Firm Foundations of Growth: Productivity and Technology in East Asia and Pacific
June 2, 2025--The most productive (so-called frontier) firms in East Asia and Pacific are falling further behind global leaders, especially in the digital-intensive sectors that drive innovation. Synchronized reforms to improve competition, digital infrastructure, and skills can reignite productivity growth.
The productivity puzzle
In East Asia and Pacific (EAP), productivity growth has slowed over the past two decades. Why has this slowdown come at a time of rapid technological progress?
First, in EAP, aggregate productivity growth has been mostly due to increases within firms, with little contribution from reallocation of market share between firms or firm entry and exit.
Second, productivity growth has been slower within most-productive EAP firms-"the national frontier"-than less productive firms. This slows aggregate productivity, because the national frontier firms account for a large share of output and jobs. These findings are not unique to EAP, but are confirmed also in other developing countries.
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Source: worldbank.org
ETFs Unlock Growth in China's Booming Tech Landscape
May 29, 2025--In 2025, A-share tech-focused ETFs have continued to attract significant investor interests-the top five industry/thematic ETFs by net inflows, as of May 21, were all technology-related, collectively drawing in US$ 7.87 billion, including the E Fund CSI Artificial Intelligence ETF (159819), which saw a net inflow of US$ 1.17 billion.
Meanwhile, leading asset managers in China are observed to actively positioning themselves in tech-focused ETFs, such as AI ETFs, robotics ETFs, and aviation ETFs. Notably, E Fund Management ("E Fund"), the largest mutual fund manager in China, has highlighted six cutting-edge sectors, spanning artificial intelligence, robotics & smart devices, computing technology, healthcare technology, energy technology and space technology and has established a complete range of ETF products to capture growth opportunities.
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Source: E Fund Management
Hanwha Asset Management Launches Hanwha PLUS AI Agents ETF Tracking the Solactive US AI Agents Index
May 20, 2025--Solactive is pleased to extend its collaboration with Hanwha Asset Management with the launch of the Hanwha PLUS AI Agents ETF, which tracks the Solactive US AI Agents Index. This ETF offers investors targeted exposure to U.S.-listed companies at the forefront of artificial intelligence innovation, particularly those driving advances in generative, agentic, and autonomous AI systems.
The artificial intelligence sector is experiencing explosive growth, catalyzed by developments in generative AI and intelligent software agents. In 2024, AI integration in global enterprises reached 72%, with 65% of enterprises already deploying generative AI solutions, a dramatic acceleration from the previous year[1]. In 2025, the global artificial intelligence market is projected to reach $243.72 billion, with the U.S. accounting for the largest market share at $66.21 billion. By 2030, this figure is expected to more than triple to $826.73 billion, underscoring the significant long-term potential.[2]
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Source: Solactive AG
Meritz Securities, Partnering with Solactive for the First Time, Launches a Series of ETNs, Tracking Solactive WTI Leverage Indices
May 14, 2025--Solactive is pleased to announce its inaugural collaboration with Meritz Securities by supporting the launch of 3 ETNs, each tracking to the Solactive WTI Leverage Index family. Considering persistent global market fluctuations and heightened uncertainty surrounding energy supply chains, crude oil has reasserted its role as a key instrument for tactical asset allocation.
West Texas Intermediate (WTI) crude oil continues to draw investor attention due to its sensitivity to geopolitical and macroeconomic developments.
Leveraged strategies offer investors the ability to capitalize on directional views-either bullish or bearish-on short-term WTI price movements. Moreover, given WTI's differentiated correlation profile versus equities and fixed income, the indices may serve as effective diversifiers within broader multi-asset portfolios.
The product suite comprises three distinct leveraged index strategies: Solactive WTI Total Return 2x Long Leverage Index, Solactive WTI Total Return 2x Short Leverage Index, and Solactive WTI Total Return 1x Long Leverage Index.
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Source: Solactive AG
Timefolio Asset Management Launches TIMEFOLIO CHINA AI Tech Active ETF Benchmarked Against the Solactive China Artificial Intelligence Index
May 13, 2025--Solactive is pleased to announce its latest collaboration with Timefolio Asset Management. The TIMEFOLIO CHINA AI Tech Active ETF benchmarks the Solactive China Artificial Intelligence Index, offering investors targeted exposure to leading companies that are actively shaping the development and deployment of artificial intelligence technologies across both hardware and software sectors in China and Greater China.
China has established itself as a global AI powerhouse, supported by a structured government strategy, robust infrastructure and massive investment. According to the World Economic Forum, China's Next Generation AI Development Plan aims to position the country as a global AI innovation hub by 2030, highlighting the strategic importance of artificial intelligence to its broader economic transformation.[1] The market size in the Artificial Intelligence sector is projected to reach US$46.53 billion in 2025, with an expected annual growth rate (CAGR 2025-2031) of 26.89%, resulting in a market volume of US$194.19 billion by 2031, further underlining the sector's dynamic expansion and investment potential.[2]
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Source: Solactive AG
Hanwha Asset Management Launches Hanwha PLUS China AI Tech Top 10 ETF Tracking the Solactive China AI Tech Top 10 Index
May 13, 2025--Solactive is pleased to announce a new collaboration with Hanwha Asset Management on supporting the launch of the Hanwha PLUS China AI Tech Top 10 ETF, which tracks the Solactive China AI Tech Top 10 Index. This product aims to offer investors timely exposure to China's most prominent technology companies at the forefront of artificial intelligence innovation.
As China's AI development shifts from research to commercialization, the technology sector is entering a transformative phase. In late 2023 and early 2024, companies such as Alibaba, Tencent, and Baidu launched advanced AI applications, signalling the sector’s growing maturity. The index captures this momentum, offering investors a timely benchmark aligned with China's digital evolution. Backed by strategic priorities under the 14th Five-Year Plan and substantial investment-such as the $47.5 billion state semiconductor fund[1]-- the index reflects China's push for tech self-reliance. This shift is further underscored by growing geopolitical tensions, which are contributing to the emergence of a distinct regional tech narrative, increasingly independent from Western frameworks, and relevant for global investors seeking diversified exposure[2].
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Source: Solactive AG
Corporate Sector Vulnerabilities in Hong Kong SAR: Hong Kong, Special Administrative Region
May 6, 2025--Summary
Hong Kong SAR's corporate sector vulnerabilities appear manageable but have increased in recent years. Local non-real estate firms have seen weakening profitability and lower debt-servicing capacity, reflecting pandemic scarring effects and higher funding costs driven by the hiking cycle of U.S. monetary policy. While, on aggregate, their leverage level and liquidity appear manageable, there is high heterogeneity across firms, with smaller listed firms appear to be more vulnerable.
As for the local real estate firms, they are exposed to changes in property prices given their sizeable holding of investment properties and inventory. However, their relatively low leverage helps mitigate risks. Mainland Chinese firms listed in Hong Kong SAR show rising financial vulnerabilities, primarily due to weakening profitability and property market adjustment that have adversely affected property developers’ balance sheets. Proactive efforts are warranted to ensure effective monitoring and management of financial vulnerabilities in the corporate sector, including ensuring banks’ proactive management of nonperforming assets, assessing the impact of the ongoing property market adjustments, and calibrating policies to support small businesses appropriately.
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Source: IMF.org
ETF Monthly Trading Value via "CONNEQTOR" Reach Record 300 billion JPY
May 1, 2025--Tokyo Stock Exchange, Inc. ("TSE") launched CONNEQTOR service, a RFQ (Request for Quote) platform, in February 2021 with the aim of improving liquidity in the ETF market.
We are pleased to announce that the monthly trading value via CONNEQTOR reached a record high of 306.4 billion JPY (average daily trading value of 14.5 billion JPY) in April 2025.
As of the end of April 2025, more than 290 institutional investors are using CONNEQTOR.
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Source: Tokyo Stock Exchange, Inc.
NFO Alert: Mirae Asset Mutual Fund launches Nifty50 Equal Weight ETF
April 30, 2025--Mirae Asset Mutual Fund has launched the New Fund Offer (NFO) for the Mirae Asset Nifty50 Equal Weight ETF, an open-ended scheme replicating/tracking the Nifty50 Equal Weight Total Return Index. According to a release by the fund house, the ETF aims to offer investors equal-weighted exposure across all Nifty 50 stocks.
The NFO is currently open for subscription and will close on May 6. The scheme will reopen for continuous sale and repurchase from May 12.
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Source: economictimes.indiatimes.com
Asia Can Boost Economic Resilience Amid Surging Trade Tensions
April 24, 2025-Stronger regional economic ties can help build resilience during a time of growing policy uncertainty
As the global economic system is being reset, US tariffs are the highest in a century-with some of the steepest aimed at Asia. A leader in global trade, Asia accounted for nearly 60 percent of global growth in 2024. However, the region's successful growth model, based on trade liberalization and integration into value chains, faces mounting challenges.
While some levies have been paused, tensions between the United States and China have escalated significantly, as has trade policy uncertainty in general.
Against this backdrop, the outlook for Asia and the Pacific has dimmed. In our reference forecast, we project growth will slow to 3.9 percent this year from 4.6 percent last year. The downgrade of 0.5 percentage point, our sharpest since the pandemic, reflects weaker global demand, reduced trade, tighter financial conditions, and heightened uncertainty. We project 4 percent growth in 2026, also slower than previously forecast.
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Source: imf.org