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For years, Asia was the world's factory as low- cost labor attracted massive investment from abroad.

But now the spending power of Asians is set to become an even bigger draw for firms looking to expand in the region, a survey of chief executives has found.

According to a PricewaterhouseCoopers survey, more than 44 percent of CEOs polled are convinced the rise of affluent consumers in Asia, particularly in China, will offer the single biggest opportunity for growth for their companies.

While companies continue to expand in low-cost manufacturing in China, and to support the country's hunger for commodities, the rising wealth in the Asia-Pacific consumer markets is the driving force behind investments.

In the last two years, China has emerged as the world's largest market for automobiles, and a substantial destination for luxury goods. There will also be a new wave of investment flowing into the Asia-Pacific evolving market place for services.

Victor Fung, group chairman of the Li & Fung Group, a global trading group, was quoted as saying: "We are at a very important inflection point in the evolution of supply chains. The developing economies are not only producing but consuming. That means supply chains are no longer flowing one way as they have traditionally been doing - sourcing from the East and selling to the West."

DBS economist Irvin Seah explained that Asia will become one of the fastest-growing and biggest markets, and it is no longer about companies using Asia as a manufacturing hub because of the cheaper costs, but about them tapping Asia's growing demand.

He said: "Asia's domestic demand was the key driver for its fast recovery after the global financial crisis, and this demand will continue to propel Asia's prosperity. It would be a tremendous opportunity for overseas investors to tap this growth. In China, or Indonesia, or India, even though they are at different stages of economic development, they have a rising and rapidly growing middle income group, which will mean a strong domestic market."

Singapore's domestic demand, on the other hand, is too small to be a growth engine by itself, but the investments pouring into the region will benefit the country as well, said Seah.

He added: "Singapore is often perceived as the launch pad for foreign investments into the region because of our connectivity, business structure, and increasingly our rigorous intellectual property regime. Companies may prefer to locate their higher value-added and strategic activities here."

However, corruption in the region still remains a big worry, with more than 32 percent of business leaders claiming it as a growth barrier to a "great extent."

The CEOs also said that it was the weak US economy that had the greatest impact on their businesses in the past two years, with 31 percent saying that it had impacted their business to a great extent, compared to the euro zone debt crisis (17 percent) and the March 11 earthquake and tsunami in Japan (12 percent).

CIMB regional economist Song Seng Wun also cautions that a weakened US and Europe economy may have trickle down effects, and in turn affect the rosy Asian growth story that many CEOs are counting on.

"If the worry in Europe goes into a drawn out recession, and demand from the Western economies dip, it will still take out a big chunk of the global economy, and shave some of the margins in the export-oriented economies such as Singapore and even the coastal cities of China," he said.

More than 320 CEOs in 26 countries, including the 21-member Asia-Pacific Economic Cooperation (Apec) economies, took part in this survey conducted from July to September. It was conducted for the Apec CEO summit to be held in Hawaii this week.

Reprinted courtesy of Straits Times Indonesia. To subscribe to Straits Times Indonesia and/or the Jakarta Globe call 021 2553 5055.