China’s real gross domestic product (GDP) growth is forecast at 4.3 per cent in 2026, within a range of 4.1-4.6 per cent, moderating from 2025 largely due to a high export base, according to JP Morgan. Policy support is expected to remain measured but accommodative. Fiscal policy is likely to stay expansionary, with the budget deficit hovering around 4 per cent of GDP, supplemented by lending from policy banks and expanded local government bond quotas.

Monetary policy is expected to focus on fine-tuning rather than aggressive easing. The People’s Bank of China is likely to rely on liquidity operations and reserve requirement ratio adjustments, while avoiding meaningful policy rate cuts to preserve banking sector profitability and financial stability, JP Morgan said in its 2026 Asia Outlook report.

Exports remain the dominant driver of growth, underscoring the uneven nature of China’s recovery. China’s export engine continues to outperform despite rising global protectionism. Real exports are on track to grow around 8 per cent in 2025, lifting China’s share of global exports to about 15 per cent. Exports to the US now account for less than 10 per cent of total shipments, reflecting China’s success in expanding sales across non-US markets.

China’s GDP growth is forecast at 4.3 per cent in 2026 as export-led momentum moderates, as per JP Morgan.
Policy support will remain accommodative, with fiscal expansion and cautious monetary fine-tuning.
Exports continue to drive growth despite rising protectionism and trade frictions.
A weaker yuan and growing AI investment are expected to shape China’s medium-term economic outlook.

While manufacturing capacity is gradually diversifying towards ASEAN and India, these regions remain heavily dependent on Chinese inputs and capital goods. This reinforces China’s central position in global supply chains, even as geopolitical tensions persist.

For global competitors, China’s export strength is intensifying pressure. Japan and South Korea are losing market share in several sectors, while Southeast Asian economies and India, despite export gains, are recording widening trade deficits with China. Replicating China’s manufacturing ecosystem remains difficult due to differences in scale, speed, and state-backed coordination.

Rising competitiveness has also fuelled trade frictions. Since 2024, several economies have introduced anti-dumping and countervailing measures on Chinese products. These barriers are expected to slow export growth in 2026, moderating China’s strongest post-pandemic growth driver, the report added.

Despite a trade surplus exceeding $1 trillion year-to-date, the yuan has weakened by about 4 per cent on a trade-weighted basis. Analysts see limited scope for sustained appreciation, given the managed exchange rate regime and concerns over export competitiveness and deflationary pressures.

Looking beyond traditional drivers, China is accelerating investment in artificial intelligence as a potential new growth pillar. Industry-wide AI and cloud capital expenditure is projected to exceed $70 billion in 2026. While the sector’s near-term impact on headline growth may be limited, it is expected to play an increasingly important role in shaping China’s economic trajectory beyond 2026.

Fibre2Fashion News Desk (SG)

State-owned Indian Railway Finance Corporation (IRFC) and the Dedicated Freight Corridor Corporation of India Ltd (DFCCIL), the special-purpose vehicle for rail freight corridors, recently signed an agreement to refinance ₹10,000 crore (~$1.11 billion) of World Bank foreign-currency loans.

DFCCIL had availed of the loans for the ₹51,000-crore (~$5.68 billion), 1,337-kilometre-long Eastern Dedicated Freight Corridor (DFC) from Punjab to Bihar.

The Indian Railway Finance Corporation and the Dedicated Freight Corridor Corporation of India Ltd (DFCCIL) have signed an agreement to refinance $1.11 billion of World Bank foreign-currency loans.
DFCCIL had availed of the loans for the $5.68-billion, 1,337-kilometre-long Eastern Dedicated Freight Corridor from Punjab to Bihar.
The government is expected to save $300.65 million in the process.

“This first-of-its-kind refinancing arrangement, structured in close coordination with the Ministry of Finance, Ministry of Railways, DFCCIL, IRFC, and the World Bank, is expected to result in savings of ₹2,700 crore [~$300.65 million] for the government of India,” DFCCIL said in a social media post.

“This transaction marks a significant milestone in lndia’s infrastructure financing landscape, underscoring the growing depth, maturity and capability of Indian financial institutions to support large-scale, long gestation critical infrastructure projects through domestic funding solutions,” an IRFC release said.

The refinancing covers existing IBRD loans. By shifting from foreign currency debt to rupee-denominated financing, DFCCIL will benefit from reduced exposure to exchange rate volatility, enhanced predictability in debt servicing, and closer alignment of long-term liabilities with its rupee-based revenue streams, thereby improving overall cash flow management, the release noted.

Fibre2Fashion News Desk (DS)

There is a strong demand in Sweden for clothing produced in a more sustainable way—especially clothing that avoids the most harmful production practices—consumers are generally unwilling to pay extra for garments that meet the very highest sustainability standards, as per a new study from the University of Gothenburg.

More than 1,700 respondents participated in the study, choosing between T-shirts with different levels of working conditions, health protection and environmental impact. Health risks linked to chemicals in clothing were ranked as the most important factor, followed by working conditions and, lastly, environmental impacts.

A study of over 1,700 Swedish consumers found strong support for avoiding poor clothing production practices, especially health risks from chemicals.
Consumers were willing to pay 60–85 SEK (~$5.50–~$8.00) more per T-shirt to avoid the worst standards, but few would pay extra for top sustainability levels.
Results support clearer EU labelling and targeted premium markets.

On average, consumers were willing to pay an additional 60–85 SEK (~$5.50–~$8.00) per T-shirt to avoid the poorest production standards. In contrast, willingness to pay for reaching the highest sustainability levels was low.

“There is a substantial willingness to pay to avoid the worst alternatives and to reach regulatory minimum standards, but relatively few consumers are willing to pay for further improvements,” said Daniel Slunge, researcher at the University of Gothenburg and co-author of the study.

The study was conducted both with consumers purchasing clothing for themselves and with parents purchasing clothing for their children. The pattern was similar across both groups.

The findings provide important insights for the ongoing development of the European Union’s Ecodesign Regulation, which will introduce more comprehensive product labelling and traceability requirements.

“Our results indicate that producers could cover a significant share of the cost increases associated with making their products more sustainable, if these improvements are clearly communicated to consumers,” said Anders Boman, co-author of the study. “While most consumers are not willing to pay beyond regulatory standards, there are consumer groups who prefer and are willing to pay for higher levels of sustainability. These groups may form an important target market for premium-certified products.”

Fibre2Fashion News Desk (RR)