Asia’s affluent and their financial advisors express confidence in China’s eventual recovery and are positioning themselves for growth in the region, which remains the world’s fastest-growing despite recent slowdowns. We need the resilience and patience to weather cycles and fluctuations,” remarked Piyush Gupta, CEO of DBS Group, during an interview at the Reuters NEXT conference in Singapore. He emphasized a forward-looking strategy where China emerges from its current property challenges to drive regional economic expansion. Similar sentiments were echoed by bankers, investors, and advisors serving high-net-worth individuals.
These viewpoints highlight a steadfast commitment among top businesses and wealth managers in Asia, potentially paving the way for renewed foreign investment inflows.
Despite China’s recent economic data showing areas of weakness like consumption and property markets, Gupta remains optimistic about the longer-term prospects. “While short-term challenges exist, particularly in the property sector, a strategic outlook—historically successful in the U.S.—shows promise,” he added. “Given the megatrends in Asia, a long-term perspective on the region is favorable.”
In 2024, there has been a net influx of 22.4 billion yuan ($3 billion) from foreign investors into Chinese stocks, albeit amidst volatility and recent sell-offs triggered by significant home price declines reported in June.
“Sentiment, particularly from the U.S., remains cautious towards China,” noted Stefanie Holtze-Jen, Chief Investment Officer for Asia-Pacific at Deutsche Bank Private Bank, during another panel discussion at the Reuters NEXT conference. She pointed out that local ultra-high-net-worth clients are actively invested, recognizing the pro-growth policies of the Chinese government, which could attract further foreign investment as market conditions stabilize.
Meanwhile, Southeast Asia presents an attractive interim opportunity, with favorable demographics and political stability supporting growth. Countries like Vietnam and Malaysia are benefiting from increased manufacturing activities by global companies. However, challenges such as capital outflows and political uncertainties in Vietnam underscore the complexities of regional investment landscapes.
Looking ahead, there are signs of steady or growing foreign direct investment across Southeast Asia, with initiatives such as China International Capital Corp’s expansion into Indonesia’s investment banking sector. Stephen Ng, CICC’s head for Southeast Asia and Singapore, highlighted plans for deeper engagement in Indonesia and Malaysia, reflecting growing investor interest and confidence in the region.
On the wealth management front, sentiments and investment flows remain robust, particularly towards Singapore, a hub for wealth management in Asia. Khanh Vu, Deputy Managing Director of VinaCapital Fund Management, emphasized that investor demand in Vietnam remains strong, bolstered by ongoing anti-corruption efforts and local insights crucial for navigating investment risks.
“Investors need to be on the ground, conducting thorough due diligence,” Vu emphasized, contrasting remote assessments with the value of local expertise and firsthand experiences.
Overall, while challenges persist, Asia’s investors and financial experts are optimistic about the region’s long-term growth prospects, driven by resilience, strategic foresight, and targeted investment approaches amidst evolving global economic dynamics.
