Peter T.S. Wong, HSBC's Chief Executive for Asia Pacific, was in India recently on a whistlestop business tour. In a candid interview with BT's Rajiv Bhuva, Wong shared his views on the European crisis and how Asia is getting economically stronger. Excerpts:
On Asia's Bright Prospects: Asian countries like India and China are emerging as economic powerhouses largely due to the burgeoning interregional trade. For instance, trade between India and China has grown substantially over the last few years.
Normally, during a financial crisis, commodity prices tend to go down. But, because of unabated buying of commodities by China and India to keep their growth engines whirring, the prices remained stable. As a result, commodities-dependent economies like Malaysia, Indonesia and Australia have gone through the financial crisis as if nothing has happened.
This has raised the growth platform for Asia: With more trade, people will get more wealth which in turn will promote domestic consumption.
On Europe vs US: Europe has learnt quite a bit from the US experience. You can see that the rescue package has come together very quickly. Growth in Europe will level-off a bit because of the current situation. But I do not believe that there will be a big dip. If the rescue package had been delayed any further, then the economic downturn would have been prolonged. And it would have affected Asia much more.
But now the relative damage would be much less. In fact, for Asia's sustained recovery it is important that the US recovers faster. Exports to the US have been rising, and whatever trade has come down in Europe will get diverted to the US.
On India Plans: We are placing a lot of importance on India and it is one of the engines which will drive our growth in Asia-Pacific. We have set some longterm goals in India in terms of our size and market share. Our immediate target is to take earnings to a billion dollars from $374 million in 2009. We aim to achieve this in the next four years.
As far as listing on the Indian stock exchanges goes, we will consider all options. We are watching (the IDR of) Standard Chartered with a lot of interest. India is important for us, and if regulations are relaxed, we would consider all options of growth, including inorganic.