Doing Business In Asia & Pacific Rim

The economy of Asia comprises more than 4 billion people (60% of the world population), living in 46 different states. In addition to this, there are six further states that lie partly in Asia, but are considered to belong to another region economically and politically.
 
As in all world regions, the wealth of Asia differs widely between, and within, states. This is due to its vast size, meaning a huge range of differing cultures, environments, historical ties and government systems. The largest economies in Asia in terms of nominal GDP are Japan and China. This demonstrates the huge disparity in wealth in Asia, with Japan being the world's second largest economy by nominal GDP, and Cambodia being one of the poorest.
 
In terms of GDP by purchasing power parity however, China has the largest economy in Asia and the second largest economy in the world, followed by Japan and India as the world's third and fourth largest economies respectively. South Korea also has one of the largest economies in Asia and the 11th largest in the world by nominal GDP.
 
Asia faces severe disparities, which is a source of major tension in the region. While "East Asian Tigers" such as China, South Korea, Japan, Taiwan (ROC), India, and Singapore keep powering their way through, and Indonesia, Malaysia, Thailand, the Philippines, and Vietnam have entered the path to long-term growth, there are regions right next to these countries that are in need of severe assistance.
 
Given the large number cheap and amply available labor in the region, particularly in China and India, where their large workforce gives them an economical advantage over other countries, the rising standard of living in these countries will eventually lead to a slow-down. Asia is also riddled with political problems that threaten not just the economies, but also the general stability of the region and world. The nuclear neighbors - China and India constantly pose a threat to each other, causing their governments to heavily invest in military spending. The Korean peninsula is also a very volatile area. Currently, North Korea is developing a nuclear weapons program, which poses a major threat to its neighbors, particularly South Korea and Japan, and to US military forces stationed in South Korea.

Military intervention by the United States in Afghanistan and Iraq has also fanned the flames of the extremism and resulted in several terrorist attacks in a number of Asian countries. Another impending crisis is the running out of oil reserves in Arabia region. Most of these economies have traditionally been over-dependent on oil and are finding hard to establish another pillar in their economy.
 
The economy of Oceania comprises more than 14 separate countries and their associated economies. On a total scale the region has approximately 35,834,670 inhabitants who are spread among 30,000 islands in the South Pacific bordered between Asia and the Americas. This region has a diverse mix of economies from the highly developed and globally competitive financial markets of Australia (1st) and New Zealand (2nd) boasting parity with much of Western Europe, to the much less developed economies that belong to many of their island neighbours.  Many of the smaller Pacific nations rely on trade with Australia, New Zealand and the United States for exporting goods and for accessing other products.  Australia and New Zealand's trading arrangements are known as Closer Economic Relations. Australia and New Zealand, along with other countries, are members of Asia-Pacific Economic Cooperation (APEC) and the East Asia Summit (EAS), which may become trade blocs in the future particularly EAS.

Yet another potential danger posed by the economy of Asia to the rest of the world is the growing accumulation of foreign exchange reserves. The countries with the largest foreign reserves are mostly in Asia - China ( Mainland $988 billion, Hong Kong $130 billion, September 2006), Japan ($881 billion, September 2006), Taiwan ($261 billion, September 2006), Singapore ($129 billion, June 2005), the Republic of Korea ($228 billion, September 2006), India ($200 billion, April 2007). This increasingly means that the interchangeability of the Euro, USD, and GBP are heavily influenced by Asian central banks. Some economists in the western countries see this as a bad thing, prompting their respective governments to take action.

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