Asian Capital "Looking Inwards": China and India Lead the Way, $22 Trillion Market Hides These Opportunities

Do you know? Asia is quietly rewriting the rules of global finance. According to the latest report from HSBC, the trend of "Asia buying Asia" which first emerged in 2012, has grown into a profound movement. By the end of 2024, the assets managed in the Asian region had reached 22 trillion US dollars, more than three times the amount in 2012, with an average annual growth rate of 11%, and the proportion of GDP in the region skyrocketed from 44% to 76%. This means that Asians are shifting more savings from gold and jewelry to local financial products, reflecting the quiet rise of regional financial resilience. Why are China and India leading the way? Policy dividends are the key. In this trend, China and India have shown particularly outstanding performance. India's systematic investment plan (SIP) is considered a "brilliant move": investors regularly contribute a fixed amount to mutual funds every month, not only enjoying a tax deduction of up to 45,000 rupees per year, but also exempting capital gains tax (up to 125,000 rupees) for profits held for over a year. Low risk + tax benefits make ordinary people more willing to invest their money in the financial market. China, on the other hand, is directing funds "inward" through policies, such as a new regulation by the China Securities Regulatory Commission in January 2025 requiring state-owned insurance companies to invest at least 30% of new premiums into the domestic stock market, while also encouraging dividend payments and stock buybacks to make A-shares more attractive to domestic capital. In addition, countries like Singapore and Thailand are also making efforts: Singapore has launched a $5 billion stock market development plan, focusing on supporting investments in small and medium-sized stocks; Thailand introduced an "ESG extra return fund" to attract long-term funds through tax incentives. Which industries will be boosted? In this wave of "locals investing in locals," several major industries are hiding opportunities: Banks: In regions with low financial penetration rates such as Indonesia, the Philippines, and India, banks are busy helping entities like LBX Pharmacy Chain Joint Stock move money hidden in jewelry boxes to financial products, with banks like Bank Central Asia in Indonesia and BDO Bank in the Philippines benefitting from this. Insurance companies: Enterprises like Ping An Insurance and HDFC Life in India are rapidly growing by taking advantage of the windfall of increased penetration of insurance products. Asset management companies: Demand for customized pension and savings products is soaring, with companies like HDFC Asset Management Company in India taking the lead. Exchanges and brokerages: With increased local trading activity, exchanges like HKEX and Huatai are directly benefiting from improved liquidity. How much room for growth is there in the future? It is worth noting that the process of "financialization" in Asian countries is not evenly distributed. Countries like Singapore and Hong Kong have established mature insurance and pension systems, while markets like Indonesia and the Philippines still have relatively low asset sizes compared to GDP, indicating vast growth potential in the future. The report predicts that with the prevalence of smartphones and digital finance, ordinary people can easily buy stocks and funds with just a few taps on their phones, leading to the trend of Asian capital looking inward to accelerate further. This not only reduces dependence on the US dollar but also allows the regional economy to stand more stable in the face of global fluctuations. Perhaps before long, we will realize that Asia's money is propping up its own future in a smarter way. (Data source: HSBC Global Investment Research August 2025 report)