Money Supply in East Asian Industrial Economies

Over the past two decades, the proportion of the global money supply held by five East Asian economies (China, Hong Kong, Japan, South Korea, and Taiwan) has exhibited remarkable stability. Notably, China has overtaken Japan in the global money supply hierarchy, emerging as the primary force and leader among East Asian economies in recent years.

East Asian economies typically maintain a money supply-to-GDP ratio roughly twice as high as the global average. Despite comprising 25% of the world's GDP in 2022, these economies contributed 36% of gross fixed capital formation, 42% of manufacturing value added, and 35% of manufactured exports globally. Sustaining industrial and export operations, managing supply chains, and supporting investments all require significant funding. However, some economies within the region experience an excess money supply.