It might seem like an odd moment to raise the issue. Financial markets are in a tizzy as the Fed slams on the brakes. More importantly, the pandemic has brought extra hardship to untold millions across Asia, with all the glitz and bling often so prominently on display deflecting from the often yawning, and unquestionably rising, income inequality.
Still, it is worth for a moment to pause and take stock of Asia’s rising wealth – the region’s overall financial wealth from bank deposits to securities. One reason is that the deepening pool of local savings is providing a measure of resilience against the vagaries of global financial markets: the Fed may be raising interest rates, but emerging markets in Asia are better placed to take it all in their stride than in years past… for a number of reasons, certainly, but with advancing local financial depth prominent among them.
The second reason relates, indirectly if powerfully, to the issue of economic hardship. An account of Asia’s growing wealth also shines a light on the societal resources that are ultimately available to lift millions more out of poverty. After all, the region is hardly short of capital, even if this is unevenly distributed, both between and within economies.
An exercise we undertook several years ago, which measured the aggregate financial wealth in the region, a key turning point came in 2008, when financial wealth in Asia started to exceed that in the US, with Japan accounting for over half of the wealth held in the region. By 2025, wealth in Asia excluding Japan could outstrip the US, while China’s share in the region has already climbed to nearly 46% and Japan’s has fallen to a quarter.
This time, we add another layer to our analysis: for each economy, we project the number of individuals that will reach certain wealth (including real estate) brackets in the coming years. In China, for instance, the number of adults with a net wealth of at least USD250k is expected to double by 2030 to around 350 million, while tripling in India to close to 60 million. As another example, over 2 million adults in Vietnam may own at least USD500k in wealth by the end of the decade, greater than the number of Singaporeans. And even further up the wealth scale, region-wide, the number of millionaires is projected to jump from roughly 30 million currently to over 76 million by the end of the decade.
Amid all the current challenges, a reminder of Asia’s growing resilience and financial depth – a strengthening buffer that should foster over time greater, shared prosperity.
Frederic Neumann Chief Asia Economist, Co-head Global Research Asia HSBC Bank
