China – enough for 2026, but not 2027

From the perspective of a government that wants to meet a 2026 growth target without having to shift policy, the September data are encouraging. But the 2027 outlook for the domestic economy is looking more challenging. That will become more visible if global demand and price trends change.

Paul Cavey

Oct 19, 2026 • 3 min read

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East Asia in Four Charts

Highlights of last week's indicators: China's import shortfall, loose financial conditions in Japan, rising export prices in Korea, and more evidence of labour market tightness in Taiwan.

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Last week, next week

With regional macro dependent on continuation of the US AI build-out, the equity sell-off last week matters. That said, there are still complications: TSMC still sounds very bullish, and while for bad economies, it isn't clear that an end of the AI cycle would be so negative for currencies.

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East Asia Today

Some highlights of the chart pack I've been working on looking at the China Shock (and China Squeeze). The China Shock isn't over, with data today showing R&D spending reaching a new high of 2.8% of GDP in 2025. In Korea, the TOT rose further in September, and unemployment remained low.