The View | Asian real estate in a Trumpian age: buy Japan and India, avoid China?

When China’s stock market resumed its sharp decline in 2023 despite the reopening of the economy, Bank of America came up with a catchy acronym to describe the growing appeal of investment strategies and products that excluded China, particularly “Asia ex-China” products.

The MSCI China Index began to fall dramatically after 2021 while the Nikkei 225 index kept rising and surpassed its 1980s bubble era peak last year. Commenting on the stark divergence in the performance of Chinese and Japanese stocks, Bank of America said the Nikkei 225 was a beneficiary of “anywhere but China” (ABC) liquidity.

The ABC trade fizzled out earlier this year when Chinese stocks surged amid DeepSeek’s artificial intelligence breakthrough and doubts about “US exceptionalism” in global equity markets.

Yet as China bears the brunt of US President Donald Trump’s assault on the multilateral trading system, concerns about its vulnerable economy and markets have intensified. JPMorgan noted on April 11 that Chinese assets “have taken a U-turn, shifting to a bearish pricing on the outlook going forward”.

In Asia’s commercial property markets, cross-border investors – particularly those from the United States and Europe – have taken an ABC approach in recent years. The facts speak for themselves. In 2019, foreign investors bought almost US$20 billion of Chinese commercial real estate, accounting for 58 per cent of transaction volumes. Last year, they bought only US$5.8 billion, the lowest level in a decade, according to MSCI data.