China, ‘Asia 1.2 wave’ will be engines of growth: KPMG analysts

29 July 2013 22:25  [Source: ICIS news]

HOUSTON (ICIS)--While China rightfully remains an area of focus for global chemical producers, companies should be prepared for the “Asia 1.2 wave of growth”, analysts with global auditing firm KPMG said on Monday.

Much has been made of the Chinese government working to cool down its economy, with Q2 GDP recently clocking in at 7.5%, the lowest figure in four years. China is targeting a full-year GDP growth target of 7.5%. That would be lower than 2012’s 7.8% expansion, which was the lowest number in 13 years.

Mike Shannon, global leader of chemicals and performance technologies practice for KPMG, said the Chinese economy’s deceleration should not be viewed as the beginning of the end for making business in-roads in the country.

“I don’t think the engine is drying up,” Shannon said in a telephone interview.

The analyst sees China as an economy that has grown past the need for the cheapest commodity chemicals possible.

“The market is starting to see more specialty products take hold,” he said. “If you have a higher value product, companies now are more willing to pay for that.”

And when it comes to making specialty chemicals for the Chinese market, Western producers have the advantage there, he added.

Fellow analyst Paul Harnick, KPMG’s global chief operating officer for the company’s chemicals and performance technologies practice, offered that many companies are “almost too focused on China” and pointed to what he deemed the forthcoming “Asia 1.2 wave of growth”.

Harnick sees countries such as the Philippines, Malaysia and Indonesia as burgeoning hotspots for economic growth.

Shannon agreed, but maintained that China remains the clear-cut leader in Asian growth.

“It’s still the main region of growth,” he said.

By: Jeremy Pafford
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