---
title: "Global Financial Firms Are Pivoting to South Korea and Cooling on China"
description: "Half of the global financial institutions in a new industry survey say they plan to expand in South Korea over the next three years — double the share a year ago — while appetite for China has flatlined and India has slipped down the list. Korea's governance reforms and a coming bond-index inclusion are pulling in the money."
category: "Markets"
category_url: https://boursel.com/category/markets
author: "Olivia Chen"
published: 2026-06-30T00:43:40.000Z
updated: 2026-06-30T00:43:40.000Z
canonical: https://boursel.com/article/global-financial-firms-are-pivoting-to-south-korea-and-cooling-on-china
tags: ["south-korea", "china", "asia", "capital-flows", "markets"]
---
# Global Financial Firms Are Pivoting to South Korea and Cooling on China

Half of the global financial institutions in a new industry survey say they plan to expand in South Korea over the next three years — double the share a year ago — while appetite for China has flatlined and India has slipped down the list. Korea's governance reforms and a coming bond-index inclusion are pulling in the money.

Global money is quietly reshuffling across Asia — and **South Korea** is the winner. In a survey of dozens of major global financial institutions by the **Asia Securities Industry & Financial Markets Association (ASIFMA)** and **KPMG**, **half** said they plan to grow their South Korea operations over the next three years — up from about **a fifth** a year earlier, [Investing.com reported](https://www.investing.com/news/economy-news/global-financial-firms-pivot-to-south-korea-cautious-on-china-and-india-survey-shows-4766754). Appetite for **China** held flat (around 40%), while **India** slid down the priority list. "Competition within Asia has intensified," ASIFMA's chief executive Peter Stein noted; five years ago, China was the runaway favorite.

## Why South Korea

Three things are pulling capital toward Seoul.

**Governance reform.** Korea's **Corporate Value-up Program**, launched in 2024 and strengthened since, pressures companies to use capital more efficiently and return more to shareholders via **dividends and buybacks**, [as AllianceBernstein has detailed](https://www.alliancebernstein.com/us/en-us/investments/insights/investment-insights/south-koreas-rising-governance-tide-how-to-ride-the-value-up-wave.html). Lawmakers also cut the tax on dividends to sweeten the deal. The aim is to fix the **"Korea discount"** — the long-standing tendency of Korean shares to trade **cheaply** (often below book value) versus global peers.

**Index inclusion.** South Korea is set to join a major **global government-bond index** in 2026, a change expected to draw **tens of billions of dollars** in passive inflows as index-tracking funds rebalance into Korean bonds — a mechanical, sticky source of demand. (Figures circulating are estimates; treat them as directional.)

**A tech powerhouse.** Korea is home to **Samsung, SK Hynix** and a deep semiconductor-and-manufacturing base — exactly the exposure global investors want as **AI and chip** demand booms, a theme Boursel has tracked through Korea's massive chip investments.

## Why the caution elsewhere

The survey's wariness toward **China** reflects familiar worries: **geopolitical risk**, regulatory unpredictability and slower growth, even as some money trickles back into select sectors. **India**, by contrast, is less about fear than about **price and friction** — a strong multi-year rally has left valuations stretched, and foreign investors cite access and compliance hurdles. (These are the survey respondents' stated concerns, presented neutrally — not a verdict on any market's returns.)

## Why it matters

For **markets**, this is a story about **where global capital goes in Asia** — and a vote of confidence in the idea that **reforms get rewarded**. Korea's pitch is that better corporate governance, clearer rules and index-inclusion tailwinds make it a more **investable** version of Asian growth than the alternatives right now. If the **value-up** push keeps delivering and the bond-index inflows arrive on schedule, the rerating of Korean assets could have further to run.

The caveats are real: survey sentiment is **intentions, not flows**, and it can reverse; Korea has its own politics and a heavy reliance on exports and the chip cycle. And "cautious on China" has been a recurring refrain that global investors have, at times, walked back. But the direction in this snapshot is clear — and it lines up with a broader rethink of **how to play Asia**: favor the markets fixing their flaws, and demand a higher bar from the giants. Boursel offers no view on any individual market; the signal worth noting is that, for now, global finance is **leaning toward Seoul**.

## Sources

- [Global financial firms pivot to South Korea, cautious on China and India, survey shows](https://www.investing.com/news/economy-news/global-financial-firms-pivot-to-south-korea-cautious-on-china-and-india-survey-shows-4766754)
- [South Korea's rising governance tide: the Corporate Value-up Program](https://www.alliancebernstein.com/us/en-us/investments/insights/investment-insights/south-koreas-rising-governance-tide-how-to-ride-the-value-up-wave.html)