Asia Views: 2026 Outlook – Coping with the China Shock

Goldman Sachs

Research

14 Pages

Goldman Sachs explains why Asia’s 2026 outlook hinges on whether domestic demand can pick up as China’s export machine stays strong. The paper argues many economies may need to rethink export led playbooks as China keeps more manufacturing at home. One spark is China’s roughly $1 trillion goods trade surplus and its willingness to use trade leverage.

Key Takeaways

China stays dominant: China aims to keep core manufacturing and technology, limiting spillover opportunities for neighbors.
Growth models diverge: Countries need distinct advantages such as services, commodities, or high tech to compete.
Policy support constrained: Rate cuts and fiscal easing can help, but sustainability and limited space cap the response.
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