Making progress on our strategy - Asia

Ahead of our Full year results for 2022 on February 28 we’ve been looking back at the progress we’ve been making against our strategic priorities. With Asia a critical part of our client-led plans, here we highlight some of the key developments delivered in this area over the last 12 months.

Asia  

In 2022, we celebrated 30 years of investing in Asia. Across those three decades, the region has transformed into an economic powerhouse – and there’s more to come. Ten years from now, 60% of the world’s middle classes will live in Asia, and by 2040, the region will account for 52% of global GDP and 40% of global consumption.

The tremendous growth ahead will need to go hand-in-hand with an unprecedented energy transition and a switch to sustainable development. Major opportunities will come from this transition, as ‘brown’ companies invest and pivot to become ‘green’. Without Asia, there is no energy transition because this is where emissions output is high and growing. But Asia is also home to the solutions, driving ongoing innovations in solar, wind, power storage and other clean technologies.

These factors offer significant opportunities, and to underline abrdn’s ambition to be at the forefront of all things sustainable in Asia, we held Asia Sustainability Week in May 2022. The event was an opportunity to share our insight and our ambition around investing sustainably for the future, and highlighted the work of our APAC Sustainability Institute, which covers investment-critical insights specific to the region and aims to better engage the investment community.

Our inaugural Sustainability Summit

We hosted our inaugural Sustainability Summit in Asia on 24 May 2022.

The theme of the event was centred around the extraordinary times we live in - as we face geopolitical conflict and macroeconomic uncertainty, amidst increased urgency for sustainability progress.

Find out more on our website or watch the highlights video below:

China

China is the world’s second largest equity market and 88% of its companies fall into the small and mid-cap size, making them the economic backbone of the country. In order to meet growing client appetite to invest in these opportunities, we have enhanced our product offering in this space.  We are focused on investing in four key themes:

Aspiration – Rising affluence in China is leading to fast growth in premium consumption, with areas including cosmetics and luxury car dealerships. Between 2020 and 2030, the number of households in China with annual incomes above $22k is expected to grow by 70%.

Green – Globally, policymakers are committing to a greener and lower carbon world. China dominates the green tech ecosystem with over 90 of global solar production capacity and 75% of battery.

Health – Rising disposable incomes are driving demand for healthcare products and services. Median age in China is 38, by 2050 it will be 46. Healthcare is set to benefit. See big opportunities in high quality healthcare service providers focused on clinical research and quality control.

Technology – China currently imports over $300bn worth of semi-conductors each year. Technological self-reliance is a key focus for policymakers in China and represents a huge opportunity for investors. On-shoring technology and substituting imports are strong trends also in automation and robotics.

As China begins to experience the strong rebound effect from re-opening after the strict zero-Covid lockdowns, we expect 2023 to be a robust one for its economy and many other economies in the region. Looking ahead, Asia will continue to be a key priority for the business, and abrdn is well placed to support our clients as they look to invest in this exciting region.