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Asia's Investment Map Shifts: South Korea Gains, China/India Caution
30 Jun
Summary
- Global firms are shifting expansion focus to South Korea, with caution on China and India.
- Singapore and Hong Kong remain attractive, but South Korea's appeal has significantly risen.
- Concerns over geopolitics, regulation, and operational issues temper China and India's outlook.
An industry survey reveals a significant shift in global financial firms' expansion strategies across the Asia-Pacific region. Over two-thirds of participating firms plan to grow their presence in the next three years. South Korea has emerged as a particularly strong growth market, with expansion interest nearly doubling from the previous year. This surge is attributed to historical undervaluation and positive sentiment, especially concerning potential World Government Bond Index inclusion.
Conversely, China and India, historically dominant markets, are now approached with greater caution. Geopolitical tensions and regulatory environments in China, along with local rules and operational frictions in India, are primary concerns. Despite recognizing the commercial opportunities, firms find the complex regulatory landscapes challenging.
Singapore and Hong Kong remain key hubs for expansion, with Singapore's appeal bolstered by its neutral geopolitical stance. While expansion interest in China has stabilized, concerns about capital controls and data rules persist. In India, despite improvements in ease-of-business rankings, firms face ongoing regulatory hurdles, leading to cooled expansion appetite.
