The Rising Tide of Wealth in Emerging Asia

Though Japan once dominated Asia in terms of financial wealth, the HSBC report suggests that China will overtake the island nation this year. China’s financial wealth will rise from 13% of the Asian total in 2012 to 34% in 2013. Its economy could grow some $25 trillion by 2018, easily outpacing Japan’s $8 trillion gain and an estimated $16 trillion increase in the United States over the same period.

Southeast Asian nations’ share of financial wealth rose from 5% of the Asian total in 2012 to 8% in 2013. However, those in Korea and Taiwan retreated slightly in that time.

The forecast is far from certain, however. The HSBC analysts admit that current trends would need to persist in order for emerging Asia to overtake the United States. They also acknowledged that a lack of consistent data on the share of households in total financial wealth, and in terms of the value of real assets like real estate, make it challenging to calculate just how wealthy the region has become.

The financial wealth of individual countries, including assets held by their governments, was assessed by combining the value of bonds and stocks with the broad money supply, and then subtracting net foreign holdings. Each country’s wealth was then converted to U.S. dollars.

Frederic Neumann, co-head of Asian economics research at HSBC, said:

Still, should current rates of economic and financial growth hold, emerging Asia would own a bigger pile of financial assets than the United States by next year. That’s up from 25 percent in 2000. No surprise, therefore, that luxury shopping malls have sprung up everywhere.