well as the type of talent and the pool on those markets. For instance, for maritime and energy industries, Singapore might be a good match, but the costs can be too high compared to neighbor Malaysia.

US elections will be the biggest disruptor in 2024

Here everyone agrees that the US elections will be the biggest disruptor this year and will continue to extend this time of uncertainty. With the war in Ukraine and in the Middle East, looking at Asia might seem like the natural place if you are looking to diversify and de-risk.

While this uncertainty will impact everyone, Finnish organizations might still be perceived as more neutral than others. Also, every country is adopting different strategies, for instance, Indonesia is trying to remain neutral while others might be a bit more polarized towards one geopolitical block or other.

Finnish organizations should take these factors into consideration when exploring and designing their international strategy for this part of the world.

Good sources for the APAC region

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Author

Iñaki Amate is the Chairman of the European Chamber of Commerce in Hong Kong, former Chair of the Finnish Chamber, Partner at EY and Founder of Investment Syndicate seeders&seekers. He was the Managing Director of Fjord in Finland, then sold to Accenture where he continued as Managing Director in Helsinki and served on the board of Finnish companies Vertical and dSign by Vertti & Co. Iñaki is Boardman’s Member based most of the time in Hong Kong but spending some time in Finland. He serves on the board of international organizations and specializes on internationalization and innovation.