Apec CEOs see geopolitical tension as threat to biz growth, survey says
Geopolitical tension such as the one hounding the West Philippine Sea is among the top three concerns which Asia Pacific CEOs consider as threats to business investment and growth, according to the fifth annual Apec CEO survey of PWC.
READ: Economic woes zap optimism of Apec zone CEOs
PWC’s (PricewaterhouseCoopers) latest survey “CEO confidence in Asia Pacific shaken but strong” cites cyber security, natural disaster risks and regional geopolitical tension as among the leading threats to business growth and confidence, PWC Philippines chairman Alexander Cabrera said in a press briefing at the International Media Center for the Apec summit 2015.
PWC is a network of firms in 157 countries with more than 208,000 people.
“Geopolitical tension such as the one persisting in the South China Sea will (have an) impact on investment and decision-making,” Cabrera said.
He said geopolitical tension is just next to the more pressing threats to infrastructure, such as risks due to natural disaster as well as risks to cyber security.
David Wu of PWC China/Hongkong said the West Philippine Sea dispute has an impact on the CEO’s decision-making on allocation of resources.
But the dispute is not so much in the CEO’s minds as to their efforts in alleviating poverty in China, he added.
“The geopolitical is certainly a concern on the minds of CEOs when they’re allocating their resources,” said Wu, who is a partner and regulatory and government leader of PWC China/Hongkong.
“China is actually a very poor country not like you see in Shanghai and Beijing… China is focused more on addressing its own economic issues rather than raising geopolitical issues,” he added.
The PWC surveyed 800 CEOs and industry leaders from all the 21 Apec member economies from June 23 to Aug. 21.
The report said business confidence among the 800 CEO/was also at its lowest since the survey on year-long confidence for Apec CEOs started in 2012.
The report said only 28 percent of business leaders are “very confident” their organization would see revenue growth in the next 12 months, down from 46 percent last year.
Also, 51 percent of business leaders are very confident of business growth in the Philippines for next year, higher than 34 percent confidence on business growth in United States and 20 percent in China.
The report on dampened business confidence was conducted just before the Philippines scored a victory at the UN-backed International Arbitral Tribunal on the West Philippine Sea dispute
The panel unanimously decided that it has jurisdiction over the maritime dispute between China and the Philippines involving parts of the South China Sea (West Philippine Sea).
The decision means that the tribunal, convened under the provisions of the United Nations Convention on the Law of the Sea (Unclos), will hold further hearings to settle the increasingly contentious dispute.
The Philippines claimed that it has full maritime entitlement in the West Philippine Sea, and that China’s nine-dash line is invalid under the Unclos because it overlaps on the country’s exclusive economic zone (EEZ) and extended continental shelf (ECS).
The Unclos is the primary international law that governs maritime disputes on overlapping maritime zones. However, Unclos does not govern territorial disputes, which are sovereignty or ownership issues over land territory.
China has maintained that it would not follow the tribunal’s orders in relation to the case, and that the ruling was null and void because it does not bind China.
China had asserted it has “indisputable sovereignty” and “historic rights” to nearly the entire South China Sea using its “nine-dash line” claim that overlaps with the UNCLOS-mandated 200-nautical-mile Exclusive Economic Zone (EEZ).
Amid the maritime and territorial spat, China has conducted massive land reclamation activities turning submerged reefs into artificial islands capable of hosting military equipment and structures.
Chinese President Xi Jinping is expected to arrive for the Apec in Manila but has asked that the West Philippine Sea dispute not be tackled during the summit. TVJ
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