Asian markets have developed swiftly in recent decades, with large potential for the continent to dominate a far bigger proportion of the global economy and have been named as the “future engine of global growth” by Hargreaves Lansdown (HL).
China made up 15% of the broader emerging stock market back in 2008 but has since reached just over one-third, with one huge catalyst for its ascendancy being the gradual opening of its stock market to overseas investors.
Also, Covid aided Asia’s growth, HL said, while several companies could benefit from the region’s digital expertise, which is continually strengthening.
The country’s green revolution towards net-zero carbon emissions, especially in the electric vehicle and solar energy sectors, is gathering much momentum in Asia.
China’s ‘common prosperity’ agenda, which aims to reduce inequalities between genders and wealth classes, is also a driving factor behind its growth, with China’s middle-and high-income groups expected to expand by over a third of a billion people by 2030.
China’s share of global investors may increase over time, particularly as more Chinese companies are to be added to global stock market indices, HL said.
The healthcare and tourism industries could reap the benefits of rising Chinese consumer spending, while India and Vietnam currently draw in most of the foreign direct investment.
The sentiments chime with those of Suresh Withana, managing partner of Harmony Capital, which is the investment manager of Jade Road Investments Ltd (AIM:JADE).
“Asia is the world’s fastest-growing region,” Withana said in a recent interview with Proactive.
“Some [countries] are going to recover quicker [from the pandemic] than others and my bet is Asia,” Withana said.