Asian Finance Totals $28T, Now 20% Of Assets Held By Foreigners

The countries of East and Southeast Asia are renowned, even envied, for reshaping global supply chains. Less well appreciated is the extent to which they have redrawn the map of global capital flows, the Economist reported.

Photo Insert: Bangkok, Thailand financial district

After a buying spree over the past decade or so, the region’s 10 biggest economies now hold nearly $28 trillion in foreign financial assets, more than three times the amount in 2005 and equivalent to a fifth of global assets held by foreigners.

Once-staid institutions that are little-known in the West—from obscure Japanese banks and Taiwanese insurers to South Korean pension funds—now wield heft in markets for assets ranging from collateralized-loan obligations (CLOs) in America to high-speed rail lines in Britain.

East Asia has long been recognized as a contributor to the global “savings glut,” a concept popularized by Ben Bernanke, then a governor at the Federal Reserve, in 2005.

The scale of Asia’s foreign holdings has only grown since, as the region has become richer and older.

The Economist has looked at figures for the gross foreign financial assets for 10 East and Southeast Asian economies. The combined foreign financial assets of our ten countries rose from around $8 trillion in 2005 to nearly $28 trillion in 2020, increasing the region’s share in global foreign-held financial assets by five percentage points.

WEEKLY FEATURE : MVP Group Keeps Lights On During Pandemic