Bank of America Merrill Lynch recently published a report outlining eight trends that will shape the future of Asia in the next decade. I read about it on Business Insider – and they provided no link to the report itself. You can read their summary and see the associated charts here. The trends they identify are:
- Urbanization. China, Vietnam and Bangladesh will lead the wave of urbanization, which will boost growth and equity market returns.
- Korea leads a surge in R&D spending. China and India will be desperate to catch up.
- Young countries will outperform the old countries. Countries with higher fertility rates will grow faster: India, Philippines, Malaysia and Indonesia look good. China and Japan are aging, and will experience slowing economic growth because of this (in China’s case this might be offset by other factors).
- Crop yields will (have to) rise. India and the ASEAN countries have the furthest to go (ASEAN = Singapore, Brunei, Malaysia, Thailand, Philippines, Indonesia, Myanmar (Burma), Laos, Cambodia, and Vietnam).
- Inequality and disease will cause instability. The threat is huge in Philippines, Thailand and Sri Lanka.
- Health care and education spending will rise. South Asian education spending is disproportionately low (as a percentage of GDP).
- Telecom and technology spending will increase (this is also true of basic infrastructure across the whole region). India and Indonesia have a huge upside.
- Everyone is getting hooked on fossil fuels. China is still reliant on coal, and will remain so for a long time.
What do you think of their list? What trends do you think are important in the region?