Despite Asian markets falling and redundancies occurring inline with the West, Mercer Investment Consulting has predicted that the Asian economy will continue to grow at 9 per cent this year.
“Asian countries with large domestic markets, such as China, have been trying very hard over the past few years to find ways to boost domestic demand,”Â said Mercer’s human capital business leader in the Asia Pacific, Guo Xin.
China has tried to find ways to diversify its export destinations, and has put together a stimulus package of over RMD 20 trillion, ($US2.9 trillion) to boost its domestic demand since the onset of the global financial crisis.
According to Xin, trade with the US now accounts for only 7 per cent of China’s gross domestic product, and China’s GDP is expected grow at 9 per cent next year.
“China’s external dependency is low,”Â Xin said. “[The] stimulus plan is funded by the country’s savings, and we have political stability.”
But the anticipated growth remains considerably lower than recent years. Xin acknowledged that Asia countries were not immune from the redundancies affecting companies globally.
A recent survey conducted by Mercer found that four out five companies in the region said that their human capital decisions would be affected by the crisis. To what extent, they did not yet know.
Xin said Chinese companies should avoid falling into a “cost cutting frenzy”. “Talent is still in short supply; be creative and hang onto your mission critical staff,”Â he said. “Make surgical, not sweeping cuts to the workforce. Continue to keep an eye on recruiting, retaining, and engaging key talent, these are the ones who can help you tide over this tsunami.”
Xin said companies needed to focus on reducing cost and managing risk; now was the time to check their conviction in the business model. Ã¢â‚¬Å“Invest in retention tools; the talent war will continue.”