Publications

China’s banking sector showed resilience in 2025 and early 2026, supported by policy easing and ample liquidity. However, weak domestic demand and previous margin compression continued to weigh on profitability and internal capital generation, despite signs of margin stabilization in 2026.

The Chinese economy grew by 5% in 2025 driven by exports, despite weak domestic demand and the real estate crash. 4.5% growth is expected for 2026, supported by stimuli and measures against industrial overcapacity. Reflation narrative is on the rise amid the Iran war.

The recent military escalation in the Middle East represents a new energy crisis for the global economy. Although higher resource prices will put upward pressure on inflation, for now, a temporary slowdown rather than a deep global recession is expected.

Over the past year, the global economy has once again shown that stability is always provisional. The economic policy measures of the U.S. administration, together with persistent geopolitical tensions, have substantially increased economic uncertainty.

The AI race is rapidly accelerating across all its dimensions. It is no longer just about software and models, but also about the infrastructure that makes them possible.

In this report, we are trying to explain the puzzle of why China’ trade surplus has kept expanding in 2025 during the trade war by the US as presumably people believe exports should decline due to high tariffs.

China’s Outward Direct Investment (ODI) flows are undergoing a structural reconfiguration driven by geopolitical risk and protectionism. Investment is shifting sharply away from Global North countries and toward the Global South due to increased scrutiny. Future expansion will emphasize deep localization in key regions.