Why big investment banks are betting on Asia. A short introduction about this fascinating continent and its promise.
Asia is the most populous continent, with its 4.54 billion inhabitants accounting for 60% of the world population. The world's two most populated countries, China and India, together constitute about 36% of the world's population. see below link (http://www.worldometers.info/world-population/asia-population/).
The continent covers an area of 44,579,000 square kilometres (17,212,000 sq mi), about 30% of Earth's total land area and 8.7% of the Earth's total surface area. The continent, which has long been home to the majority of the human population, was the site of many of the first civilizations. Asia has played a key role in global economy. China is expected to overtake the US to become the biggest economy in the world by 2028 (see this link: https://www.bloomberg.com/graphics/2016-us-vs-china-economy/).
Other economies like Vietnam, India, the Philippines, Indonesia are expected to grow at 7% average over the next decade. Many economists predict that the Asia Pacific will be the fastest growing economy in the world.
Key elements
"Not the strongest nor the smartest that will survive, but the most adaptive" Albert Einstein.
Asia is blessed with a robust population. Most countries, beside Japan, have enjoyed economic growth due to their labour markets. Within their young labour markets, there is a growing trend in innovation and start-up ventures. Many local inventions have successfully competed with competitions from global players.
Along with young population, their economies have also diversified away from manufacture. China is a leading example of this. In the early 2000, China was referred to as the world's factory. However, China itself in recent years, have moved away from labour-intensive industries, and reinvigorated its economy. These are also supported by the government, with accommodative policies, in order to grow its domestic economy.
Through these changes, Asia is preparing itself for the future.
How will it impact you?
Many economists have suggest that Asia will improve its status and role on the global stage. Some economists sometime call this trend to be "Asian century". Whether you are investing in or traveling to Asia, these factors will impact your future decisions.
What should you do?
To keep up with the trend, you need to equip yourself in the best possible way. There are many ways to capitalise on Asia's economy. For example you can invest directly in Asian equities, or through an ETF to take advantage of this growth.
We believe this is an exciting opportunity, and great timing to capture this potential.
Speak to your advisors today.
Written by Dean Nguyen, September 2018.
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