While western economies have been struggling with soaring inflation, rising interest rates and slowing economic growth, the managers of abrdn Asian Income Fund (AAIF) note that Asian markets, while not immune to these pressures, have generally not faced headwinds of the same magnitude. Asian markets have outperformed global equities in 2022, with the Indian, Australian and Hong Kong markets being especially buoyant. The economic issues facing Asia differ from those seen in the west. Arguably, the structural fundamentals for the region as a whole are more supportive in that the demographics underpin better long-term demand, with higher growth and lower levels of personnel, corporate and government debt. In addition, Asian equity markets are trading on lower forward valuations compared with other geographic regions. China, which accounted for c 30% of equity markets and 46% of the region’s GDP in 2021, remains a source of both optimism and concern. On the one hand, it is in a position to loosen monetary policy (as inflation is not yet a concern) but on the other hand there is political uncertainty due to the presidential elections in Q322, coupled with ongoing zero-COVID-19 lockdowns and continued geopolitical tensions around Taiwan.