Global financial firms are making a significant strategic pivot toward South Korea while adopting a more cautious approach to China and India, according to a comprehensive industry survey. Expansion interest in South Korea has jumped to around 50% of respondents from 21% a year earlier, as reported by Reuters. ASIFMA Chief Executive Peter Stein noted that sentiment toward South Korea is now extremely positive, not only in equities but also in the bond market, supported by the government's road map toward WGBI inclusion. Stein explained that South Korea had historically been undervalued but sentiment was now extremely positive, with clear expectations of increased activity in the bond market. The survey, conducted by Asia Securities Industry & Financial Markets Association (ASIFMA) and consultancy firm KPMG, revealed that of 34 firms, about two-thirds plan to expand their Asia-Pacific business over the next three years. Regulatory clarity, stable policies and capital market opportunities are driving investment decisions as firms reassess regional strategies amid geopolitical risks and operational challenges.
The survey, conducted by Asia Securities Industry & Financial Markets Association (ASIFMA) and consultancy firm KPMG, revealed that of 34 firms, about two-thirds plan to expand their Asia-Pacific business over the next three years. According to the report, Singapore, Hong Kong, South Korea, China, Japan, India and Taiwan are attracting roughly half of firms' expansion interest. Stein explained that competition within Asia has intensified, with China no longer being the dominant destination for foreign capital as it was five years ago. Firms are focusing on expanding existing businesses and broadening product offerings in a smaller number of key markets rather than pursuing widespread regional growth. ASIFMA highlighted that Singapore's sustained appeal reflects its multipolar geopolitical positioning, noting it is not tied to China, the U.S., or any single ASEAN bloc. The city-state's ability to maintain balanced relationships with major global powers and regional blocs has helped sustain investor interest.
Asia's two largest markets are drawing a more cautious approach from global financial firms. In China, concerns centre on geopolitics, regulatory uncertainty, capital controls and data governance rules, while in India, they stem mainly from local rules and operational frictions. As reported by Reuters, participants recognise the commercial opportunity in both markets but view their complex regulatory environments as a challenge. While India has climbed to fifth place from eighth in ease-of-doing-business rankings, regulatory conditions have become harder, with persistent difficulties remaining in areas such as know-your-customer standards and non-deliverable forwards restrictions. ASIFMA noted that firms' appetite to expand there has cooled from earlier highs, despite authorities' intentions to simplify processes. Expansion interest in China has stabilised at around 40%, down from earlier peaks, as firms weigh capital controls, data rules and geopolitical risk. On onshoring, the Chinese mainland continues to drift lower as firms remain less certain about their long-term China exposure.
ASIFMA emphasized that Singapore's sustained appeal reflects its multipolar geopolitical positioning, noting it is not tied to China, the U.S., or any single ASEAN bloc. The survey also revealed that expansion interest in China has stabilised at around 40%, down from earlier peaks, as firms weigh capital controls, data rules and geopolitical risk. Stein emphasized that "Competition within Asia has intensified. Five years ago, China was the dominant destination for foreign capital. Today, we are seeing more Asian countries compete for a share of Tier-1 global flows." The report shows that global financial institutions are becoming increasingly selective about where they deploy capital and resources, favouring markets that offer regulatory clarity, stable policy environments and expanding capital market opportunities. The survey highlights a broader shift in regional investment strategies, with firms prioritizing markets that can provide the right balance of growth potential and operational stability.
