10 Key Facts about Asia Pacific Every Business Manager Should Know

1. Asia Pacific region geography – the implication on distance and

travel times

Distances and travel times have a more significant impact than many realize. From
Karachi in the west to Wellington in the east the Asia Pacific region has a time zone
variance of up to 7 hours, and the travel distances and time to cover the region are
significant. It’s an 8-10 hour flight to and from Australia’s largest cities of Sydney and
Melbourne to Tokyo, Shanghai, or Bangkok. From the northern and eastern cities of
Tokyo, Seoul, Shanghai or Beijing it can be 10 hours or longer to Mumbai or New Delhi,
and completing the triangle from India to Australia commonly takes twice that time with
a stopover somewhere.

Even for a business person located within the region somewhere more central like
Singapore, Hong Kong or Bangkok travel times and distances impact to a much greater
extent than executives responsible for other regions.

2. Asia Pacific region diversity – no common culture

There is no common “Asian” culture or approach to business. The Asia Pacific region
consists of many, widely diverse cultures with long histories and very little in common
between them. This is reflected in many different ways, including in business.

While there may be some overt similarities in the way some things are valued (such as
education and personal relationships), it is a fundamental error to think there is any such
thing as a common “Asian” culture, or that what you have learned as being appropriate in
one part of the region is automatically the same elsewhere.


3. Asia Pacific region diversity – no common language

There is no common language across the region, other than English. Although Mandarin
(China’s official language) is spoken by many people in Greater China and of Chinese
heritage, it is a language not commonly used elsewhere in the region. Although they are
the same in written form, there are many different spoken dialects in China, and a critical
thing to remember is that character-based languages like Chinese require double-byte
character capacity in software.
Not only do languages differ across the region, the entire alphabet and writing style
differs between, for example, Hindi, Thai, Japanese and Korean. English is without doubt
the most common unifying language and is increasingly well studied and used, especially
in business. However language still presents a major impediment to many, and is an
additional layer of complexity.

4. Asia Pacific cultures and history – deep, diverse and proud


Asian cultures have long, proud histories. Modern China sees itself as the result of 3,000
years of unbroken civilization and culture. South Asia has a proud history of the glories
of past empires and civilization stretching back to Alexander the Great and earlier. Marco
Polo traversed the Silk Road of Central Asia to be amazed at the sophisticated technology
he discovered.

The Khmer civilization that built the amazing Angkor Wat complex flourished while
Europe languished in the Dark Ages. Japan has a proud history and reveres the Shogun
tradition that unified the country. Many Asian cultures have a sense of being anchored in
the past to a greater extent than many, especially those of the New World, and are
sometimes bemused with western perspectives of history that overlook these facts.

Not being able to recite the English monarchs in order from 1600 to today, or to know the
names of all who signed the US Declaration of Independence isn’t really a big deal in
most of Asia. Understanding of, and respect for the history and sense of destiny of many
Asian cultures is very helpful.

5. Asia Pacific region diversity – religious diversity

There is amazing religious diversity across the region. Asia is home to the country with
the world’s largest Mulsim population – Indonesia, and that faith is dominant in such
places as Pakistan and Bangladesh. Much of South East Asia is predominantly Buddhist
and that faith is also widely practiced through China and Japan, while in India Hinduism
and Sikhism are followed by the majority.

China’s most widespread religions are Confucianism and Taoism, while Shinto is
practiced in Japan. Christianity dominates in the Philippines and is the most commonly
practiced religion in South Korea. This all adds to the rich diversity across the region but
also can be the basis of discord, the most notable being the tension between India and
Pakistan which has its basis in religious differences.

6. Things really do work differently

Don’t make assumptions … things work differently in Asia! Between Western cultures
and Asian, and from one Asian market to another, you cannot make assumptions that
things operate the same way, or that the desires and motivations are the same.

This extends from bureaucratic processes to the way that countries and businesses are
run, and how people expect them to act and operate. It extends from the way legal
agreements are viewed, to what is meant by the simple words “yes” and “no”, through to
fundamental views on what is right and wrong, or what is acceptable and not acceptable
in business.

The best advice you can have is don’t assume anything.

7. Asia Pacific region demography – understanding this is key

Demographic trends are key to understanding the region’s future. While this is a complex
issue, the key point is that fertility (the birth rate) is generally falling, and life expectancy
is generally rising. With fewer people being born and people living longer, the average
age of the population is increasing, with very significant implications on the economy as
a result.

This trend started several decades ago in Japan, which is now starting to experience the
implications of fewer people in the work force supporting more who are in retirement,
and the nations of China and South Korea can already see this will become a real issue
over the next few decades.

The same trends are starting to become evident in other countries however it’s likely to
be mid century before this is seen as a major issue. Although the birth rate is falling,
much of South and South East Asia is a very young population, and in many parts of the
region more than half the entire population is under the age of 25.

8. Asia Pacific region economics and consumer behaviour – rising

incomes, early adoption
Per capita income is rising and with that consumerism … markets are vibrant, dynamic,
growing and are early adopters of new technology. The size and growth rates of
consumer markets are astonishing across the region and show little sign of abating. More
new cars are now sold in China than in the USA, and Chinese consumers buy roughly
half the world’s new smartphones. Not surprising, considering there are 500 million
Chinese between 5-19, and they currently own 250 million mobile handsets. Across the
region consumers are hungry for the latest new technology.

9. Asian nations and cultures don’t always get along

Asia is not one big, happy family – there is significant discord within and between
markets. Areas of significant regional tension exist – such as between India and Pakistan,
North and South Korea. Internal dissent has sparked periods of trouble in Thailand; China
is not immune; and the memories of the riots in Indonesia targeting the ethnic Chinese
population are still raw. Violence erupts regularly between Muslim and Christian groups
in Indonesia; a state of insurrection exists in the south of the Philippines; etc.

It’s also interesting to be aware that there are often many tensions within countries or
cultures that can pass unnoticed – for example significant rivalry between Beijing and
Shanghai’s political elite, and it’s suggested that mainland Chinese occasionally view
their cousins from other parts of the region the way Parisians view the Quebecoise (or so
it is said)!

And historically Asia has experienced the bleak conditions of genocide – for example
Genghis Khan and the Mongol Empire; and in the 20th century the Killing Fields of
Cambodia and Japan’s disgraceful and shameful behaviour in China and South East Asia
during the 1930's and early 1940's – made all the more reprehensible by the
unwillingness of the Japanese state to show any real repentance or acknowledge a dark
stain upon that nation's recent past.

10. Australia and New Zealand unsure about joining the party


Australia and New Zealand are not sure how committed they are to joining the party –
which partially stems from the obvious fact that it’s not clear if they are invited, and
however you play it, they will be the ‘different’ ones – like if Kenya and Zambia joined
the European Community.

There is so much about Australia and New Zealand that clearly differentiates these two
countries from the rest of Asia; and yet their geographic proximity and increasing
integration with the rest of Asia are also powerful arguments they should be seen as part
of the region. Growing levels of Asian investment, immigration, and education in these
countries along with growing dependence on commodity exports to Asia make additional
arguments in favor of their inclusion, and this is likely to be a continuing trend.

12 Asian Geopolitical Trends and Events From 2016 That'll Matter in 2017

North Korea tests multiple nuclear devices and 30-some ballistic missiles.

2016 marked the first year to see multiple nuclear tests in North Korea — one in January and one
in September (both claimed to be of thermonuclear devices by Pyongyang). Similarly, we saw an
unprecedented level of missile testing, particularly of North Korea’s intermediate-range delivery
systems, including the Nodong, the KN-11 submarine-launched ballistic missile, and Hwasong-
10 (Musudan) missiles. Furthermore, North Korea tested nose cones for atmospheric reentry,
new solid fuel propulsion for its missiles, and launched a satellite launch vehicle in February.
The message coming from North Korea all year has been clear: It’s march toward realizing an
operational and reliable nuclear deterrent is progressing steadily. With every nuclear and missile
test this year, Pyongyang acquired important know-how. Denuclearization, though still the goal
of U.S. policy toward North Korea, appears increasingly unrealistic; with a new administration in
Washington, the conversation may shift more explicitly toward containment.

Cold winds across the Taiwan Strait

Tensions across the Taiwan Strait picked up attention in recent weeks, given the unprecedented
phone call between Trump and Taiwanese President Tsai Ing-wen, but 2016 marked an
important year of change in the Taiwan Strait. The inauguration of an independence-leaning
Democratic Progressive Party government in May led to a temporary freeze in cross-strait
communications; Beijing suspended cross-strait contact after expressing its dissatisfaction with
Tsai’s treatment of the so-called “1992 consensus” between the two Chinas. The Taiwan Strait
will be worth watching closely as a potential tinderbox, especially given that the incoming U.S.
administration appears to be less inhibited than its predecessors in enthusiastically reaching out
to Taiwan.

International law hits China over the South China Sea

On July 12, 2016, a five-judge tribunal at the Permanent Court of Arbitration in The Hague
issued a long-anticipated verdict in a case filed originally in 2013 by the Philippines against
China. The tribunal ruled overwhelmingly in Manila’s favor on nearly all counts, marking the
first major defeat before international law for China in the realm of maritime affairs. Most
significantly, the tribunal found that China’s nebulous nine-dash line claim in the South China
Sea had no basis in international law. Though the ruling bore out no real consequences for
Beijing’s activities in the area, it will stand tall as a landmark decision in international law — the
first of its kind amid the labyrinthine disputes over islands, rocks, and reefs in the South China
Sea

East, South China Seas continue to simmer.

Both the East China Sea and the South China Sea have seen considerable activity this year.
China, in particular, has been energetic in testing disputed waters in both areas with its coast
guard and navy. In the East China Sea, we witnessed an uptick in activity beginning in the
summer, with the Senkaku/Diaoyu Islands reemerging as a flashpoint after a relative lull in 2015.
In the later months of the year, the Chinese People’s Liberation Army Air Force (PLAAF) and
Navy (PLAN) conducted drills in the Miyako Strait and Bashi Channel, paving the way for
China’s aircraft carrier, the Liaoning, to make its first-ever passage into the Western Pacific via
these critical waterways along the first island chain. Expect to see China send the Liaoning back
to the Western Pacific as its crew acquires important experience and training ahead of Beijing’s
launch a second carrier, which may very possibly occur next year.

In the South China Sea, despite the ruling, we witnessed continued tensions between China and
Southeast Asian claimant states in the Spratly Islands, the Paracel Islands, and around
Scarborough Shoal, which was the original impetus for the Philippines’ 2013 case against China.
Indonesia, a non-claimant, upped the ante against the China over disputed waters in the Natuna
Sea, kicking off a more energetic approach toward maritime security in the South China Sea
from the government of President Joko “Jokowi” Widodo. Finally, satellite imagery late in 2016
demonstrated that China has started emplacing point defense systems on its seven infamous
artificial islands in the Spratly Islands. In 2017, watch for a more assertive China in the South
China Sea.

Rodrigo Duterte pivots away from the United States

One of the reasons that the tribunal’s verdict didn’t have staying power is because the plaintiff
state saw an important change-in-government. The pro-American, internationalist government of
President Benigno Aquino III yielded the Malacañang Palace to the anti-American, populist
Rodrigo Duterte. Duterte, who entered office 12 days before the tribunal’s ruling dropped,
swiftly signaled an intent to smooth things over with China over the South China Sea. Initially
brushed off by some as the fanciful vagaries of an inexperienced populist president, Duterte’s
anti-Americanism has shown remarkable staying power, throwing the future of one of the United
States’ major treaty alliances into question. Furthermore, Manila chairs the Association of
Southeast Asian Nations (ASEAN) in 2017, all but ensuring that Duterte’s whims will continue
to bear on regional geopolitics in the year ahead.

Three Sudden Leadership Changes

Though little would normally connect these three countries, 2016 saw sudden changes at the
highest levels of the state in South Korea, Uzbekistan, and Thailand. In South Korea, President
Park Geun-hye was successfully impeached in December following an influence-peddling
scandal, weeks of massive public protest, and political turmoil. She awaits the review of a
constitutional court before formally departing from the scene; the prime minister governs in the
meantime, with elections likely slated for sooner than the original December 2017 timeline.

In Uzbekistan, Islam Karimov, one of the last remaining Soviet-era strongmen, died on the eve
of the country’s celebration of 25 years of independence. Karimov’s succession initially raised
questions, but Shavkat Mirziyoyev, Karimov’s prime minister, rose to the task. Mirziyoyev is
expected to continue Karimov’s iron-fisted rule, which was marked by kleptocracy, human rights
violations, and a disregard for the rule of law

In Thailand, the world’s longest-reigning monarch, King Bhumibol Adulyadej, died, passing the
throne on to the crown prince, Maha Vajiralongkorn. Thailand, despite being a constitutional
monarchy, will see the crown play an important role in managing civil-military tensions under
the current junta-led government that has been in place since a May 2014 coup. In particular,
2017 may see the exacerbation of tensions between ultra-royalists, who have long disliked the
flamboyant and ostentatious Maha Vajiralongkorn, preferring Princess Chakri Sirindhorn
instead. Though the crown and the ruling junta managed a peaceful royal succession after
Bhumibol’s death in October, there are further concerns within the military that the new king
could be sympathetic to the exiled former democratically elected prime minister, Thaksin
Shinawatra.

India and Pakistan clash over Kashmir

2016 didn’t kick off well for the two South Asian neighbors, with Indian Prime Minister
Narendra Modi’s late-2015 overture to Pakistan via a surprise visit to his Pakistani counterpart’s
hometown quickly scuttled by a terror attack in the first week of January 2016 that India
attributed to Pakistan-based militants. Tensions between the two nuclear-armed neighbors saw an
uptick after Pakistan sensed an opportunity following a summer surge of outrage in the Kashmir
valley after Hizbul Mujahideen leader Burhan Wani was killed by Indian forces. Finally, a
September terror attack — again attributed to militants who had crossed over the Line of Control
separating Indian- and Pakistan-controlled Kashmir — saw the Indian Army endure its greatest
casualty count in a single attack in more than a decade. Heading into the new year, the two
countries show little sign of reconciliation, with India actively pursuing a strategy of isolating
Pakistan internationally and Islamabad continuing to wrangle with differences in priorities
between its democratically elected civilian government and military leadership.

Donald Trump is elected president of the United States.

You saw this one coming. Trump’s election in the United States suggests that Washington’s
long-standing role as a guarantor of the regional security architecture and the post-Second World
War order is under question. With weeks left in the presidential transition, Trump has shown to
prefer a transactional type of bilateral diplomacy that focuses almost entirely on swiftly
observable benefits for the United States. U.S. support for normative principles including human
rights and the rule of law, in addition to principled support for international law, may recede,
presenting an opportunity for regional revisionism by China, the primary great power challenger
to the United States in Asia.

The Trans-Pacific Partnership fails.

This one technically hasn’t formally panned out just yet, but Trump has suggested that cancelling
U.S. support for the controversial 12-country trade deal will be a day one priority for his
administration. TPP’s failure will only serve to put U.S. credibility on the line with Asian
partners and allies, reaffirming fears that Washington’s commitment to normative leadership in
the region is either waning or gone altogether. In TPP’s absence, competing proposals like the
Regional Comprehensive Economic Partnership and the Asia-Pacific Economic Cooperation-led
Free Trade Area of the Asia-Pacific may see more enthusiasm. Though the deals won’t contain
TPP’s heavy focus on high standards for intellectual property, labor, and the environment, they
will nonetheless enable regional integration and prosperity.

Afghanistan teeters, facing an intensified Taliban challenge.

2016 was not the year that many in Afghanistan’s government would have hoped for. With a
second close call in losing the important provincial capital of Kunduz to the Taliban, in addition
to a dangerously close skirmish over Lashkar Gah in Helmand Province, the Afghan government
managed to hold on to major urban hubs, while nonetheless conceding more remote territory to
the militant group. The Taliban suffered important blows. In particular, a U.S. drone strike
succeeded in killing Mullah Akhtar Mohammed Mansour in Pakistan’s Balochistan province in
May 2016, leading to the group’s second leadership transition in two years. Outside of the
Taliban, Afghanistan’s economy continues to struggle with unemployment and non-foreign-aid-
based growth. A controversial peace deal with Gulbuddin Hekmatyar’s Hezb-e-Islami armed
group has been pitched as a victory for the cause of reconciliation in the country, but its long-
term viability remains to be seen.

Myanmar’s Rakhine state burns.

The final months of 2016 may foreshadow a turning point in the situation along the Myanmar-
Bangladesh frontier and in Myanmar’s Rakhine State, where the state has long persecuted the
stateless Rohingya people. State-backed violence in the area has intensified in the final months
of 2016, leading to massive internal displacement. Observers have noted that retribution attacks
on Myanmar Border Guard Police in Rakhine state suggest that a new insurgency may be taking
root, led by overseas-based Rohingya. Aung San Suu Kyi and the National League for
Democracy have enjoyed more than a year in power since the historic 2015 elections, with little
sign of interest in a sustainable and serious solution for the challenges in this region that consider
the plight of the Rohingya.

Abe and Putin make nice.

In May 2016, Japanese Prime Minister Shinzo Abe traveled to Sochi, Russia, for a summit with
Russian President Vladimir Putin. That meeting marked the start of a new Japanese approach
toward Russia, picking up on momentum that had been lost in early 2014 after Japan had no
choice but to participate in Western sanctions against Moscow in the aftermath of its annexation
of Crimea from Ukraine. Abe’s efforts culminated in a major summit between the two leaders
just weeks ago. To his disappointment, there were no serious concessions from Russia on the
issue of the Kuril Islands — a lingering territorial dispute between the two countries from the
end of World War II. Instead, Japan agreed to a range of economic agreements with Moscow. As
Putin left, however, there were signs that the Tokyo-Moscow rapprochement kicked off this year
was setting the stage for more to come in 2017. Keep an eye on how this relationship will take
shape, particularly given the eleventh-hour sanctions announced by the Obama administration
against Russia for its hacking of U.S. groups during the election. Abe might find himself either
once again boxed in by Japan’s long-standing alliance with the United States, or may see Trump
give Japan a free hand to pursue more energetic diplomacy with Russia. (The context underlying
the rapprochement includes Japanese fears of an ever-closer Russia-China entente.)