Asian companies invest in their businesses amid credit crisis.

• Author: Heffes, Ellen M.
• Position: GLOBAL ECONOMY

Companies in Asia continue to invest in their businesses and report that the credit environment across the region remains more benign than in Europe and the United States, even as the global economy slides towards recession, a new survey by Greenwich Associates reports.

However, Asia's economic prospects remain uncertain. On Oct. 22, the head of the Asian Development Bank reiterated that the region was on track for 7 percent growth in 2009, despite the severe downturn in the U.S. and European economies and South Korea's $130 billion banking-sector rescue package.

Preliminary results of the Greenwich 2008 Asian Corporate Banking Study suggest that companies across the region agree that local economies will overcome significant headwinds and continue expanding over the next year. Marcus Ohlig, a Greenwich consultant, attributes the optimism, in part, to the fact that "credit conditions for Asian companies do not appear to have deteriorated to the extent that they have in Europe and the United States." At least to this point, he adds, in late-October.

However, the Greenwich Market Pulse reveals that Asian companies are beginning to feel the pinch of the global credit contraction, as 45 percent of the companies say their need for funding for ongoing operations is on the rise. Data indicates that reductions in credit availability as of mid-October were limited to a relatively small segment of companies, as opposed to being widespread across the region.

Although about one in five companies in Asia say their ability to access funding for ongoing operations has been curtailed by the market dislocations, an equal proportion of companies say their access to operational, funding has improved in recent months. Indeed, Ohlig says, "nearly a quarter...