22-01-2026

China continues to solidify its status as a global economic anchor. It is transitioning from high-speed, investment-led growth toward a model defined by high-quality development and technological self-reliance, despite ongoing structural headwinds.. While the economy faces structural headwinds—including a protracted property sector correction and a rapidly aging workforce—it remains resilient, with real GDP growth for 2025 hovering around 5.0%, bolstered by a surge in high-tech exports like electric vehicles (EVs), semiconductors, and green energy solutions. Looking toward the 15th Five-Year Plan (2026–2030), China is positioning itself as a premier investment destination for "future industries," specifically targeting breakthroughs in generative AI, quantum computing, and advanced manufacturing. Although annual growth is projected to moderate toward the 4.0–4.5% range in the coming years, the strategic pivot toward domestic consumption and a modernized industrial system suggests that China will remain a central, albeit more complex, engine of global expansion and a critical frontier for long-term strategic investment.

22-01-2026

GDP Snapshot

China’s robust economic growth in 2025, estimated at approximately 5.0%, is primarily anchored in its strategic pivot toward high-tech manufacturing and the clean energy sector, which now contributes roughly 10% of the national GDP. Industrial output has been a decisive driver, with manufacturing growth rising by 6.2% year-on-year in the final quarter of 2024 and maintaining momentum through 2025. The "New Three" industries—electric vehicles (EVs), lithium-ion batteries, and solar products—have become central to this expansion, with solar cell exports alone surging by 73% in early 2025. Furthermore, net exports contributed a significant 30.3% to GDP growth in 2024, the highest share since 1997, as Chinese producers successfully diversified into new markets across ASEAN and the Global South to offset shifting trade dynamics with the West. This industrial strength is supported by massive research and development investment, which reached RMB 2.7 trillion in strategic emerging industries in 2024, representing a 21.8% annual increase.

Future growth is projected to remain resilient as China executes its 15th Five-Year Plan (2026–2030), which prioritizes technological self-reliance and the "low-altitude economy" alongside advanced fields like generative AI and quantum computing. While growth may moderate to a range of 4.0% to 4.7% by 2026 and 2027, the government is shifting its focus toward "high-quality development" and structural reforms aimed at boosting domestic consumption. Significant infrastructure upgrades are underway, with intelligent computing capacity projected to reach 1,037.3 EFlops by the end of 2025, a 40% year-on-year increase that secures China`s global leadership in AI hardware. Additionally, a thawing of trade tensions, exemplified by the late 2025 agreement to reduce effective U.S. tariffs to approximately 30%, has led major financial institutions to raise their long-term growth forecasts for the Chinese economy. The continued expansion of the middle class and a government-led transition from speculative real estate to urban renewal are expected to provide stable, long-term internal drivers for the coming decade.

22-01-2026

Trade Surplus

China’s trade surplus reached a historic milestone in 2025, surpassing 1 trillion USD for the first time to reach an estimated 1.076 trillion USD, a 21.7% increase from the previous year. This widening gap is driven by a divergence between surging export volumes and stagnant domestic import demand; while exports grew by approximately 5.7% to 5.9% through late 2025, imports remained lackluster, growing by only 0.1% in yuan terms or even contracting by 0.6% in dollar terms. A primary reason for this robust growth is the "vent-for-surplus" strategy, where Chinese firms have redirected excess industrial capacity to global markets due to weak domestic consumption and a cooling property sector. High-value tech sectors have been particularly dominant, with electric vehicle exports exceeding 5 million units in 2025—up from 2.7 million in 2023—and high-tech industries now accounting for over 40% of the total surplus. Strategic market diversification has also played a crucial role, as a 15% to 27% surge in shipments to ASEAN and Africa has more than offset an 18% to 28% decline in direct exports to the United States caused by trade restrictions.

Looking toward 2030, analysts project that China`s share of global exports will continue to rise from its current 15% to approximately 16.5% as it solidifies its lead in "future industries" like robotics, advanced semiconductors, and green energy technologies. While the annual trade surplus is expected to face headwinds from global protectionist measures and a potential 50% appreciation of the Renminbi over the next five years, it is forecast to remain at elevated levels. Econometric models suggest that while monthly balances may fluctuate around 111 billion USD in the near term, the long-term current account balance is projected to reach approximately 390.8 billion USD by 2030. This persistent surplus will be anchored by China`s "Made in China 2025" and 15th Five-Year Plan initiatives, which aim to reduce dependence on foreign inputs and replace them with domestic high-tech manufacturing, thereby keeping import growth structurally lower than export expansion for the remainder of the decade.

22-01-2026

Metals Dominance Strategic Use of Commodity Dominance

China’s dominance in the silver market has shifted from a background role to a central strategic force. As of late 2025, China is the world`s second-largest mine producer, with 2024 output reaching 3,300 metric tons (approx. 106 million ounces), accounting for 13% of global mine supply. However, its true power lies in refining and processing. China currently controls between 65% and 70% of the world’s refined silver supply. This mid-stream bottleneck allows Beijing to dictate the flow of the metal to the global market, a reality reinforced by its announcement of a new export licensing regime effective January 1, 2026.

The country’s internal demand is a primary driver of the current global structural deficit, which reached an estimated 230 million ounces in 2025. China’s industrial base "inhales" silver to support its green energy transition; it produces over 80% of the world’s solar panels, with each unit requiring roughly 20 grams of silver. In 2024, global solar-related silver demand surged to 243.7 million ounces, a 158% increase over four years, largely concentrated in Chinese factories. Additionally, China’s massive electric vehicle (EV) sector consumes significant volumes, as EVs require 25 to 50 grams of silver per car—nearly double that of internal combustion vehicles.

Strategically, China has moved to protect its domestic supply as inventories in Western vaults like the LBMA and COMEX hit multi-year lows. In 2025 alone, silver prices surged by 150% to 180%, driven by what analysts call a "squeeze with Chinese characteristics." While China exported roughly 4,600 tonnes in early 2025 to cover global shortages, its new licensing rules will limit future exports to a small group of state-approved firms. This shift effectively weaponized silver, treating it as a strategic asset similar to rare earth metals, ensuring that Western high-tech manufacturers must negotiate with Beijing to secure their energy transition.

The outlook through 2030 suggests a tightening "silver noose" as industrial demand continues to outpace supply. Global solar capacity is projected to reach 1,000 gigawatts by 2030, which could add another 150 million ounces to annual demand. Meanwhile, mine production is forecast to remain stagnant or even decline to 901 million ounces by 2030 due to falling ore grades. Analysts predict silver prices could range between $77 and $325 per ounce by 2030, depending on the severity of supply shocks. As China continues to lead in AI infrastructure and EV production, its role as the gatekeeper of refined silver will likely grant it unprecedented pricing power over the next five years.

22-01-2026

Rare Earth Metal

China’s dominance over rare earths and critical minerals is backed by hard numbers rather than just policy intent. Currently, China accounts for about 60–70% of global rare earth mining, but more importantly 85–90% of rare earth processing and separation capacity. For specific minerals highlighted in the image, China’s control is even more concentrated: gallium (~98%), magnesium (~95%), tungsten (~83%), bismuth (~81%), graphite (~79%), and rare earth elements (~69%) of global production. In rare earth magnets, which are the highest value-added segment, China controls nearly 90% of global NdFeB magnet production, making downstream industries far more dependent than raw mining data alone suggests.

Demand growth over the rest of this decade sharply amplifies this leverage. Global rare earth demand is expected to rise from roughly 240,000 tonnes (2024) to around 350,000– 400,000 tonnes by 2030, driven primarily by electric vehicles, wind energy, and defence systems. EV demand alone could consume 35–40% of total rare earth magnet output by 2030, up from about 20% today. Similarly, graphite demand for batteries is projected to grow at 15–20% CAGR, while gallium and germanium demand for semiconductors and power electronics could double by the end of the decade. With China still controlling over 70% of refined output in most of these materials, price-setting power remains largely in its hands.

By 2030, China’s share of mining may decline modestly as projects in Australia, the US, and Africa come online, potentially reducing China’s mining share to around 50–55%. However, in processing and refining, China is still expected to retain 65–75% market share, as alternative facilities are expensive, slow to permit, and face environmental resistance. Even with aggressive Western investment plans, non-China processing capacity is unlikely to exceed 25–30% of global needs by 2030, leaving supply chains structurally exposed.

Overall, conditions till 2030 point to continued strategic tightness in rare earth and critical mineral markets. Periodic export controls, stockpiling, and policy-driven disruptions could cause 20–50% price swings during supply stress events, especially in gallium, graphite, and magnet-grade rare earths. While diversification will improve supply security at the margin, China’s dominance will remain a defining feature of global energy transition, defence readiness, and high-tech manufacturing throughout this decade.

22-01-2026

China Major Trade Destinations

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Trade War Eagles free fly under Dragon control

The 2025 US-China trade war marks a pivotal escalation in global economic decoupling, shifting from targeted sanctions to a broad, systemic confrontation. Initiated in early 2025 with the implementation of the "Liberation Day" tariff schedule, the conflict saw US import duties on Chinese goods peak at an unprecedented 125% to 145% under the International Emergency Economic Powers Act, prompting immediate retaliatory tariffs from Beijing of up to 125% on American agricultural and energy exports. While a diplomatic truce in mid2025 eventually stabilized effective rates at approximately 30%, the shockwaves redefined global trade patterns, causing US exports to China to plummet by 12% and pushing China to redirect its industrial output toward the Global South. Despite this friction, China’s global trade surplus surpassed $1 trillion for the first time in late 2025, underscoring a "game" that has largely favoured Beijing’s move toward technological self-reliance and market diversification over Western dependency.

There is sharp structural shift in trade performance and strategy after 2025. Before the trade war period (2021–2023), the annual trade surplus ranged between 400 and 600 billion dollars, heavily dependent on the United States and the European Union as primary export destinations. Export composition was dominated by low-margin consumer goods, while the US absorbed around 19 percent of total exports. Foreign direct investment focused mainly on general manufacturing, R&D spending was limited to about 2.4 percent of GDP, and EV exports remained relatively low at 1.2 to 2 million units annually. Imports were growing at a moderate pace, largely driven by the real estate sector, and the economy functioned mainly as a final assembly hub in global supply chains.

By the end of 2025, the post-trade war landscape looks significantly different. The trade surplus surged to a record 1.076 trillion dollars, while the primary export markets shifted toward the Global South, including ASEAN, Africa, and Latin America. Export composition moved decisively toward high-technology sectors such as EVs, AI, and solar, reflecting an industrial upgrade. The US share of imports fell below 13 percent after plunging nearly 29 percent in 2025 alone, despite average US tariff rates settling in a high range of 30 to 47.5 percent. At the same time, FDI pivoted toward biotech, aerospace, green technology, and AI, supported by higher R&D investment of 2.69 percent of GDP, equivalent to more than 500 billion dollars.

Trade volumes and supply-chain positioning also indicate deeper transformation. EV export volumes expanded to over 6 million units, allowing the country to overtake Japan as a leading exporter. Import growth turned flat to negative at minus 0.6 percent due to import substitution and stronger domestic production. This shift reflects a transition from being a final assembly hub to becoming a regional supply-chain anchor, controlling upstream components, intermediate goods, and pricing power. Overall, the data suggests that trade pressure accelerated industrial upgrading, diversified markets, and reduced dependence on the US while strengthening technological and supply-chain resilience.

22-01-2026

Currency Stability

The stability of the yuan over the last few years, as seen in the relatively narrow USD/CNY range around 6.8–7.3, is largely the result of deliberate policy design rather than free-market forces. A key reason is active management by the central bank through a managed float system, where daily fixing, counter-cyclical adjustments, and state bank intervention smooth out volatility. This works like shock absorbers in a vehicle—external pressures such as US rate hikes or global risk-off moves are absorbed gradually instead of translating into sharp currency swings. Strong trade fundamentals also matter: persistent trade surpluses of 400– 600 billion dollars earlier and over 1 trillion dollars more recently provide a steady inflow of foreign currency, offsetting capital outflows and supporting the exchange rate.

Another pillar of stability is capital control and structural demand for yuan. Unlike fully convertible currencies, cross-border flows are regulated, which reduces speculative attacks and sudden exits. At the same time, rising use of the yuan in trade settlement, energy contracts, and bilateral agreements has created steady transactional demand. High foreign exchange reserves, consistently above 3 trillion dollars, act as a credibility anchor, reassuring markets that authorities have the firepower to defend the currency if needed. Even during periods of economic slowdown or property sector stress, this combination of controls, reserves, and trade surpluses has prevented disorderly depreciation.

Expectations ahead over the next five years, the most likely scenario is continued rangebound stability rather than a sharp revaluation. In a base case, the yuan is likely to trade between 6.7 and 7.4 per dollar from 2026 to 2030, with mild depreciation pressure during global tightening cycles and stabilization when US rates ease. Structural factors such as slower GDP growth compared to the past and ongoing capital outflows may cap appreciation, but expanding high-tech exports, EV dominance, and wider use of the yuan in Global South trade should limit downside risks. In a more supportive scenario—if US rates fall meaningfully and domestic growth reaccelerates—the yuan could gradually strengthen toward the 6.5–6.7 zone. Conversely, in a stress scenario involving financial shocks or geopolitical escalation, temporary moves beyond 7.5 are possible, but sustained weakness is unlikely given policy intent. Overall, the next five years point to controlled stability rather than volatility, with the yuan functioning more as a managed trade currency than a speculative one.

22-01-2026

Chinese USA treasury Sell

China’s systematic reduction of its U.S. debt holdings is primarily driven by a strategic effort to diversify its foreign exchange reserves and insulate its economy from geopolitical risks. As of October 2025, China’s stockpile of U.S. Treasury securities fell to approximately 688.7 billion, a 17-year low and a significant decline from the 700.5 billion held just a month prior in September. This long-term downward trend is stark when compared to the peak of 1.32 trillion in November 2013, representing a nearly 48 percent reduction in exposure over the last decade.

Geopolitical tensions, particularly escalating trade hostilities and the use of financial sanctions, have accelerated this shift. Following the U.S. government`s aggressive tariff policies—which reached levels as high as 145 percent on certain Chinese goods in early 2025—Beijing has increasingly viewed its dollar-denominated assets as a vulnerability. By paring back its Treasury holdings, China seeks to mitigate the risk of its assets being frozen or "weaponized," a concern that intensified after the seizure of Russian central bank reserves in 2022. This strategy is reflected in China’s shift toward hard assets; for example, the country increased its gold reserves for 13 consecutive months through late 2025, reaching a total of 74.12 million ounces valued at over 310 billion.

Beyond defensive manoeuvres, the selling also stems from a domestic need to manage the value of the renminbi and maintain liquidity within its own banking system. While China’s total foreign exchange reserves remained robust at 3.34 trillion in October 2025, the composition of these assets is changing. Instead of reinvesting trade surpluses into U.S. government debt, Chinese state banks and the central bank are increasingly allocating capital toward other currencies like the euro and non-traditional assets. This rebalancing supports China`s broader goal of "de-dollarization," as seen in the declining share of the U.S. dollar in global reserves, which fell to a record-low 56.3 percent in mid-2025.

Gold Holdings - While the United States currently maintains the world`s largest official gold stockpile, China`s trajectory toward becoming the next global superpower may necessitate a significant expansion of its own reserves. Economic analysts suggest that a nation’s monetary backing is crucial for establishing global dominance and currency stability. Consequently, although official reports show a lower figure, there is widespread speculation that China’s unofficial holdings may actually exceed 5,000 tonnes, as the country strategically positions itself to challenge the existing financial hierarchy.

22-01-2026

Gold-Backed Yuan

A gold-backed yuan refers to China`s strategic initiative to link its currency (renminbi /yuan) to physical gold reserves. Unlike a traditional gold standard where currency can be directly exchanged for gold at fixed rates, China`s approach represents a more nuanced strategy combining physical gold holdings, trade settlement mechanisms, and financial infrastructure to enhance the yuan`s international credibility and usage.

Oil-Gold-Yuan Triangle

A particularly significant application involves China`s creation of yuan-denominated oil contracts convertible to gold: The Shanghai International Energy Exchange launched crude oil futures contracts denominated in yuan. These contracts include options for settlement in physical gold through the Shanghai Gold Exchange. Major oil producers like Russia, Iran, and Saudi Arabia have begun accepting yuan for oil shipments. This creates a "petro-yuan" alternative to the traditional "petrodollar" system. This triangular relationship between oil, gold, and yuan creates a powerful mechanism for increasing yuan usage in international trade while leveraging China`s position as the world`s largest oil importer.

Despite China`s substantial gold holdings, they remain insufficient for comprehensive currency backing: China`s estimated 5,000-7,000 tonnes of gold (including unofficial holdings) represents approximately $400-560 billion in value.Only a fraction of China’s $18 trillion economy and over $3 trillion in annual trade. Full convertibility would require substantially larger reserves or a much higher gold price. This reality means China must pursue a partial or symbolic gold backing rather than full convertibility in the traditional sense.

22-01-2026

De – Dollarization Efforts

China’s de-dollarization strategy is no longer a theoretical ambition but a multi-layered mechanical shift that reached significant milestones in 2025. This effort is built on three pillars: trade settlement, reserve diversification, and alternative payment infrastructure.

Trade Settlement and the Rise of the RMB
As of mid-2025, the Renminbi (RMB) has cemented its position as a major player in global trade finance. In 2024, cross-border RMB settlements in the Chinese mainland reached approximately 64.1 trillion RMB, a 23% increase year-on-year. By late 2025, the RMB maintained a steady share of roughly 2.9% in global SWIFT payments, ranking as the 6th most active currency. More tellingly, within China’s own borders, more than 50% of its bilateral trade is now settled in RMB, surpassing the US Dollar for the first time in 2023 and continuing to climb in 2025. This shift is driven by heavy usage in commodity trades with Russia, Brazil, and Middle Eastern partners.

Reserve Diversification and Gold Strategy

China’s central bank, the People’s Bank of China (PBoC), has systematically reduced its exposure to US Treasury debt. By October 2025, China`s holdings of US Treasuries dropped to a 17-year low of $688.7 billion, a massive decline from its 2013 peak of $1.32 trillion. To replace these assets, China has been on a gold-buying spree; as of November 2025, the PBoC reported its 13th consecutive month of gold additions, bringing its total reserves to 2,305 tons. Gold now accounts for approximately 8.3% of China`s total foreign exchange reserves, up from just 5.5% at the end of 2024, providing a "sanction-proof" buffer for its national wealth.

Digital Infrastructure: mBridge and CIPS

The most disruptive element of China`s plan is the development of the mBridge project—a multi-central bank digital currency (CBDC) platform. While the Bank for International Settlements (BIS) stepped back in late 2024, the project has entered its Minimum Viable Product (MVP) stage in 2025 with Saudi Arabia joining as a key participant. This system allows for "instant" cross-border settlement without the need for the US-led SWIFT network or the dollar as an intermediary. Combined with the Cross-Border Interbank Payment System (CIPS), which now services over 1,500 participating institutions globally, China is building a parallel financial "railway" that can operate entirely outside of US jurisdiction.

Forecast for 2030: Structural Fragmentation

By 2030, we expect the global financial system to be distinctly "bipolar." China’s government net debt is projected to hit 211 trillion RMB by 2030, and to manage this, the country will likely push for an even deeper integration of the RMB into the "Belt and Road" economies. Forecasts suggest the RMB could reach a 5% to 7% share of global payments by 2030, potentially overtaking the Japanese Yen and British Pound to become the world’s third-largest reserve currency. While the US Dollar will likely remain the dominant global unit, its "soft power" in trade invoicing is expected to erode, with up to 30% of global trade potentially shifting to non-dollar blocs led by the expanded BRICS+ group.

22-01-2026

15th Five Year Plan (2026-2030)

China’s 15th Five-Year Plan (2026–2030), formulated in late 2025 for official approval in March 2026, marks a decisive pivot toward a "smart economy" focused on high-quality development and strategic resilience rather than pure quantitative expansion. The plan prioritizes the cultivation of "new quality productive forces," targeting 90% artificial intelligence (AI) integration across major sectors by 2030 and establishing new pillar industries such as aerospace, bio manufacturing, and the low-altitude economy. To achieve global leadership and insulate against external shocks, China is doubling down on technological self-reliance in core fields like advanced semiconductors, quantum computing, and 6G, while simultaneously upgrading traditional manufacturing through automation and green digitalization.

Sustainability is a cornerstone of this period, with the government aiming to peak carbon emissions by 2030 through massive investments in renewable energy, hydrogen power, and nuclear fusion. Domestically, the strategy shifts toward a consumer-led economy by aiming to raise household incomes, expand the middle class, and bolster social welfare to make domestic demand the primary driver of growth. While emphasizing self-reliance, China maintains a "high-standard opening-up" policy, seeking high-quality foreign investment in advanced technology and services while integrating its "super supply chain" more deeply into global trade. Overall, the 2026–2030 plan is a blueprint for transforming China into a self-sufficient, innovation-driven superpower that balances rapid technological progress with a "silver economy" and environmental harmony

Impact on commodities - The 15th Five-Year Plan is fundamentally reshaping global resource demand. While traditional "bulk" commodities like iron ore face a plateau, "future-facing" minerals are entering a super-cycle driven by Chinese policy.

The "Iron Ore Ceiling": The plan introduces the Steel Output Regulation 2026–2030, which permanently caps crude steel production to meet carbon goals. This shifts China`s demand from high-volume iron ore to high-grade scrap metal and electric arc furnace technology, potentially ending the decade-long iron ore boom.

Green Metal Super-cycle: The plan prioritizes the "New Three" (EVs, Lithium, Solar). By 2030, China aims to control 85% of the refining for copper, lithium, and cobalt needed for the global energy transition. The Guangzhou Futures Exchange is designated as the global pricing hub for these "green metals," effectively taking pricing power away from London and New York.

Energy Sovereignty: A key pillar is the 16% Gas Storage Target. To hedge against geopolitical trade wars, China is mandated to manage 16% of its annual natural gas demand via domestic storage by 2030, which will keep global LNG prices elevated as China continues to build massive strategic reserves.

22-01-2026

Chinese National Debt to GDP Ratio

China’s economic landscape at the end of 2025 is defined by a historic $1.076 trillion trade surplus achieved in the first 11 months of the year, nearly doubling the $593.9 billion recorded a decade ago. While the nation`s GDP grew by 5.3% in the first half of 2025, reaching roughly $19.399 trillion for the full year, policymakers have set a more moderate average growth target of 4.17% for the 15th Five-Year Plan covering 2026 to 2030. This strategic shift aims to expand the national economy to 170 trillion yuan, or approximately $23.87 trillion, by 2030. To support this high-quality development, research and development spending has reached 3.63 trillion yuan, with a goal to increase R&D intensity beyond 3.2% of GDP over the next five years.

The financial sector has seen the 10-year government bond yield hit a record low of 1.596% in early February 2025 before stabilizing around 1.86% by December. Total social financing and broader debt metrics remain a focus, with central government debt rising to 28.8% of GDP in the third quarter of 2025, while total government debt is projected to trend toward 95% of GDP by 2027. Meanwhile, the commodity futures market reported a massive turnover of 427.5 trillion yuan for the year, with metal products like copper and aluminum contributing 19.4 trillion yuan and 7.3 trillion yuan respectively. These figures underscore a transition toward capital-intensive industries and a "security-first" economic model.

External trade dynamics show that while exports to the United States dropped by nearly 29% in 2025, China`s "New Three" high-tech exports—including electric vehicles and solar products—surged to over 40% of the total surplus. In fact, China exported more than 5 million motor vehicles in 2025, a significant rise from the 1.2 million units seen in 2021. To secure these industrial supply chains, the country is working toward managing 16% of its annual natural gas demand through domestic storage by 2030. Additionally, the freight and logistics market is estimated to grow from $1.31 trillion in 2025 to $1.78 trillion by 2030, reflecting a 6.27% compound annual growth rate as China deepens its trade ties with ASEAN and other Global South partners.

22-01-2026

Chinese Major Commodity Exchanges

China’s dominance in the global commodity market is defined by its dual role as the world’s largest consumer and an increasingly aggressive controller of the "mineral arteries" of the modern economy. As of late 2025, China refines an average of 70% of 19 out of 20 strategic minerals, including over 90% of the world’s graphite and 91% of rare earth elements, effectively holding the "on-off switch" for global EV and defense industries. This physical control is mirrored in the financial markets, where Chinese commodity exchanges have seen a surge in global influence. The Shanghai Futures Exchange (SHFE) reported an 11% increase in trading turnover to 48.87 trillion yuan (approximately 6.81 trillion USD) in early 2025, with products like gold, silver, and crude oil leading the volume. By late 2025, SHFE had opened 70% of its products to international investors, positioning itself as a primary price-discovery hub for base metals and energy, often creating significant "Shanghai premiums" that diverge from Western benchmarks in London or New York.

The strategic importance of these exchanges is bolstered by China`s move toward "commodity sovereignty" through the 15th Five-Year Plan, which integrates domestic exchange pricing with national export controls. In 2025 alone, the Ministry of Commerce Chinese Commodity Exchanges Shanghai (SHFE) Dalian (DCE) Zhenghou (ZCE) Guangzhou (GFE) imposed new restrictions on rare earths, lithium-ion battery components, and tungsten, causing international prices for specific compounds to soar by over 20% while domestic Chinese markets remained stable. These exchanges—including the Dalian Commodity Exchange for agricultural goods and the Zhengzhou Commodity Exchange for chemicals— now serve as critical instruments of economic statecraft, allowing China to leverage its 1 trillion USD trade surplus to influence global supply chains and inflation trends. As the world moves toward 2030, the shift from Western-centric "paper" trading to China-centric "physical" trading on these exchanges is expected to redefine the terms of global resource procurement and industrial security.

22-01-2026

Exchanges Turnover

China’s commodity exchanges—principally the Shanghai Futures Exchange (SHFE), Dalian Commodity Exchange (DCE), Zhengzhou Commodity Exchange (ZCE), and the newly formed Guangzhou Futures Exchange (GFE)—have evolved into the world`s most influential hubs for physical price discovery. In 2025, the combined trading turnover of these exchanges surged as China opened 70% of its domestic futures products to international participants, effectively challenging the historical dominance of Western benchmarks. The Shanghai Futures Exchange remains the leader in industrial metals, with its total monthly trading value reaching 24.93 trillion yuan (approximately 3.5 trillion USD) in November 2025, driven by record volumes in gold, copper, and silver. Simultaneously, the Dalian Commodity Exchange has solidified its role as a global agricultural and bulk material anchor, recording daily trading volumes exceeding 10 million lots in late December 2025, with iron ore and soybean meal accounting for a significant portion of the turnover. The Guangzhou Futures Exchange has emerged as the global "green exchange," with its lithium carbonate futures seeing a 17% monthly price rally in late 2025 and daily trading surges of 9% as it becomes the primary pricing mechanism for the global EV battery supply chain.

Future growth over the next five years (2026–2030) is projected to be driven by the 15th Five-Year Plan`s focus on "resource security" and "high-quality development," which aims to transition these exchanges from speculative arenas into strategic instruments of economic statecraft. Analysts forecast that trading volumes for green transition metals—including copper, aluminium, and tin—will see a compound annual growth rate (CAGR) of 5% to 10% through 2030 as China’s "dual-carbon" goals accelerate. While growth in traditional construction-linked commodities like steel may plateau, the "low-altitude economy" and AI infrastructure are expected to create massive new liquidity pools for advanced materials. By 2030, China`s move toward "commodity sovereignty" is anticipated to result in the renminbidenominated pricing of over 20% of global seaborne iron ore and energy trades, as the nation leverages its 1 trillion USD trade surplus to mandate the use of its domestic exchanges for international settlement.

The projections show a steady expansion in total turnover from 560 trillion RMB in 2025 to 804 trillion RMB by 2030, indicating a strong long-term growth trajectory. In 2025, growth is primarily driven by increased hedging activity linked to the “New Three” sectors—electric vehicles, solar, and related clean-energy industries—which require large volumes of commodity risk management. By 2026, turnover is expected to rise to 602 trillion RMB as international investor access expands, bringing in higher participation from foreign institutions and increasing liquidity across multiple commodity contracts.

Between 2027 and 2028, turnover is projected to grow from 647.2 trillion RMB to 695.7 trillion RMB, supported by structural changes in the market. In 2027, the development of the low-altitude economy, including drones and advanced materials, increases demand for new material futures. In 2028, a major driver is the gradual shift of iron ore pricing influence from global benchmarks like the LME toward domestic Chinese exchanges, strengthening onshore price discovery and boosting trading volumes

In the later years, turnover is forecast to reach 747.9 trillion RMB in 2029 and 804 trillion RMB in 2030, reflecting market maturity and global influence. The maturation of the Guangzhou Carbon market in 2029 supports higher activity in carbon and environmental products. By 2030, the market is expected to achieve global dominance in green metal pricing, positioning China as a key reference point for environmentally linked commodities and sustaining high turnover through deeper participation and diversified products.

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Investing in China

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Top Chinese Stock returns for more than 100% over last 3 years –

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Themes and Stocks to watch –

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Semiconductors and high tech -

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Energy Transition

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Biotech Innovation

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China SOE vs. Private Enterprises (POE) Comparison (Jan 2026)

State-owned enterprises (SOEs) are generally better for capital preservation, steady returns, and dividends. They dominate strategic sectors like banks, energy, telecom, railways, coal, and power, where competition is limited. Many large Chinese SOEs trade at low valuations (5–8× earnings) and offer dividend yields of 5–8%, which is high by global standards. During economic slowdowns, SOEs tend to outperform because they receive policy support, cheaper funding, and guaranteed projects. For example, between 2019 and 2024, SOE-heavy indices delivered more stable returns with lower drawdowns compared to private-sector indices. However, upside is usually capped, and long-term returns often track GDP growth (4–5% real) rather than exponential growth.

Private companies, on the other hand, are better suited for investors seeking higher growth and multibagger opportunities. They dominate innovation-led sectors such as EVs, AI, ecommerce, consumer brands, biotech, and semiconductors. Successful private firms can grow revenues at 15–30% annually, far above SOEs. Examples include EV makers and internet platforms that expanded market share rapidly in the past decade. The downside is higher volatility and regulatory risk, as seen during China’s tech crackdown when valuations fell 50–70% in some cases. Private companies also face higher financing costs and sharper earnings cycles.

22-01-2026

The recent surge in the CSI 300 Index, which represents the top 300 stocks on the Shanghai and Shenzhen exchanges, is primarily driven by a "structural bull" sentiment fueled by technological breakthroughs and aggressive policy support. As of January 12, 2026, the index climbed to approximately 4,789.92, marking its highest level in four years and reflecting a significant 26.35% increase over the past twelve months. This rally gained momentum in late 2025, with the index rising 3.04% in the last four weeks alone. A major catalyst has been the rapid advancement in Artificial Intelligence (AI), with flagship developments like DeepSeek and breakthroughs in semiconductor manufacturing re-rating the valuation of the tech sector.

Beyond technology, broader economic indicators have shown signs of stabilization. China`s real GDP growth for 2026 is projected at 4.8%, slightly above market consensus, supported by a resilient export sector and a narrowing drag from the property market. Investor confidence has further been bolstered by substantial liquidity injections, including a CNY 500 billion swap facility for financial institutions and CNY 300 billion in special re-loans for stock repurchases. Additionally, the migration of household deposits into the equity market—estimated at nearly 7 trillion yuan in excess savings—has provided a steady stream of domestic capital, pushing total market trading values above the 400 trillion-yuan threshold for the first time in 2025.

22-01-2026

Hang Seng Index

The growth observed in the Hang Seng Index is primarily driven by a significant recovery in market sentiment and the rollout of aggressive monetary and fiscal stimulus from the Chinese mainland. After a four-year slump between 2020 and 2023, the index rebounded with an 18 percent gain in 2024, followed by a surge of 27.7 percent in 2025. This momentum has been fueled by record-breaking southbound capital inflows, which reached a net total exceeding HKD 1.38 trillion by the end of 2025. Liquidity was further bolstered by the Federal Reserve`s decision to implement three interest rate cuts totaling 75 basis points in late 2025, which lowered borrowing costs and encouraged a global reallocation of assets toward Asian markets.

At the corporate level, earnings growth has accelerated as technology companies capitalize on the artificial intelligence boom. For instance, the Hang Seng TECH Index stood out as leading internet companies integrated AI upgrades into their platforms, contributing to an overall market capitalization of HKD 48 trillion by November 2025, a 41 percent increase year-on-year. Domestic economic indicators in Hong Kong also supported this trajectory, with real GDP growing by 3.8 percent in the third quarter of 2025. Average daily turnover on the exchange rose to nearly HK$260 billion in 2025, reflecting a 95 percent increase from previous levels, as investor confidence returned amid a stabilizing residential real estate market and a 13.8 percent rise in total export value.

Outlook for the Next 5 Years The outlook for the next five years is characterized by a transition from valuation recovery to sustained earnings-driven growth. For 2026, major institutions like HSBC and Standard Chartered have set targets for the Hang Seng Index between 28,000 and 31,000 points. Analysts expect corporate earnings growth to accelerate from 4 percent in 2025 to roughly 8 percent or 9 percent annually through 2027. This long-term expansion is expected to be anchored by the following themes:

Technological Maturation: The "DeepSeek" effect and breakthroughs in AI and smart manufacturing are projected to move from the investment phase to the monetization phase by 2027-2028, justifying higher price-to-earnings multiples.
Monetary Policy Tailwinds: With the Fed expected to continue its easing cycle into 2026, potentially lowering the policy rate to 3.00%–3.25%, the interest rate differential between the US and China will likely remain favorable for emerging market inflows.

Structural Reforms: China`s "anti-involution" policies and supply-side reforms are expected to reduce wasteful competition and improve profit margins for industry leaders over the next five-year planning cycle.

Valuation Re-rating: While the current forward P/E ratio sits around 11.8x, a sustained exit from deflationary pressures could lead to a more aggressive re-rating toward 2027 and 2028, potentially pushing the index toward the 35,000–40,000 range by the turn of the decade.

22-01-2026

Chinese satellites

As of 2025–26, China has around 1,000–1,100 active satellites in orbit, making it the second-largest satellite operator globally after the US. This fleet includes navigation satellites under the BeiDou system (around 45 satellites), Earth-observation satellites for weather, agriculture, and surveillance, communications satellites, and a large number of military and dual-use platforms. Over the past five years alone, China has more than doubled its satellite count, supported by frequent launches using Long March rockets and growing participation from state-linked commercial space firms.

Looking ahead to 2030, China’s satellite numbers are expected to rise very sharply, driven mainly by large low-Earth-orbit (LEO) internet constellations. The government-backed Guowang project alone targets about 13,000 satellites, while the Qianfan (Thousand Sails) constellation plans roughly 15,000 satellites by the end of the decade. If even part of these plans materialize, China could have 20,000–30,000 satellites in orbit by 2030, rivaling or exceeding US commercial constellations. This expansion is aimed at global broadband coverage, stronger military communications, space-based intelligence, and reducing reliance on foreign satellite infrastructure.

22-01-2026

Barbell Strategy

Best approach for China: a barbell strategy works best. Allocate 50–60% to high-quality SOEs for dividends, stability, and downside protection, and 40–50% to selected privatesector leaders for growth. This combination captures China’s policy-backed stability while retaining exposure to innovation-driven upside, which is essential for outperforming through 2030 and beyond.

22-01-2026

Investment in China from India -
Expected Equity Market Returns Short-Term (2026): Morgan Stanley expects the MSCI China index to stay relatively stable. Further upside will be driven by earnings growth, which is projected at approximately 6% year-on-year for 2026.

Sector-Specific Gains: High-tech sectors, particularly those aligned with the 15th Five-Year Plan (AI, semiconductors, and green tech), are expected to outperform traditional sectors like real estate. For example, AI chip designers and manufacturers in China saw gains of 50% to 120% in late 2025, a trend expected to persist into 2026.

Economic Growth Projections (GDP) The expected returns on equity will likely track China`s real GDP growth as it transitions to a "high-quality" model: 2026 Forecast - GDP growth is projected to moderate slightly to between 4.4% and 4.8%. 2027 Forecast - Estimates suggest a growth rate of roughly 4.7%. Long-Term 2030 - The Chinese government targets a total GDP of 170 trillion yuan by 2030, implying a steady annual growth rate of 4% to 5% over the next five years.

22-01-2026

Chinese government more prone to focus on service sector –

As domestic purchasing power continues to grow, we anticipate a transition in government support—moving away from its historical focus on manufacturing and toward the service industry. China GDP per capita $ 14,000, service sector is set to thrive for potential growth.

22-01-2026

Key Risk to consider before investing in China

Chinese financial markets operate under a tightly regulated framework, where authorities actively intervene to curb excessive speculation whenever systemic risks emerge. Regulatory actions such as tighter margin rules, trading curbs, or capital controls have historically been deployed to stabilize volatility, particularly in equities, commodities, and real estate. This policy stance has become more pronounced amid the prolonged property sector downturn. Real estate, which once contributed nearly 25–30% of China’s GDP including ancillary industries, remains under stress, with new home sales still down by around 20–25% from pre-pandemic levels and major developers continuing to face liquidity constraints. Despite targeted stimulus measures, the sector has yet to achieve a sustained recovery, weighing on broader economic confidence.

At the same time, persistent overcapacity across key manufacturing sectors has intensified China’s reliance on external demand. Industrial capacity utilization has hovered near 74– 75%, well below optimal levels, leading to aggressive price competition both domestically and globally. Export-oriented industries such as steel, solar modules, electric vehicles, and chemicals have witnessed price declines ranging from 10–30% over the past two years, significantly compressing margins. As a result, corporate profitability has weakened, with industrial profits declining by approximately 5–7% year-on-year in recent data, increasing dependence on state support, subsidies, and policy-backed financing to maintain operations and employment.

Consumer demand remains another structural challenge. Household confidence has yet to fully recover from the pandemic era, with retail sales growth decelerating sharply to low single digits, compared to double-digit growth pre-2020. Youth unemployment remains elevated near 14–15%, constraining discretionary spending, while savings rates remain high as households adopt a precautionary stance. Several service and small-scale manufacturing industries continue to operate below pre-Covid capacity, reflecting uneven recovery dynamics. Additionally, rising geopolitical tensions and disruptions in global energy markets pose further risks. China imports over 70% of its crude oil needs, and tighter supply conditions from key producing regions could elevate import costs, adding pressure to trade balances and domestic inflation. Collectively, these factors suggest that while policy support remains strong, China’s growth outlook faces structural headwinds that may take multiple years to normalize.

22-01-2026

President America!!! Convergence or diversion -

President Donald Trump has centered his foreign policy on a "restored" world order rooted in "America First" realism, which fundamentally rejects the post-Cold War model of global leadership. This vision, outlined in his 2025 National Security Strategy, aims to transition the United States from a global "policeman" to a dominant regional power that prioritizes national sovereignty and economic security over international cooperation. By focusing on a transactional "peace through strength" approach, Trump seeks to define clear spheres of influence, effectively demanding that allies provide for their own defence while the U.S. reasserts total authority over its own hemisphere.

The core of Trump’s interest in this new order is driven by a desire to secure economic and territorial primacy while insulating the American public from foreign entanglements. Central to this strategy is the "Trump Corollary" to the Monroe Doctrine, which treats the Western Hemisphere as an exclusive American domain where foreign influence from rivals like China and Russia is strictly prohibited. For Trump, restoring order is a means to re-shore American industry, gain a monopoly on regional resources, and utilize hard power to resolve domestic crises such as mass migration and drug trafficking. Ultimately, his interest lies in creating a world where American strength is used for direct national gain rather than the maintenance of universal democratic norms.

22-01-2026

President Trump’s second term (2025–26), characterized by the simultaneous use of military force and economic leverage. The past 12 months indicate a departure from a primarily deterrence-based posture toward more frequent, geographically dispersed actions. Military interventions and economic measures are deployed as complementary tools, signalling a clear intent to protect US strategic interests, enforce compliance, and reassert global influence.

On the security front, the United States has undertaken targeted military actions across several high-risk regions, including Syria, Iraq, Yemen, Somalia, Nigeria, and Venezuela. These operations are largely concentrated in geopolitically sensitive zones such as the Middle East and key maritime corridors, notably around the Red Sea, reflecting an emphasis on securing trade routes and countering adversarial influence, particularly from Iran and its regional proxies. Rather than large-scale deployments, the approach relies on precision strikes and limited engagements aimed at deterrence and rapid escalation control.

In parallel, economic statecraft has been employed aggressively through tariffs, sanctions, and regulatory actions. China remains a primary focus, facing higher tariffs and tighter export restrictions, reinforcing a hard-line stance on trade and technology. Russia is targeted through sanctions on oil companies, increasing pressure on its energy sector. Notably, tariff actions extend beyond adversaries to include major emerging economies such as India and Brazil, underscoring a transactional approach to trade policy. Broad-based tariff measures across a large number of countries further suggest a willingness to absorb global economic friction in pursuit of domestic and strategic objectives.

Looking ahead, continuation of this policy framework is likely to heighten geopolitical and economic uncertainty. Expanded use of sanctions and tariffs may accelerate trade fragmentation and encourage the formation of alternative economic blocs, while sustained military actions risk retaliation or proxy escalation, particularly in the Middle East. For global markets, this environment implies elevated risk premiums, increased volatility in commodities and currencies, and a structurally more uncertain outlook for emerging markets with high exposure to US trade and geopolitical policy shifts.

22-01-2026

Nominate Mr. President America for Nobel Prize – potential hopes of final peace!!!!

Prestige, Power, and the Dynamics of Modern Diplomacy

Countries supporting Mr. President America for Noble Prize -

22-01-2026

Davos and NATO

At the World Economic Forum in Davos, President Donald Trump delivered a long, highprofile address and then held a key bilateral meeting with NATO Secretary-General Mark Rutte, which shaped several outcomes. First, Trump withdrew his threat to impose tariffs on eight European countries that had opposed his controversial push for U.S. control over Greenland — tariffs that were scheduled to begin on February 1 — after agreeing with Rutte on a “framework of a future deal” relating to Greenland and broader Arctic security cooperation. Trump framed this as beneficial to both the United States and its NATO partners and said talks would continue about a project he calls the “Golden Dome” missile defence system in the Arctic. However, details of the framework remain vague, and Denmark reiterated it will not negotiate on sovereignty over Greenland, underlining that Greenlanders independence decisions rest with Denmark and Greenland itself.

Trump’s speech stirred controversy beyond the Greenland issue. He publicly questioned NATO’s reciprocal commitment to U.S. defense, saying the United States has “never gotten anything” from its long support for the alliance and expressing doubt whether allies would ISRAEL PAKISTAN CAMBODIA ARMENIA AZERBAIJAN MALTA DEMOCRATIC REPUBLIC OF CONGO VENEZUELA (POTENTIAL ) come to the U.S.’s aid if attacked. This rhetoric highlights ongoing strains in transatlantic relations and reinforces his transactional view of alliances.

Why the U.S. Is Perceived as stepping Back from NATO? Trump’s remarks at Davos reflect a broader strategic shift away from traditional, post-Cold War U.S. leadership within NATO. He has repeatedly criticised NATO for unequal burden-sharing, arguing that European countries benefit disproportionately from U.S. security guarantees while under-investing in their own defense. This is not a change invented at Davos — the United States currently contributes about 16 % of NATO’s common funding, with other members also meeting agreed spending targets — but Trump frames it as unfair and unsustainable.

Burden-Sharing Frustration: Trump’s messaging suggests the U.S. might condition its commitments on allies meeting specific defense spending benchmarks — a transactional rather than collective interpretation of NATO’s security pact. He has signalled that allies might be expected to shoulder more responsibility for their own defense if they want U.S. protection.

Alliance Skepticism: By publicly questioning NATO’s Article 5 obligations (the mutual defense clause) and suggesting the U.S. may not automatically rely on or extend support unless allies meet certain conditions, Trump is signalling a less automatic U.S. defense commitment to European members than in prior administrations.
Strategic Reorientation: The administration is emphasising bilateral leverage and economic tools like tariffs as negotiating levers, rather than traditional collective security frameworks. In Trump’s worldview, NATO cooperation is valuable only if it clearly advances U.S. national interests first.

Alliance Skepticism: By publicly questioning NATO’s Article 5 obligations (the mutual defense clause) and suggesting the U.S. may not automatically rely on or extend support unless allies meet certain conditions, Trump is signalling a less automatic U.S. defense commitment to European members than in prior administrations.

Immediate Market and Diplomatic Impacts: The Davos developments eased some market volatility that had arisen from the Greenland-tariffs dispute, as investors saw the tariff withdrawal and the vague security “framework” as de-escalatory. European capitals broadly welcomed the removal of tariff threats, though tensions over alliance trust remain

The outcomes of Trump’s Davos engagement and the renewed U.S. skepticism toward NATO indirectly strengthen China’s strategic position in both geopolitics and global diplomacy. As the U.S. questions alliance guarantees and signals conditional commitment to NATO, European strategic uncertainty increases, creating space for China to position itself as a more predictable long-term partner in trade, infrastructure, and diplomacy. Data already shows this shift: China–EU trade crossed USD 850 billion in 2024, making China the EU’s largest or second-largest trading partner depending on methodology, while Chinese investment in Central and Eastern Europe under Belt and Road projects exceeds USD 90 billion cumulatively. A perceived U.S. pullback from collective security also diverts Washington’s focus inward and toward bilateral disputes, allowing China greater room to consolidate influence in the Indo-Pacific, Arctic shipping routes, and global institutions without immediate coordinated Western pushback. However, it also accelerates European defense autonomy, which over the long term could reduce Europe’s economic dependence on China—making the impact strategically positive for China in the short to medium term, but more competitive and complex over the next decade.

22-01-2026

Executive Summary

China is entering a decisive phase of economic transformation, shifting from high-speed, debt-intensive growth toward a model centred on strategic control, technological selfreliance, and supply-chain dominance. While headline GDP growth is moderating from past decades, the quality, composition, and geopolitical leverage of that growth are strengthening. Real GDP growth is estimated at ~5.0% in 2025 and is expected to stabilize in the 4.0–4.5% range during 2026–2030, aligning with the objectives of the 15th Five-Year Plan. This transition positions China not as a cyclical growth story, but as a structurally embedded pillar of global trade, commodities, and industrial production.

A defining feature of this new phase is China’s record trade surplus, which surpassed USD 1.07 trillion in 2025, the largest in modern economic history. Unlike earlier cycles driven by low-margin consumer goods, the current surplus is increasingly powered by hightechnology exports, with electric vehicles, lithium-ion batteries, and solar products contributing more than 40% of surplus growth. Net exports accounted for over 30% of GDP growth in 2024, the highest level since 1997, underscoring China’s successful redirection of industrial capacity toward the Global South as trade frictions with the US and Europe persist. By 2030, China’s share of global exports is expected to rise from ~15% to ~16.5%, reinforcing its role as the world’s primary manufacturing and supply-chain anchor.

China’s strategic leverage is most evident in commodities and critical minerals, where dominance extends well beyond mining into refining, processing, and pricing power. The country controls 65–70% of refined silver, 85–90% of rare-earth processing, and over 90% of graphite and magnet-grade rare earth supply, allowing it to influence global cleanenergy, defence, and semiconductor supply chains. Export controls, licensing regimes, and domestic exchange pricing are increasingly used as instruments of economic statecraft. As the global energy transition accelerates, this control is expected to intensify commodity tightness through 2030, creating structurally higher prices and recurring supply shocks.

Financially, China is pursuing controlled stability rather than liberalization. The renminbi remains a managed trade currency, supported by persistent surpluses, capital controls, and foreign exchange reserves exceeding USD 3 trillion. At the same time, China is actively reducing exposure to US financial dominance. Holdings of US Treasuries have fallen to ~USD 689 billion, nearly 50% below the 2013 peak, while gold reserves have risen steadily, now exceeding 2,300 tonnes officially. Parallel payment infrastructure such as CIPS and mBridge is gradually reducing reliance on dollar-based settlement systems, supporting long-term dedollarization without triggering near-term financial instability.

From an investment perspective, China is evolving into a barbell market. State-owned enterprises (SOEs) offer stability, dividends, and policy-backed earnings in strategic sectors such as energy, banking, telecom, and infrastructure, while select private companies drive innovation in AI, semiconductors, EVs, biotech, and advanced manufacturing. Equity markets entered a structural recovery phase in late 2025, supported by liquidity injections, improving earnings visibility, and excess household savings rotating into equities. Over the medium term, returns are expected to be earnings-driven rather than valuation-driven, favouring disciplined sector selection over broad index exposure.

While China’s growth remains sustained, maintaining this momentum requires addressing localized structural challenges. Furthermore, geopolitical tensions with the United States— driven by shifting diplomacy and a revised economic order—pose significant risks. Potential global consumption slumps and a reconfiguration of trade with allied nations remain critical threats to China`s long-term growth trajectory

Looking toward 2030, China is likely to remain the central node of global trade, commodities, and industrial technology, even as geopolitical fragmentation deepens. While risks persist—particularly around demographics, local government debt, and external trade retaliation—the data suggests that China has converted external pressure into accelerated industrial upgrading and strategic resilience. For long-term investors, China represents not a simple growth bet, but a systemic power shift that will continue to shape global markets, supply chains, and capital flows throughout the remainder of this decade.

22-01-2026

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