Asia Buys Asia is gaining pace as households shift savings into local assets.
Regional AUM has tripled since 2012 to $22 trillion, now 76% of GDP.
Banks, asset managers, insurers and exchanges all benefit from rising local liquidity.
In a world edging towards a new economic order, Asian economies are leaning heavily on financial resilience. A growing pool of domestic savings is now being channelled into local markets, a structural shift HSBC has termed “Asia buys Asia.”
The idea is not entirely new. The trend began taking shape in 2012, but its momentum has gathered pace in the post-Covid years. With the US dollar weakening and policymakers in Washington openly debating the cost of underwriting the world’s reserve currency, Asian policymakers are prioritising systems that are more regional and less dependent on the greenback. That has meant building channels to mobilise household savings and redirecting them into domestic assets.
“Asia buys Asia is a mega trend we have tracked since 2012. Since then, it has expanded far faster than expected. Asian households are shifting from gold, jewellery and property towards mutual funds and insurance products,” HSBC wrote in a recent report.
The numbers speak for themselves. Assets under management (AUM) in Asia stood at $22 trillion by the end of 2024, more than triple the level in 2012. “That implies a compound annual growth rate (CAGR) of 11%, versus the brokerage’s earlier expectation of 7%. It also means that 76% of regional GDP is now represented in local assets, up from 44% a decade ago,” HSBC noted.
China and India have led the charge, propelled by tax incentives and government-backed savings schemes. “India’s domestic AUM, for instance, grew at an 11% CAGR in 2012–14, rising to 13% from 2017 onwards. China has grown at 14% since 2012, though the pace has eased to 11% since 2017. By contrast, Malaysia and Thailand have lagged, reflecting more limited availability and uptake of collective investment schemes,” the report showed.
What’s Driving the Shift?
Across the region, governments are laying the groundwork to channel local money into local markets. In India, Systematic Investment Plans (SIPs) allow retail investors to feed money into index funds monthly, supported by tax deductions and capital gains exemptions. In China, regulators have instructed state-owned insurers to allocate at least 30% of new premiums to domestic equities, alongside measures to encourage dividends and share buybacks.
In Singapore, the Monetary Authority launched a S$5 billion Equity Market Development Programme, with over S$1 billion already deployed into small and mid-cap stocks and a further S$50 million committed to strengthen local equity research. Thailand has introduced a long-term equity fund, Thai ESG Extra, combining tax benefits with market-stabilisation objectives.
These schemes have met with the rampant rise in smartphone penetration and the introduction of digital investment platforms, which have made equity investing more accessible to retail savers. As HSBC noted, this points to regulators actively building resilience in a world where the US may be less willing to play lender or buyer, of last resort.
Who Benefits?
The brokerage sees wide-ranging beneficiaries. Banks can help households shift savings away from gold and jewellery towards financial products, particularly in under-served rural markets such as Indonesia, the Philippines and India. Asset managers are positioned to design bespoke pensions and savings vehicles, while insurers can expand through equity-linked products. Exchanges and brokers will, in turn, gain from the deeper pools of local liquidity that follow.
