News / Asia

    Asian Sales Propel Profits for Large Multinational Corporations

    As large multinational corporations have reported their second quarter results in recent weeks, a trend is emerging - many are relying on Asia for growth.

    Michael Geoghegan, the chief executive officer for the global bank HSBC, moved to Hong Kong from the bank's headquarters in London earlier this year. In announcing the bank's second quarter earnings of $6.8 billion recently, Geoghegan underscored the importance of that shift.

    "Asia remains the bedrock of profitability," he said. "It is in Asia that we are seeing the greatest opportunity for growth."

    HSBC's Hong Kong operations saw profit rise 13 percent, while earnings from the rest of Asia climbed 36 percent.

    At Standard Chartered Bank, 73 percent of its $3.12 billion profit in the second quarter came from Asia. Profit from the Americas, Britain and Europe accounted for only four percent.

    Where the action is

    Akzo Nobel, the world's largest paint and coatings supplier, reported that Asian sales, which account for 20 percent of global revenue, helped its second quarter profit leap 76 percent from last year to $351 million.

    "We are where the action is and where the action could be," said Hans Wijers, the chief executive of the Dutch company.

    The International Monetary Fund forecasts that China's economy will expand by more than 10 percent and India's by over 9 percent this year. In comparison, the U.S. is only expected to grow at 3.3 percent, and Europe at 1 percent.

    With demand in the U.S. and Europe still weak after the global financial crisis, Asia's growing population, rising middle class and strong investment spending offer strong potential growth for multinational companies.

    Expanding market

    U.S. consumer products giant Procter and Gamble plans to work with the Chinese government to bring its distribution network to 10,000 villages. Chief Executive Officer Bob McDonald described the plan to financial analysts recently.

    "We expand the distribution of our products in the rural areas of China to reach more Chinese consumers and to create economies where economies never existed," said McDonald. "As we do that, that obviously creates more people to use our products and helps us get to the five billion consumers that we targeted over the next five years, in the four years now remaining."

    Geoghegan at HSBC counts on the growing ranks of Asian millionaires and the overseas expansion of Chinese companies to help raise the bank's revenue.

    "Mainland Chinese companies expanding overseas accounted for around half of the new growth in commercial customers in Hong Kong," he said. "And we have also captured increasing flows of trade between China and Latin America."

    However, some multinational companies are cautious, including German luxury car maker BMW. Its sales in Asia jumped 59 percent in the second quarter this year, and most of the gain was in China.

    But BMW executives say they do not want to "become dependent on the Chinese market" and want to strengthen the company's U.S. business.

    And some Asian ventures have fallen short of expectations. French supermarket retailer Carrefour, which opened stores in Southeast Asia and China in the late 1990s, is reportedly selling its business in Southeast Asia, to concentrate on China and India.

    You May Like

    Russian-speaking Muslim Exiles Fear Possible Russia-Turkey Thaw

    Exiled from Russia as Islamic radicals and extremists, thousands found asylum in Turkey

    US Presidential Election Ends at Conventions for Territorial Citizens

    Citizens of US territories like Guam or Puerto Rico enjoy participation in US political process but are denied right to vote for president

    UN Syria Envoy: 'Devil Is in the Details' of Russian Aleppo Proposal

    UN uncertain about the possible humanitarian impact of Russian proposal to establish escape corridors in Aleppo

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Uganda Unveils its First Solar-powered Busi
    X
    July 28, 2016 4:16 AM
    A solar-powered bus described by its Ugandan makers as the first in Africa has made its public debut. Kiira Motors' electric bus, Kayoola, displayed recently at a stadium in Uganda's capital. From Kampala, Maurice Magorane filed this report narrated by Salem Solomon.
    Video

    Video Uganda Unveils its First Solar-powered Bus

    A solar-powered bus described by its Ugandan makers as the first in Africa has made its public debut. Kiira Motors' electric bus, Kayoola, displayed recently at a stadium in Uganda's capital. From Kampala, Maurice Magorane filed this report narrated by Salem Solomon.
    Video

    Video Silicon Valley: More Than A Place, It's a Culture

    Silicon Valley is a technology powerhouse and a place that companies such as Google, Facebook and Apple call home. It is a region in northern California that stretches from San Francisco to San Jose. But, more than that, it's known for its startup culture. VOA's Elizabeth Lee went inside one company to find out what it's like to work in a startup.
    Video

    Video Immigrant Delegate Marvels at Democratic Process

    It’s been a bitter and divisive election season – but first time Indian-American delegate Dr. Shashi Gupta headed to the Democratic National Convention with a sense of hope. VOA’s Katherine Gypson followed this immigrant with the love of U.S. politics all the way to Philadelphia.
    Video

    Video Philadelphia Uses DNC Spotlight to Profile Historic Role in Founding of United States

    The slogan of the Democratic National Convention now underway in Philadelphia is “Let’s Make History Again” which recognizes the role the city played in the foundation of the United States in the 18th century. As VOA’s Kane Farabaugh reports, local institutions are opening their doors in an effort to capitalize on the convention spotlight to draw visitors, and to offer more than just a history lesson.
    Video

    Video A Life of Fighting Back: Hillary Clinton Shatters Glass Ceiling

    Hillary Clinton made history Thursday, overcoming personal and political setbacks to become the first woman to win the presidential nomination of a major U.S. political party. If she wins in November, she will go from “first lady” to U.S. Senator from New York, to Secretary of State, to “Madam President.” Polls show Clinton is both beloved and despised. White House Correspondent Cindy Saine takes a look at the life of the woman both supporters and detractors agree is a fighter for the ages.
    Video

    Video Dutch Entrepreneurs Turn Rainwater Into Beer

    June has been recorded as one of the wettest months in more than a century in many parts of Europe. To a group of entrepreneurs in Amsterdam the rain came as a blessing, as they used the extra water to brew beer. Serginho Roosblad has more to the story.
    Video

    Video First Time Delegate’s First Day Frustrations

    With thousands of people filling the streets of Philadelphia, Pennsylvania for the 2016 Democratic National Convention, VOA’s Kane Farabaugh narrowed in on one delegate as she made her first trip to a national party convention. It was a day that was anything but routine for this United States military veteran.
    Video

    Video Commerce Thrives on US-Mexico Border

    At the Democratic Convention in Philadelphia this week, the party’s presumptive presidential nominee, Hillary Clinton, is expected to attack proposals made by her opponent, Republican presidential nominee Donald Trump, to build a wall along the U.S.-Mexico border. Last Friday, President Barack Obama hosted his Mexican counterpart, President Enrique Peña Nieto, to underscore the good relations between the two countries. VOA’s Greg Flakus reports from Tucson.
    Video

    Video Film Helps Save Ethiopian Children Thought to be Cursed

    'Omo Child' looks at effort of African man to stop killings of ‘mingi’ children
    Video

    Video London’s Financial Crown at Risk as Rivals Eye Brexit Opportunities

    By most measures, London rivals New York as the only true global financial center. But Britain’s vote to leave the European Union – so-called ‘Brexit’ – means the city could lose its right to sell services tariff-free across the bloc, risking its position as Europe’s financial headquarters. Already some banks have said they may shift operations to the mainland. Henry Ridgwell reports from London.
    Video

    Video Recycling Lifeline for Lebanon’s Last Glassblowers

    In a small Lebanese coastal town, one family is preserving a craft that stretches back millennia. The art of glass blowing was developed by Phoenicians in the region, and the Khalifehs say they are the only ones keeping the skill alive in Lebanon. But despite teaming up with an eco-entrepreneur and receiving an unexpected boost from the country’s recent trash crisis the future remains uncertain. John Owens reports from Sarafand.
    Video

    Video Migrants Continue to Risk Lives Crossing US Border from Mexico

    In his speech Thursday before the Republican National Convention, the party’s presidential candidate, Donald Trump, reiterated his proposal to build a wall along the U.S.-Mexico border if elected. Polls show a large percentage of Americans support better control of the nation's southwestern border, but as VOA’s Greg Flakus reports from the border town of Nogales in the Mexican state of Sonora, the situation faced by people trying to cross the border is already daunting.

    Special Report

    Adrift The Invisible African Diaspora