Asian Economy Bloats vs US and EU Combine – ANZ
On Monday, ANZ released a new report titled, 'Caged Tiger: The Transformation of the Asian Financial System.'
The report predicts that the Asian financial system is bloating its way to be larger than the United States and Europe combined by 2030 with Asian bond markets growing by six times yearly in the span of 15 years.
Key points of the report:
- Asian (excluding Japan) bond markets will grow to be six times their current size over the next 15 years to match the size of US debt markets.
- The RMB market will dominate in Asia not only because of the size of the Chinese economy but also because it will be a regional funding currency.
- China's debt markets are forecast to grow from around US$4 trillion in 2013 to around US$27 trillion in 2030.
- The equity market capitalisation across the Asian (excluding Japan) region is also expected to explode, rising from US$9 trillion to almost US$55 trillion by 2030.
- The Chinese banking system is likely to overtake the size of the US system by 2020.
- The Asian financial system is on track to be bigger than the US and Europe combined by 2030.
- China will be the dominant market in Asia, accounting for around half of Asia's financial assets by mid-century.
- By 2030, China's financial system could be more than twice as big as that in the US.
In an interview with The Australian, ANZ chief executive officer Mike Smith said that China is playing an important role in the growth of the Asian economy.
"Continued progress in financial reform, deregulation and opening up to global markets in Asia will be essential to support high levels of economic growth in the region. China is central to this Asian Century scenario. The direction and sequencing of reform envisaged following the Third Plenum will significantly influence the direction and growth of its financial system," Mr Smith said.
Mr Smith added that Sydney's economy is also showing a significant growth, including Shanghai, Singapore, Seoul and Mumbai.
"Asia's financial institutions will become increasingly important in global finance and Asia will become home to many of the world's largest financial centres. Shanghai will grow to rival New York as a financial centre. Singapore will increase its importance as a south-east Asian hub."