China

Times of News | English | News | Jan. 5, 2026 | UndeterminedEconomic Growth

South Korea’s won weakened to a 16-year low against the dollar, trading around 1,443 to the dollar, even after the Bank of Korea (BOK) and government introduced measures to stabilize the currency. The depreciation has been partly driven by a two-percentage-point interest rate differential between South Korea and the U.S., leading to increased demand for dollars by Korean investors. BOK Governor Rhee Chang-yong stated that the recent exchange rate levels do not accurately reflect South Korea’s economic fundamentals, suggesting the won has been weakened by the National Pension Service’s (NPS) sales of won to fund overseas investments.

Rhee emphasized that while the appropriate exchange rate is difficult to pinpoint, the dollar-won rate in the upper 1,400s is significantly misaligned with the local economy. He warned against any U.S.-bound investments that could destabilize foreign exchange markets and urged the NPS to reconsider its overseas investment strategy to reduce market impact. On the first trading day of 2026, the won declined by 0.26% against the dollar.

Authorities have been implementing new tax incentives aimed at attracting foreign investment to support the won, alongside warnings against speculative trading. The government and the NPS have taken active steps to intervene in the forex market, with the NPS selling dollars to bolster the local currency. Economists forecast the dollar-won rate to stabilize between 1,450 in the short term and 1,430 over the longer term. Additionally, South Korea and the U.S. finalized a bilateral trade deal capping tariffs at 15%, with South Korea planning to fund a $350 billion U.S. investment pledge while limiting annual foreign currency outflows to $20 billion to protect the won.

证券类私募总规模连刷新高，2025年仍有逾500家管理人黯然离场

Sina Finance | Local Language | News | Jan. 5, 2026 | UndeterminedFinancial System Problems

In 2025, the total assets under management by securities private funds in China surpassed 7 trillion yuan for the first time, reaching 7.04 trillion yuan by November, marking an increase of 1.83 trillion yuan compared to the end of 2024. Despite this growth, a total of 523 securities private fund managers had their registrations canceled in 2025, slightly higher than the 518 cancellations in 2024.

Among the cancellations in 2025, voluntary withdrawals accounted for the majority at nearly 60%, followed by association-initiated cancellations at 34%, cancellations due to no products under management for 12 months at 6%, and one cancellation per announcement. Voluntary cancellations often stem from managers’ inability to sustain operations due to rising compliance and operational costs, as well as industry consolidation pressures, rather than purely voluntary choices.

Most canceled managers were long-established firms, with nearly 79% registered between 2014 and 2017. Some newer fund managers also deregistered, including a few established after 2022. As of December 31, 2025, 266 existing securities private fund managers had no products under management, mostly firms registered before 2023, reflecting ongoing challenges in sustaining active operations under stricter regulatory requirements.

Since the implementation of revised Measures in May 2023, which raised the entry threshold for private fund registration, new registrations have significantly declined, with only 159 completed filings from May 2023 to the end of 2025. Concurrently, the total number of active securities private fund managers has been decreasing, driven by a "strict entry, easy exit" policy and continuous industry cleanup efforts, including a sharp drop of 449 managers in one month in January 2023.

The industry is undergoing a large-scale reshuffle favoring high-quality, compliant firms. The exit of lower-quality managers is expected to concentrate resources such as talent and capital on stronger players, promoting specialization and professionalism and enhancing the overall competitiveness and sustainability of the securities private fund industry in China.

特稿｜2026，世界经济五问

Xinhua | Local Language | News | Jan. 5, 2026 | UndeterminedEconomic Growth

Entering 2026, the global economy faces a complex landscape shaped by geopolitical conflicts, protectionism, diverging macroeconomic policies, and technological disruptions. Major institutions like the IMF and OECD predict a slowdown in world economic growth due to uncertainties, protectionist barriers, labor imbalances, fiscal vulnerabilities, and financial market risks. However, some analysts foresee potential stability and growth acceleration driven by AI investment and supportive fiscal policies, though growth will remain uneven across regions. The U.S. economy shows signs of instability, while Asia, propelled by green transition investments and technology, is expected to maintain faster growth. Regional integration and South-South trade are anticipated to strengthen global economic dynamics.

Global trade faces headwinds as U.S. tariff policies and protectionism contribute to rising trade frictions and investment uncertainties. The WTO downgraded its global merchandise trade growth forecast for 2026 to 0.5%, citing the spread of trade restrictions and policy uncertainties. Companies are reevaluating supply chains with a shift toward regionalization and reshoring to enhance security over efficiency, making supply chains shorter and more localized in response to geopolitical risks.

Artificial intelligence investment is projected to surpass $2 trillion in 2026, profoundly impacting the global economy. While AI fosters productivity gains and new business models, it may also exacerbate income inequality and employment structure changes, leading to a “K-shaped” economic divergence in the short term. Long-term expectations suggest AI will broadly enhance labor productivity, drive industrial upgrading, and create new industries and jobs.

Monetary policies among major developed economies will diverge further in 2026. The U.S. Federal Reserve may ease credit, the European Central Bank is nearing the end of rate cuts, and the Bank of Japan may continue raising rates. These divergences, coupled with high public debt and rising bond yields in many developed countries, increase market uncertainty and risks of financial instability. The prominence of the U.S. dollar as the main reserve currency is increasingly questioned, with some economies accelerating efforts toward “de-dollarization.”

China’s economy is expected to demonstrate resilience in 2026, supported by strong institutional frameworks, a large market, a complete industrial system, and innovation. China’s 15th Five-Year Plan emphasizes building a strong domestic market, boosting investment in AI and technology, and advancing inward-demand-driven growth. China’s deep integration in global supply chains and ongoing reforms position it as a key driver of global trade and economic growth. International organizations have raised China’s growth forecasts, anticipating it to contribute around 30% to global growth, while it shifts toward more balanced, innovation- and green-focused development.