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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Employees work on an assembly line at the Maruti Suzuki plant in Manesar, in the northern state of Haryana, India, on September 26. India has emerged as a potential alternative for investors amid rising US-China tensions and economic uncertainty. Photo: Reuters

David Chao

David Chao is a global market strategist (Asia Pacific) at Invesco.

Published: 3:30pm, 24 Oct 2023

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.

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.