Attracting Global Capital: Asia’s New “Super Cycle” Is Underway
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Attracting Global Capital: Asia’s New “Super Cycle” Is Underway
The core drivers encompass three major themes: AI infrastructure, energy security, and defense spending.
Navigating Web3 tides with focused insightsAuthor: Bao Yilong
Investors are turning their attention to Asia in search of the next breakout in the global equity rally.
Fueled by the artificial intelligence (AI) wave, South Korea’s stock market has led global gains this month, attracting substantial capital inflows. Implied volatility in the options market has surged to extreme levels, prompting derivatives strategists to compete in recommending long-structured trades.
All these signals point to a shared conclusion: Asia’s rally may only just be beginning.
According to Trend Trading Desk, Morgan Stanley’s Asia-Pacific team has recently emphasized repeatedly that the underlying drivers of Asia’s industrial cycle are shifting—from traditional real estate and general manufacturing inventory restocking—to investments in AI and its infrastructure, energy security and transition, and defense and supply chain resilience.
(Asia’s total fixed investment is projected to rise to $16 trillion by 2030)
Morgan Stanley forecasts that Asia’s fixed asset investment could grow from approximately $11 trillion in 2025 to $16 trillion by 2030, with a nominal compound annual growth rate (CAGR) of about 7% between 2026 and 2030—significantly higher than recent levels.
(Asia’s total fixed capital investment will maintain a 7% CAGR between 2026 and 2030)
The Underlying Logic of the “Super Cycle”: A Clear Acceleration in Asian Capital Expenditure
The most distinctive feature of this Asian industrial cycle is that AI has brought capital expenditure back to center stage.
Over the past two years, market discussions on AI have largely centered on models, applications, and the U.S. “Magnificent Seven” stocks. Yet from an Asian perspective, AI fundamentally means comprehensive expansion across chips, memory, servers, optical modules, data centers, power systems, and cloud infrastructure.
Morgan Stanley notes that the share of global CIOs naming AI as their top priority has risen to 39%. Correspondingly, global AI data center investment is expected to reach approximately $2.8 trillion between 2026 and 2028, growing at an annual rate of around 33%.
(Capital expenditure related to AI data centers globally will continue to increase)
Asia sits at the heart of the AI hardware supply chain: companies ranging from TSMC, Samsung, and SK Hynix to mainland China’s semiconductor, server, optical communications, and cloud infrastructure firms will all benefit from this investment cycle.
The report also projects that major chipmakers’ capex could rise from roughly $105 billion in 2025 to approximately $250 billion annually by 2028—underscoring that AI is a capital-intensive race.
China’s role is especially noteworthy.
Morgan Stanley views China’s AI development as a competition of full-system capabilities: computing power determines speed; cloud platforms determine scale; token usage determines economic efficiency; and application scenarios determine value capture.
Against the backdrop of ongoing external chip restrictions, the synergistic advancement of domestic AI chips, indigenous cloud platforms, and large-model ecosystems is emerging as a new core theme for technology investment in China.
(Relative advantages of China and the U.S. in the AI industry)
Its analysis suggests that China’s AI chip market could reach $67 billion by 2030, with domestic self-sufficiency rising to 86%.
Whether this forecast fully materializes remains to be seen—but the direction is unmistakable: domestic computing power production has evolved from a policy-driven initiative into a commercially viable proposition.
China’s Export Story Is Expanding from the “EV Triad” to Robotics
In recent years, China’s export structure has been dominated by electric vehicles (EVs), lithium batteries, and photovoltaics—the so-called “new three.”
The report argues that the next phase of incremental growth in Chinese manufacturing exports may come from robotics—particularly industrial and humanoid robots.
Morgan Stanley points out that China already accounts for nearly half of global incremental demand for industrial robots. Global shipments of humanoid robots are projected to reach 13,000–16,000 units in 2025, with approximately 90% supplied by Chinese manufacturers. In contrast, markets such as the U.S. and Japan remain largely at the prototype or early validation stage.
More intriguingly, the report draws a parallel between China’s current robot exports and EV exports around 2019: EV exports had not yet entered their explosive growth phase, but supply chains, policy support, and manufacturing capacity were already largely in place.
(China’s humanoid and industrial robotics industries are at a developmental stage comparable to the early phase of the EV industry)
Today, the robotics industry exhibits similar characteristics—its overall market size remains modest, yet its supply-chain expansion is rapid.
Data shows that China’s exports of humanoid robots and robot-related products reached a rolling 12-month total of approximately $1.5 billion in March 2026—a level comparable to China’s EV exports at the beginning of 2020.
In subsequent years, EV exports expanded rapidly, reaching roughly $70 billion for the full year 2025, with quarterly annualized run rates climbing further to around $86 billion.
Of course, whether robotics can replicate the EV trajectory depends on cost reductions, broader application adoption, and overseas regulatory environments. Yet China’s advantages in components, system integration, supply-chain coordination, and rapid iteration are already becoming evident.
Energy Security and Defense Spending Are Providing the Second and Third Growth Engines
The flip side of AI data center expansion is massive demand for electricity and energy infrastructure. The denser the computing power, the more critical electricity, cooling, grid networks, and energy storage become.
Morgan Stanley believes that energy shocks will catalyze Asian investment in energy security, while renewable energy still accounts for a relatively small share of Asia’s primary energy consumption—indicating ample room for future investment.
(Renewable energy still occupies a small share of Asia’s energy mix; China stands to benefit significantly from increased spending on energy transition)
China holds industrial advantages in photovoltaics, EVs, and lithium batteries, with related exports already approaching a rolling 12-month total of $200 billion—making it a key beneficiary of this round of energy transition-related capital expenditures.
Meanwhile, defense spending is exhibiting a structural upward trend across multiple Asian economies.
Defense spending as a share of GDP has risen in Japan, South Korea, India, and elsewhere. China and South Korea are also among the world’s top ten defense exporters.
(Defense spending as a share of GDP is rising across the region)
For capital markets, this implies longer-term demand support for high-end manufacturing, materials, electronic components, and precision equipment supply chains.
In other words, AI drives computing-power demand; energy provides infrastructure constraints; and defense and supply-chain security deliver “resilience investment” within a geopolitical context. Together, these three forces form the foundation of Asia’s super cycle.
Who Benefits Most? China, South Korea, and Japan Sit at the Core of the Supply Chain
From a regional perspective, Morgan Stanley highlights China, South Korea, and Japan as primary beneficiaries.
Mainland China excels in supply-chain completeness, manufacturing scale, engineering capability, and emerging export categories such as new energy and robotics.
South Korea holds advantages in memory, high-bandwidth memory (HBM), batteries, and select equipment and materials segments; Japan retains deep expertise in semiconductor equipment and materials, precision manufacturing, and industrial automation.
The share of capital goods exports further illustrates the point. The report indicates shares of roughly 38% for Thailand, 36% for China, 35% for Japan, and 30% for South Korea. This suggests that when the world enters a new equipment investment cycle, external demand elasticity for these economies will be particularly pronounced.
Finally, from the perspective of capital-market structure, industrial, tech hardware, and materials-related sectors hold relatively high weights in these markets—meaning macro-level capex cycles translate more directly into equity-market performance.
This also implies that the pricing logic of Asian markets may shift over the coming years, with greater focus placed on which companies along the capex chain possess order visibility, technological barriers to entry, and earnings leverage.
Risks That Cannot Be Overlooked: Overcapacity, Margins, and Geopolitical Friction
While the super-cycle narrative is compelling, it does not guarantee uniform benefits across all industries or firms.
First, capex expansion may generate short-term supply pressures.
China’s new-energy sector has already demonstrated that scale advantages can rapidly open global markets—but may also trigger price competition and margin volatility. Similar challenges may lie ahead for robotics, AI hardware, photovoltaics, and energy storage sectors.
Second, technology restrictions and export controls remain variables.
Although domestic AI chip production offers enormous potential, bottlenecks persist in advanced process nodes, HBM, EDA tools, and equipment and materials. The report acknowledges that domestically produced chips still lag behind top-tier U.S. chips—but competitiveness can be enhanced through system optimization, advanced packaging, and software adaptation.
Third, employment structures will also be reshaped by AI.
In its “Future of Work” research, Morgan Stanley estimates that roughly 90% of occupations will be affected—either augmented or automated—to varying degrees by AI. Among its sample companies, early AI adoption has already delivered over 11% productivity gains, but also coincided with an average net job reduction of ~4%, with significant variation across countries and sectors.
For China, therefore, balancing efficiency gains with workforce retraining and occupational transitions will constitute a critical medium- to long-term policy and corporate management challenge.
Fourth, market volatility may intensify. The report cautions that diverging bull- and bear-case scenarios across regional markets imply persistent investor disagreement regarding AI capex, export orders, and profit realization.
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