A Massive Shift in Wealth From West to East

Written By Outsider Club

Posted February 20, 2014

According to a new report by HSBC, emerging Asia will have accumulated more wealth than the United States by 2015, signifying a massive shift in capital from the West to the East.

The report said that if the current trends persist, financial wealth is likely to grow even faster in the Association of Southeast Asian Nations (ASEAN) and India than in China over the next five years.

Wealth was calculated by adding up the value of bonds and stocks to broad money supply and subtracting net foreign holdings. However, if you measure by total financial assets, Asia has already surged ahead topping the United States in 2007.

Asia Wealth

Strikingly, Japan still accounts for the largest proportion of Asian wealth, even though China supplanted its rival as the world’s second-largest economy years ago.

However, China is expected to eclipse Japan by the end of the year, as it’s set to see its share rise to to 34% from 13% in 2012. Furthermore, its economy could add another $25 trillion by 2018, equivalent to the entire value of the U.S. residential real estate market at its peak in the mid-2000s.

Still, the rest of Asia is catching up, as well. Leaving China out, the ASEAN region would take just another 10 years to exceed U.S. financial wealth. Its proportion has risen from 5% to 8% of the total wealth in the region.