These events in the world’s two most populous nations capture the dynamic of why we believe Asia will shape the 21st-century and command the attention of long-term global investors. Unprecedented energies are being unleashed through an alignment of digital innovation and the four M’s that characterize Asian consumers: Millennials, middle class, metropolitan, and mobile-enabled.
How the Four M’s Underpin a Bright Asian Future
We do, of course, live in times of uncertainty, and there is plenty that could go wrong in the narrative of Asia’s 21st century ascent. Trade frictions between China and the US, a possible fragmentation of 5G practices, regional rivalries within Asia, and uncertain coronavirus outcomes all pose threats to the continent’s future and to the global economy as a whole.
Despite this, there is no denying the social and demographic trends that are giving momentum to Asia’s rise in global economic leadership. Today’s Asian consumer is driving a transformation in the continent’s economic growth model that will play out for decades. Once the West’s manufacturing workshop, Asia has reinvented itself as an innovation leader, serving increasingly demanding and sophisticated home markets, now defined by the four M’s.
Global investors are paying heed, both through private equity and capital markets. According to CB Insights, China already has almost half the number of “unicorns” (start-ups valued at more than $1 billion) as the US, with 118 versus 238. India is quickly climbing up the global unicorn ranking as well, coming in third worldwide with 24.2 Meanwhile, global demand for Chinese assets has hit a record high during the pandemic, with foreign holdings of Chinese bonds and equities surpassing Chinese renminbi 1 trillion (approximately $150 billion) through August 2020.