Companies operating across the Asia-Pacific region should expect a more challenging environment in 2025, notes Steve Vickers, a risk analyst whose resume includes nearly two decades in Hong Kong law enforcement. The CEO of Steve Vickers Associates, a political and corporate risk consultancy, Vickers shared his geopolitical outlook at a lunch hosted by the British Chamber of Commerce in Macao at the Grand Hyatt yesterday.
With the administration of US President-elect Donald Trump entering the White House later this month, Vickers immediately identified confrontational Sino-American relations as the key factor setting the geopolitical tone across the Asia-Pacific region. He cautioned that the security architecture that had previously guaranteed regional stability would come under greater strain, and that companies could no longer separate economic considerations for their businesses from geopolitical concerns.
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“The détente achieved between the world’s largest economies is fading,” Vickers said, adding that competition between the US and China has become institutionalized. Each country was pursuing a fear driven ideological approach, he believed, rather than adopting rational analysis and assessment.
Geopolitical pressures across Asia-Pacific
Sino-American strains are being felt across the region, as neighboring Asian nations are forced to pick sides, raising the risks and costs of doing businesses in those markets, the analyst warned. Compounding the challenges is an economic slowdown in China, where falling property prices and sluggish household activity has placed the onus of growth upon exporters vulnerable to US tariffs and other trade restrictions.
“The incoming US administration has telegraphed its intention to use tariffs as part of opening negotiation salvo,” Vickers said. Among possible retaliatory measures, China could limit the export of rare earth minerals, like lithium, which are essential for high-technology devices, such as communication devices, drones, and electric vehicles. Increasing subsidies for select industries or weakening the currency could act as another deterrent, he said.
While the repercussions would be felt across the APAC region, a fallout between Washington and Beijing could become problematic for Special Administrative Regions of Macao and Hong Kong, where American and mainland Chinese companies both operate.
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“Companies should prepare for a worsening outlook, not only to protect their interests, but also to position themselves to benefit from these changes,” Vickers cautioned. Higher insurance costs and tougher access to capital will be in the cards, as businesses are expected to face intensifying difficulties in separating commercial activities from security affairs. “This is the reality of the world we live in.”
Vickers meanwhile praised Macao for making “directionally positive” strides in reducing the casino industry’s dependence on high rollers, noting that while 2024’s gross gaming revenue (GGR) of nearly 230 billion patacas matched only the levels reached in 2016, and were less than 80 percent of its pre-pandemic levels, the components of the 2024 figure appear healthier, with VIP gambling now accounting for about a quarter of the total, compared to over half back then.
At the same time, he warned that this would also simply push the reputational hazards associated with junket operators to neighbouring countries. This, he said, had created a game of whack-a-mole enforcement and underscored the need to maintain vigilant protocols for companies in Macao, even though illicit activities were now occurring elsewhere.
