Asia CEOs face geopolitics as region drives 60% of global growth
Asia drives 60% of global growth, the IMF says, but Fortune commentary says CEOs must redesign operations for geopolitical shocks.
By Maya Lindqvist · Senior Technology Correspondent
3 min read
Asia CEOs geopolitics has become a core business issue as the region remains a central engine of world growth. The IMF says Asia accounts for 60% of global growth, while a Fortune commentary argues that executives in the region must build companies that can withstand trade disputes, energy shocks and political fragmentation.
The commentary points to a business climate shaped by tariffs, trade conflicts and disruptions around the Strait of Hormuz. It says Asian companies still benefit from demographic scale, manufacturing depth and technological capacity, but those strengths now sit alongside risks from fuel prices, power shortages, grid instability and government controls over key technologies.
How can Asia CEOs stay competitive?
Fortune's commentary says chief executives in Asia-Pacific should stop treating volatility as a short-term problem and redesign their organizations around it. The recommended response centers on three areas: operating across more than one market, using a broader set of Asian capital sources and building geopolitical risk management into corporate decisions.
On operations, the commentary says Asia's manufacturing base gives regional firms speed and scale, helped by supplier networks, cost advantages and skilled labor. It also says many companies have become too closely tuned to one domestic market, leaving them exposed when regulation, supply chains or customer demand shift abruptly.
One response cited is the China+1 strategy. That means keeping China as an important production base while adding manufacturing capacity in another country to reduce exposure to tariffs, policy changes or other disruptions tied to a single market.
The commentary says companies can place advanced manufacturing and high-value components where capabilities are strongest, including Mainland China, Japan, South Korea and Taiwan. It says labor-intensive assembly can be spread across ASEAN countries, while final market adaptation can grow in India and other expanding markets.
Fortune's commentary also says corporate funding in Asia has changed. It says large North American private equity funds once led many of the region's biggest transactions, while sovereign wealth funds, domestic institutions and Asian companies now finance manufacturing, infrastructure and technology on a larger scale than before.
That shift gives executives more funding choices, according to the commentary. It says intraregional mergers have become a more practical way to gain scale, though companies must avoid weakening lender and investor relationships by spreading their funding ties too widely.
On risk management, the commentary says companies should track policy, trade and security developments as part of regular decision-making. It uses energy as an example, saying CEOs should treat power supply as a strategic policy issue and use long-term contracts, varied energy sources and backup capacity where needed.
The broader recommendation is to favor adaptability over maximum efficiency. Fortune's commentary says Asian companies that reassess supply chains, capital structures and market access may be better positioned as governments, trade blocs and security concerns play a larger role in business decisions.
This story draws on original reporting from Fortune.