Asian spending boom waits for New Zealand exporters

Asian households will spend an extra $US600 billion ($1.52 trillion) on goods and services by 2008, providing a huge and growing market for New Zealand exporters.

Asian Demographics managing director Dr Clint Laurent told an Asia 2000 seminar in Auckland that most Asian economies were expected to grow by between 3 and 7 per cent a year for the next decade.

By 2008, Asian households would be spending an extra $600 billion on goods and services a year, an increase from $2390 billion now. China, Korea, Japan and Taiwan would account for 83 per cent of the increase.

Though Japan's economic growth was slower than the other Asian economies, its already wealthy population meant it still had the greatest spending power, followed by Hong Kong, Singapore, Taiwan and South Korea. Those four all had average household income of more than $US30,000 ($76,239) and were expecting medium to high growth.

"Japan's older, affluent population is concerned about the quality of their lifestyle and also the prospect of retirement," Dr Laurent said. "They spend more on travel and entertainment, but are also interested in their health and their financial and retirement security.

"In the other more affluent [Asian] economies, the growth area is with middle-aged consumers who are better off, well educated and have significant discretionary income. These people are looking for better-quality products and are upgrading their homes," he said.

There was also a growing number of "empty nester" households, where children had left or were leaving home. Their parents were at the high-point of their earning capacity, with fewer financial commitments, and so had greater spending power.

"In the less developed economies - China, Thailand, the Philippines and Malaysia - the growth area is young adults who are better educated than their parents and have more money to spend. These people are generally aged between 25 and 39 and are forming new households. They want good-quality products but are also receptive to anything new," Dr Laurent said.

Asia's growing urban population, particularly in China and India, was expected to increase by 50 per cent over the next 20 years, he said.

"This is equal to 25 million additional urban dwellers each year and will lead to increased demand for infrastructure such as housing, transport and communication."

Asia 2000 executive director Tim Groser said the 1996 Asian economic crisis resulted in New Zealand exporters viewing the Asian economies as high-risk.

"In some cases this perception has remained, despite the recovery," he said.

"Exports to Asia overall were already on a slight downward trend before the crisis, and since late 1997 have recovered to beyond pre-crisis levels."

Asia 2000 aims to raise understanding of Asia.

- NZPA