Indosuez: Asia Moves From Cyclical Recovery to Structural Transformation
Asia is entering a new phase of economic evolution, one defined less by export-led momentum and more by domestic rebalancing, policy recalibration, and structural transformation. Francis Tan, Chief Strategist Asia at Indosuez Wealth Management, argues that these shifts are reshaping the region’s growth model.
A central theme of Francis Tan’s analysis is Asia’s ongoing rebalancing away from excessive reliance on exports and external demand. Across the region, policymakers are prioritising domestic consumption, services, and higher value-added activities.
This transition is particularly visible in China, where growth is increasingly driven by the service sector rather than property or heavy industry, signalling a more sustainable economic structure over time.
Risks Managed, Optionality Preserved
While China’s property sector remains fragile, Tan highlights that macro risks are being contained through targeted policy support and a deliberate shift toward consumption and innovation.
A key underappreciated factor is the vast pool of household savings, which represents a latent source of capital that could be redeployed into consumption and financial markets, providing a stabilising force during the transition.
Beneficiaries of Supply Chain Reconfiguration
Beyond China, emerging Asia is benefiting from global supply chain diversification. ASEAN economies and India are attracting manufacturing investment as companies seek resilience amid geopolitical fragmentation.
This repositioning supports employment, domestic demand, and capital formation, reinforcing Asia’s role as a growth engine even as global trade patterns evolve.
Tailwind From a Softer Dollar
Tan underscores the importance of financial conditions in this transformation. A weaker US dollar improves the solvency of Asian borrowers with dollar-denominated debt, lowers imported inflation, and gives central banks room to ease policy.
For investors, currency appreciation in local markets enhances total returns and encourages capital inflows into Asian equities and bonds.
Quiet But Powerful Shift
Another structural positive is the improvement in macro policy frameworks across Asia. Stronger central bank credibility, more disciplined fiscal management, and reduced reliance on currency intervention have increased resilience to external shocks.
Compared with past cycles, Asia enters this phase of recalibration with healthier balance sheets and greater policy flexibility.
Investment Implications
For financially savvy investors, the message is clear. Asia’s transformation is not a short-term rebound story but a structural re-rating opportunity.
Rebalancing growth drivers, recalibrated policies, and improving financial conditions together support a stronger case for strategic allocation to Asian assets, particularly equities and local currency debt, within globally diversified portfolios.
Asia as a Pillar of the Great Recalibration
As global markets adjust to a new economic order, Asia stands out not for resisting change, but for embracing it.
The region’s rebalancing, recalibration, and transformation are laying the foundations for more stable growth and deeper capital markets.
In the context of the Great Recalibration, Asia is no longer just a growth satellite – it is becoming a central pillar of global investment strategy.
