27 February 2020

Asia ‘to pass US, Europe’ as biggest financial market by 2030

Asia will overtake the United States and Europe to be the world’s largest financial market by 2030 and is likely to represent half of the global economy by 2050, according to Australia and New Zealand Banking Group Ltd.

ANZ chief executive Mike Smith said the financial depth of the top 10 Asian economies is projected to grow to US$211 trillion by 2030 from US$55 trillion in 2010. Financial depth refers to the size of a financial market.

At the same time, the financial depth of the United States will fall to US$91 trillion from US$114 trillion while Europe’s will drop to US$82 trillion from US$91 trillion, an ANZ report said.

ANZ expects China’s fixed-income market to leap in the coming decades.

ANZ chief economist Warren Hogan said mainland bond markets will also expand. According to the ANZ report, China’s bond markets will grow to US$32 trillion by 2030 from the US$5 trillion now while that of United States would fall to US$36 trillion from 2010’s US$38 trillion.

Hogan expects the pace of deregulation in the Chinese banking sector to accelerate, with banks focusing more on sectors such as consumer finance and funding for small and medium-sized enterprises.

And as the central government allows people to invest abroad, it will encourage the two-way flow of capital. 

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