Most (83%) of businesses in the ASEAN and Greater China regions are looking to expand internationally as they seek growth in the wake of the pandemic, according to a survey by the UOB banking group.

The UOB Business Outlook Study 2023 (SME & Large Enterprises) surveyed more than 4,000 businesses in markets including Singapore, Indonesia, Malaysia, Thailand, Vietnam, mainland China and Hong Kong.

While many recent headlines have dwelled on contractions in Asia’s exports and manufacturing output as demand slumps among Western consumers, the bank said businesses were enthusiastic about expanding inside Asia.

Companies in Indonesia, China, Thailand and Vietnam were most eager to expand, while those in Hong Kong, Malaysia and Singapore were the most hesitant.

Respondents identified China, Singapore, Thailand and Malaysia as the countries that were most attractive to them to expand in.

Factors holding respondents back from overseas expansion included difficulties in finding the right partners to work with, a lack of in-house talent, and a lack of legal and regulatory compliance and tax support.

More than half (60%) of SMEs surveyed said their supply chains had been affected by geopolitical tensions. UOB did not clarify what proportion of overall respondents were SMEs.

But the bank said that inflation was impacting the cost of purchasing and had deepened challenges in procuring suppliers.

And while 90% of those surveyed said sustainability was important, only 45% of respondents have implemented sustainability practices.

More than 50% of SMEs in Thailand and Vietnam have adopted sustainability practices, compared with only 38% of those in Singapore.

Around a third of respondents were trying to diversify their supply chain, build stronger relationships with suppliers and look to data analytics to help decision making.

Eric Lian, head of group commercial banking at UOB, said: “Regulators, industry leaders and corporates are becoming more rigorous and disciplined in achieving sustainability standards within their supply chains.

“Businesses that are slow to embrace ESG may lose out on business opportunities. The study found that less than half of businesses have incorporated sustainability practices.”