Asian economies step out of China's shadow

[CrazyExpat]

Thailand, Malaysia, Singapore and Vietnam should not be overlooked by investors looking to cash in on the recovery in the Far East.

There's a real buzz in Asia right now as economies in the region here power ahead and look to break out of the shadows of China. On my doorstep in Singapore the economy is on course for record-breaking growth of up to 15pc for the year. And there are a host of rivals hot on its heels to be the shining star of Asia.

Across the border in Malaysia economic growth of close to 7pc is predicted this year followed by Indonesia at 6.6pc. South Korea and the Philippine's are both on course to hit 6pc growth in 2010.

Local newspapers are quick to flash these headline-grabbing growth rates across their front pages, highlighting just how attractive the region is to investors with so many countries doing well.

Most observers outside the region look to China and to a lesser extent India as the driving force behind Asia's strong economic rebound. But many of their neighbours are trying to make names for themselves as more than just tiger economies. This is creating excitement within Asia right now as the up-and-coming Vietnams and Thailands jostle with more established players such as Singapore and Hong Kong.

And sovereign wealth funds, hedge funds and private investors all want in on the act. Fidelity's South East Asia fund is up 25pc over the past year and run out of Hong Kong. China accounts for 38pc of the fund, followed by South Korea (21pc), Taiwan (13pc) and Hong Kong (8pc).

Catherine Yeung, associate director at Fidelity's Asian headquarters in the former British colony, said: ''China is a huge influence, but a lot of Asian countries are going through similar changes themselves such as urbanisation, building new infrastructure and rising middle classes who are consuming more.

''They also have well-run, prudent banks and focus more on domestic demand so we are very positive about Asia as a region, not just China.''

Indonesia is a good example of this. It hopes to beat this year's impressive growth with 8pc next year and is on course to be the next big emerging economy behind the BRICs (Brazil, Russia, India and China). It is south-east Asia's biggest economy and has some very promising statistics, including that more than 55pc of the population is under 30 years of age.

While it relies on India and China to buy lots of natural resources, Indonesia is also attracting a lot of foreign investment, which will help it diversify. South Korea's LG Electronics and Caterpillar from the United States both recently picked Indonesia as their main south-east Asia manufacturing hubs.

Another attraction to investing in Asia is diversity. From the tiger economies of Indonesia and the Philippines to the more defensive economies like Malaysia, and more developed markets such Australia and Singapore.

For the Full Story:

http://www.telegraph.co.uk/finance/personalfinance/investing/7941568/Asian-economies-step-out-of-Chinas-shadow.html