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The View | China, India or Japan: which offers the best hope for investors in 2024?
- As the spotlight drifts away from China, global investors have turned to alternative Asian growth stories, particularly Japan and India
- Japan has been bolstered by efficiency and productivity gains, while India has drawn investors with its demographics and potential for longer-term growth
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Several weeks into the final quarter of 2023 and Asian investors are starting to reflect on a year in markets that looks very different from the lofty expectations many had back in January.
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The hope was that the rapid lifting of China’s zero-Covid policy would unleash animal spirits across the domestic economy, potentially driving a rally in global growth as revenge spending and investing would lift risk assets across stocks, real estate and even commodities. However, these hopes were quickly dashed as consumer spending flatlined and the property market continued to contract.
The latest GDP figures for China show an annualised growth rate of 4.9 per cent in the third quarter, an improvement from the near-deflationary conditions seen over the summer. Investors both domestically and globally remain on edge over China’s economic recovery.
As the investing spotlight has drifted away from China, global investors have turned to alternative Asian growth stories. The investing theses for Japan and India, two popular alternatives, could not be more different.
In Asia, the Japanese equity market has seen the highest foreign portfolio investment flows so far this year (US$29.2 billion as of October 13), followed by India (US$14 billion as of October 17), according to Bloomberg data. Latest figures for China show it had US$6.8 billion in net foreign flows as of June 30.
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China’s economy sees a resurgence in the third quarter, beating forecasts
China’s economy sees a resurgence in the third quarter, beating forecasts
Investor interest in Japanese equities has been relatively consistent throughout the year as the investment case has solidified. With big markets such as the US and Europe facing economic uncertainty and potential recession, Japan has seen consumer spending rise with a wave of tourist arrivals.
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