“Asia’s Economic Evolution: From Cheap Labor to Industrial Services Dominance
Once known for its competitive advantage in cheap labor, Asia has undergone a transformative shift. According to KKR’s heads of global and Asia macro, the region, encompassing economic powerhouses like China, India, and Japan, now thrives on its prowess in industrial services.
In a recent note from the private equity giant, KKR highlighted the rising significance of sectors such as logistics, waste management, and data centers in Asia. The firm sees both internal demand and external factors contributing to the region’s dominance in these areas.
This investment perspective follows a recent tour of Singapore, China, and Japan by Henry H. McVey, Chief Investment Officer of KKR Balance Sheet, and Frances Lim, Managing Director and Head of Asia Macro and Asset Allocation, based in Singapore.
KKR’s report predicts a substantial acceleration in the demand for infrastructure and logistics in key Asian markets, including India, China, Indonesia, the Philippines, Vietnam, and even Japan.
As the region undergoes a more extended-term shift requiring increased fixed investment, KKR has strategically allocated about 20% of its balance sheet to Asia. The economic landscape is evolving, and Asia’s pivot towards industrial services seems to be a key driver of this transformation.”
