Publications

The report analyzes U.S. reciprocal tariffs on Asian countries, with Cambodia and Vietnam hit hardest. Dual dependency puts many Asian economies in a strategic dilemma between the US and China. Using input-output models, it presents three scenarios (risk, pragmatic, optimistic) showing varying GDP impacts.

China’s banks face headwinds in 2025 amid weak credit growth, low profitability, and property sector stress. Narrowing interest margins and declining lending rates have pushed ROA and ROE to record lows. Real estate woes, LGFV debt, and US tariffs weigh heavily on the sector, while links to shadow banking grown modestly.

The recently closed "two sessions" set the 2025 growth target at around 5% and raised the fiscal deficit budget to 4%, breaking the redline of 3%.

The "two sessions" will discuss the most important issues ranging from the summary of last year economic achievements, to the announcement of 2025 key economic targets; from the continuation of the jumbo size stimulus package to outlining the blueprint of “Chinese-style modernization” with focus on high-end manufacturing.

This report examines U.S. reciprocal tariffs on Asian economies after President Trump’s announcement to match trading partners' tariffs. Findings show these tariffs won’t significantly cut U.S. trade deficits, as imbalances stem from comparative advantages, supply chains, and production costs, not tariff rates.

In this paper, we analyze what could go wrong in implementing the current jumbo size stimulus package to the Chinese economy and how to avoid these traps.

Amid fears of escalating US-China tensions in Trump 2.0, questions about Hong Kong's USD peg have emerged. The HKMA remains committed, supported by strong reserves and political backing. While abandoning the peg is unlikely short-term, external shocks and geopolitical shifts highlight the need for long-term alternatives.

Overall, the past year has been positive in terms of the evolution of macroeconomic, fiscal and financial vulnerabilities in most countries globally.