Asia is expected to drive a rebound in emerging markets even as China’s economy slows, according to a French asset management firm.

As geopolitics and policy changes create “a more fragmented world,” new opportunities are likely to emerge in the global realignment as companies adapt by forming new partnerships and relocating operations, Amundi said.

In his Global Investment Outlook 2025Amundi highlighted emerging Asian economies as demonstrating “steady growth” driven by regional integration and dominance in the technology supply chain.

Commenting on global growth trends, Monica Defend, head of the Amundi investment institute, predicted weaker growth overall. But while the US economy is expected to slow and Europe is poised for a modest recovery, emerging markets are expected to maintain a growth premium over advanced economies.

“We forecast global growth to moderate to 3.0% in 2025. and 2026 The growth gap between emerging and developed markets should also stabilize, with EM growing +3.9% and DM +1.6% over the next two years,” she said.

“We expect the US economy to slow slightly to a soft landing, Europe’s recovery to potential growth to be moderate and progressive, and Asia to remain the main driver of growth despite China’s slowdown.”

Namely, Amundi explained that emerging Asia is expected to continue to benefit from increasing regional integration and resilience as it continues to shift towards “more strategic objectives”.

The two standouts in Asia are India and Indonesia, both of which have been described as “most insulated” from the impact of President-elect Donald Trump’s policies.

“India and Indonesia are positioned as long-term beneficiaries as we expect continued reorientation and policy support to stabilize the Chinese economy and mitigate the possible negative impact of tariffs,” the report said.

Amundi’s forecast predicts that sustained economic growth will continue in India, normalizing to approximately 6.5 percent in 2026, driven by a combination of domestic demand and investment.

Separately, Federated Hermes highlighted India’s strategic partnership with the US in the Indo-Pacific region, countering China’s growing influence.

Under the Trump administration, India and the US are expected to continue to strengthen their defense ties and given that India’s economy is “largely domestically driven”, the impact of potential US tariffs is expected to be relatively “muted”.

“Depending on the Trump administration’s focus, there may be opportunities for increased economic cooperation in sectors such as technology, pharmaceuticals and manufacturing. India’s response to various developments will also play a crucial role in shaping the future of US-India relations,” the firm said.

On the other hand, China, the second-largest economy, is expected to bear the brunt of Trump-era trade policies, although many expect tariffs to remain below the promised 60% on all Chinese goods.

However, Amundi predicted that China still has “room to react”, including through potential new stimulus measures.

Earlier this month, China announced a domestic debt of US$1.4 trillion, leaving markets frustrated by the lack of direct stimulus.

According to Amundi 2025 will mark China’s “new normal,” requiring structural reforms and political support to counter the economic slowdown.