At the beginning of 2020, the economic outlook for the Asia-Pacific region was relatively promising. 

There were lingering fears regarding the outcome of the US-China trade war, but global trade and industrial output looked to have bottomed out in late 2019, offering hope of a recovery in 2020. All eyes were on China, the largest economy in Asia – if China performs well, the positive spill-over would boost economic growth, trade and welfare in the Asia-Pacific region as a whole.

Then, of course, a virus was detected in Wuhan, the capital city of China’s Hubei province, and the rest is history. By mid-January, the virus had spread to every province in China and by the end of January, cases had been detected in 20 more countries, most of them in Asia.

Being hit first, Asian governments immediately took a range of measures to contain the spread, including increased public health advice and monitoring, restrictions to inbound and outbound travel and outright lockdown of affected areas.

Prioritizing containment of the epidemic over economic growth was key at the start. Having dealt with the SARS outbreak in 2003 gave Asian countries an edge over the rest of the world. The memory of that crisis seems to have led to better preparedness by governments and a greater willingness amongst populations to comply with restrictions on movement and daily life to prevent the spread of infection.

There has been some recovery in economic activity since late March, but Asian economies are clearly still operating well below normal levels, and consumer spending will be impacted for many months to come. The two biggest challenges for China – and consequently the rest of the region – are avoiding a second wave and dealing with a decrease in demand from the rest of the world.

Within Asia-Pacific, individual governments have taken steps to stimulate their respective economies and support local businesses. Such measures are being adopted around the world and Asian economies are amongst the most ambitious in this respect.

The Chinese government, for instance, unveiled its latest stimulus package worth at least 4.5% of GDP at the National People’s Congress on 22 May. Also notable is the absence of a GDP growth target for 2020 given the uncertainty about the pandemic and the global economic outlook – this means China can concentrate on stabilizing the economy rather than achieving a certain target.

The government of Singapore, meanwhile, announced two separate stimulus packages amounting to 12% of GDP which include salary subsidies, direct support to residents and aid for the hospitality, aviation and tourism sectors.

Hong Kong announced cash handouts of HKD 10,000 (US$1,283) for each permanent adult resident and a 100% write off of salary taxes for companies, as well as a number of additional measures to lower the cost of living and the cost of business, taking the total stimulus to around 10% of GDP.

And Malaysia set out a fiscal package of 17.2% of GDP including a 10-year 0% tax rate on certain new investments from foreign manufacturers, a tax rebate for start-ups and stamp duty exemptions for certain transactions.


For Jersey, recognising the specific challenges the coronavirus has thrown up for Asian economies and understanding the steps governments in the region have taken to stimulate economic activity has been critical, and our experience has been that our ability as a jurisdiction to be proactive in taking steps to support clients and partners in the region has been very well received.

The fact that the industry has come together quickly with the Government of Jersey and the Jersey Financial Services Commission to ensure business can continue despite the challenges posed by the current environment has been appreciated by corporate, funds and private clients in the region.

In fact, this resilience has proven to be a really positive differentiator.

The decision of the Jersey authorities to relax economic substance rules at an early stage, for instance, has given firms the ability to ensure ongoing compliance by using technology to hold virtual board meetings, whilst the Jersey Registry has been able to continue to incorporate new entities.

Circumstances have also really highlighted the competitive advantage of Jersey’s high-speed fibre broadband – the 3rd fastest in the world. It has proven to give businesses in Jersey the ability to continue to transact and support clients remotely, in difficult circumstances, without any impact on service quality. That is something that is highly prized amongst corporate, funds and private clients in Asia, who recognise this level of forward-thinking.

Focus on stability

In particular, as we look forward to supporting Asian investors over the coming months, the feeling is that, if ever there was an opportunity for specialist funds jurisdictions to distinguish themselves, the start of 2020 provides a defining moment to do so.

The outbreak of COVID-19 and the increasingly complex regulatory environment means that investors are looking for jurisdictions that can offer expertise, certainty and stability, with no regulatory, legal or economic surprises.

While the links between Asia and Jersey have traditionally been strong through private wealth structuring, more and more these families have been looking at setting up their own alternative funds. As recent weeks have shown, Jersey offers stability and expertise and therefore there has been a natural gravitation for Asia fund managers to Jersey as a domicile for alternative investment funds.

In particular, as managers grapple with challenges such as asset valuation, being able to rely on strong corporate governance standards such as those applicable in Jersey is vital. Investors also want to allocate to funds that are domiciled in jurisdictions with good infrastructure, considerable local expertise and knowledge of the asset class in question along with well-established regulations.

Jersey also has a tried-and-tested, cost-effective route market into the EU through private placement – the number of managers using this route through Jersey has grown by 9% year-on-year.

Compared to other jurisdictions, this is all setting Jersey apart as a specialist in funds and we anticipate that this focus on stability and service excellence will rise in appeal over coming months. In fact, Jersey has played host to a number of new notable funds, brought to market during ‘lockdown’, and is seeing an uptick in enquiries from Asian managers.

With figures for the first quarter of 2020 showing that Jersey is administering more fund assets than ever before, with particular growth in alternatives such as private equity and real estate, Jersey is in a very strong position to respond to this anticipated demand in Asia and support economic recovery.