Who is Driving Asia’s Strong Growth? It’s Chindia.

Asia is widely recognized as the fastest growing economic region, as well as the largest continental economy by Gross Domestic Product (GDP) and Purchasing Power Parity (PPP), in the world. With these impressive credentials, Asia provides many opportunities for investors to invest in the continent’s prosperity.

Representing more than 60 percent of the global population (approximately 4.4 billion people), Asia is home to some of the world’s largest economies, including China, Hong Kong, India, Japan, Russia, and South Korea; as well as as well as in oil rich countries in West Asia such as Saudi Arabia, Qatar, United Arab Emirates, Iran, Kuwait, and Oman. Driven by the growth from these economic giants, analysts forecast that the growth for Asia will increase considerably in 2016, causing the continent’s GDP growth to rise to 5.8 percent.

The question I seek to answer is, amid these Asian economic giants, who is really driving the strong growth in Asia? From my research and experience, it is primarily fueled by the GDP contributions of two leading economies: China, and India; or “Chindia” as it is commonly referred to.

China

China is the world’s fastest growing consumer market and second largest importer of goods in the world. As a global hub for manufacturing, the country is recognized as the world’s largest manufacturing economy, as well as the largest exporter of goods. This has introduced opportunities to invest in the shipping industry and other sectors powering the country’s growth.

Albeit experiencing slower growth than in previous years, China will still outperform most of the world’s other large economies in 2016, with a growth rate of 6.3 percent. In fact, according to research conducted by the World Bank, China is expected to continue to experience strong growth over the long-term and sometime between the year 2020 and 2030, establish itself as the largest economy in the world.

Over the next 10 years, China’s economy is expected to re-balance toward more rapid growth in consumption, which will help the structure of the domestic economy. – Rajiv Biswas, IHS Chief Asia Economist

Because it is strategically tied to the national economy, investment into the country’s transportation infrastructure has been given high priority. In an aggressive plan to boost the economy, China has announced plans for investment in a multi-tier transport network, which – comprised of railways, roads, and airports – will create a new economic belt and deliver more prosperity to the country and its neighbors.

India

The Indian economy has been one of the greatest beneficiaries of the economic boom, emerging as one of the world’s largest exporters of software and other information technology related services. Riding the economic momentum, India’s growth for 2016 is forecast to reach 7.5 percent.

With an average growth rate of approximately 7 percent over the last two decades, India has finally emerged as the world’s fastest growing major economy, replacing the People’s Republic of China in the last quarter of 2014.

With China slowing, India is certainly carrying the day in terms of best growth rates. – Peter Boockvar, Lindsey Group’s Chief Market Analyst

Given the country’s record of strong growth and economic momentum, it should come as no surprise that India is forecast to emerge as the second largest economy in the world (after China); sometime between the year 2030 and 2035.

China + India = Chindia

Chindia is a portmanteau word that refers to China and India together in general, and is symbolic of the close geographic and economic ties the two countries share.

China and India contain more than one-third of the world’s population (nearly 2.7 billion) and are both among the fastest growing major economies in the world. Recognized as countries with the highest potential for growth over the next half-a-century, these two economic powerhouses offer a good alternative for investors searching for investments in global trade and growth outside Europe and The Americas.

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