Asia Investment Surges Past US$100B as Diversification Grows
Investment inflows into Asia, excluding China, have surged past US$100 billion in the last nine months. This shift comes as businesses prioritise resilience over efficiency in their supply chains and global investors diversify away from the United States.
The trend sees Japan emerging as a significant beneficiary, with foreign funds re-examining Chinese markets following a rebound in Chinese equities. Dilhan Pillay, CEO of Temasek International, has noted the changing landscape due to geopolitical tensions, tariffs, and energy constraints, stating that 'the globalisation we once knew is gone'.
Indonesia, with its high trade volumes and growth prospects, has become a major beneficiary of trade and investment flows within ASEAN. EU-Indonesia trade reached 27.3 billion euros in 2024, reflecting its role as a key market and investment destination in Asia. Technology, luxury goods, manufacturing, and healthcare are among the industries attracting strong investor interest in the region.
While much of the recent inflow into China is from fast-moving hedge funds seeking short-term gains, creating volatility, current allocations to China are estimated at only 60-65%. This suggests investors are 'testing' or 'speculating' rather than making full-scale, long-term commitments. The future of investment in Asia remains dynamic, with businesses and investors alike adapting to the evolving geopolitical and economic landscape.
