Asia's equity and corporate bond markets are on course to assume close to a 30 percent global share by 2030. Credit Suisse Research Institute's latest «Asia in Transition» report highlights the changes.

«With Asia delivering sustained and elevated growth in recent years we felt compelled to take a deeper look into the multifaceted and exciting changes taking place in the region,» said Urs Rohner, Chairman of the Board of Directors of Credit Suisse Group and Chairman of the Credit Suisse Research Institute.

Upper-middle-income Asian economies are evolving from manufacturing export-led growth models toward greater output from service sectors, while large pools of domestic savings will progressively fund consumption as the engine of growth thus rebalancing from debt-fueled investment.

Changing Export Dynamics

Asia's export mix is increasingly value-added with a rise in domestic inputs and directed within the region. But rising labor costs will likely encourage a redistribution of China's dominant export share among lower-income regional economies with thriving manufacturing sectors such as Vietnam and Bangladesh.

This may be compounded by supply chain diversification necessitated by potentially ongoing US-China trade frictions.

North and South Asian Divide

Maturing North Asian economies are losing their demographic dividends while other less-developed neighbors will likely continue to reap the benefits for the next decade(s).

Rising age-dependency ratios and the declining pace in urbanization will provide obstacles to future growth in China, South Korea and Taiwan while South Asian countries such as India, Pakistan, Bangladesh and Sri Lanka continue to reap the benefits of a growing working-age share of the population for at least two more decades.

Rising Middle-Class Wealth

Wealth creation is rising the fastest of any global region among Asian households, with 93 million people joining the middle class (defined as having wealth in the range of $10,000 to $100,000) in the last seven years alone.

Technological innovation has the potential to further transform Emerging Asian economies by offering lower-income economies the opportunity to accelerate their progress toward full financial inclusivity and by enabling the middle-income economies to emerge as leaders in the knowledge-based sectors of the global economy.