Trends 2021

Asia 2021: Set to embrace the next normal with digital spurt

2021 is unlikely to see a thaw in US-China relations, despite a new resident in the White House, and like the rest of the world, Asia's tech industry will be looking for ways to recover from a damaging 2020.

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These are perilous times to be making predictions about the future. The bolt-out-of-the-blue that was COVID-19 rendered many forecasts this time last year almost immediately worthless by March. Governments and businesses in APAC, as in the rest of the world, have spent most of 2020 first in fire-fighting mode, reacting to stem the immediate public health and economic damage from the pandemic. More recently, there’s been a concerted attempt by larger organisations to adapt, and even thrive in the new conditions. This will continue into 2021.

In many ways, APAC is one of the regions best equipped to do so. Many countries such as China, Vietnam and South Korea have seen their public policies pay dividends through declining infection rates and a recovering economy. However, there are two important caveats: Asia Pacific is a huge region with much diversity, making it difficult to draw simple conclusions. There’s also the small matter of US-China relations, which are more than likely to continue in a downward trajectory, even with Joe Biden in the White House.

US-Sino tensions set to continue

There are many officials in both governments who may hope that the Biden era will signify a new thawing of relations with China. After all, as Veep under Barack Obama, Biden pursued a far more conciliatory approach to the Middle Kingdom. However, things have changed a lot since then, with strong bipartisan opposition to China hardening in Congress and among most Americans.

In fact, Biden has already pledged to restrict imports from China deemed a national security threat, and to hit back at any countries that try to undercut US manufacturing using state subsidies, according to The Economist. This would seem to suggest his first term could pick up from where 2020 left off, although with more clarity of messaging and unity of purpose than we’ve seen in the past four years. Expect the US to engage internationally to form a coalition of nations pushing back against Chinese geopolitical bullying, state subsidised tech exports and cyber-espionage.

For those businesses stuck in the middle of the escalating trade war, including many technology firms, this could make for another challenging year ahead. Those with manufacturing plants and suppliers in China may want to continue moving operations out to nearby countries such as Vietnam and Malaysia, that can offer what they’re looking for at the right price. An additional factor is the growing disquiet over China’s treatment of Uyghurs: as Apple found out this year, suppliers may be blacklisted by the US over alleged forced labour abuses.

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