S. Korea Favored by Global Firms Growing Wary of China and India
By Reuters | 29 Jun, 2026

Global firms are pivoting toward S. Korea for expansion plans while scaling back existing businesses in China and India and widening product lines in a narrower set of markets.

Global financial firms are pivoting expansion plans towards South Korea while taking a more measured approach to China and India, according to an industry survey.

Firms are also scaling existing businesses and widening product lines in a narrower set of markets, the survey conducted by Asia Securities Industry & Financial Markets Association (ASIFMA) and consultancy firm KPMG showed.

Of 34 firms, about two-thirds plan to expand their Asia-Pacific business over the next three years, the survey found.

Singapore, Hong Kong, South Korea, China, Japan, India and Taiwan are attracting roughly half of firms' expansion interest.

"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," ASIFMA Chief Executive Peter Stein said.

ASIFMA said Singapore's sustained appeal reflects its multipolar geopolitical positioning: "it is not tied to China, the U.S., or any single ASEAN bloc".

Expansion interest in South Korea has jumped to around 50% of respondents from 21% a year earlier.

Stein said South Korea had historically been undervalued but sentiment was now extremely positive, not only in equities.

"There is also a clear expectation of increased activity in the bond market, supported by the government's road map toward WGBI inclusion," he said.

CHINA AND INDIA

Asia's two largest markets are drawing a more cautious approach. In China, concerns centre on geopolitics and regulation, while in India, they stem mainly from local rules and operational frictions.

"Participants recognise the commercial opportunity in Asia's two largest markets but view their complex regulatory environments as a challenge," ASIFMA said.

While India has climbed to fifth place from eighth in ease-of-doing-business rankings, regulatory conditions have become harder. Firms' appetite to expand there has cooled from earlier highs.

ASIFMA said authorities intended to simplify processes, but persistent difficulties in areas such as know-your-customer standards and non-deliverable forwards restrictions remained.

Expansion interest in China has steadied 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, ASIFMA said, as firms remain less certain about their long-term China exposure.

(Reporting by Jayshree P Upadhyay. Editing by Mark Potter)