Asia’s Economy and Markets in 2026

Laura Wang and Chetan Ahya discuss the 2026 macro outlook for Asia, focusing on China's equity market. They analyze the unexpected strength in Asia's exports in 2025, driven by tech, and project a shift to non-tech export recovery in 2026, supported by improved U.S. demand and easing tariff uncertainties. This shift is expected to broaden economic growth, leading to increased capacity utilization and a modest pickup in inflation, prompting central banks to end rate-cutting cycles. For China's equity market, 2026 is anticipated to be a year of stability with earnings-driven growth, attracting global investor inflows into R&D and innovation-heavy sectors like AI and smart manufacturing, alongside continued interest in high-quality dividend stocks. They also highlight strong capital market activities in Hong Kong and thematic opportunities in anti-evolution and corporate governance reform.