Editor's note: In 2025, the global financial markets navigated through changing circumstances. The wave of industrial revolution driven by artificial intelligence has made non-ferrous metals, virtual assets, and other sectors the focal points of investment for the year, while Hong Kong stocks also rebounded amidst fluctuating trade tensions. As we enter 2026, what opportunities and challenges will the global economy face, and which sectors hold potential investment opportunities?
【Anchor】Hello everyone, welcome to DDN Business Insider. I am Yunfei Zhang. Looking back at 2025, artificial intelligence ignited an industrial revolution, and global financial markets searched for direction amid the upheaval. As we look forward to 2026, what new realities will the world economy confront? Which investment themes are poised to break through the pack? In the first episode of 2026, Zhang Ning, senior economist at UBS Investment Bank, Zhao Wenli, managing director and chief economist at CCB International, and Hu Dinghe, financial expert and visiting scholar at Harvard University, will share their investment outlook for 2026.Hello, everyone!
First, let's discuss the global macroeconomic outlook. I'd like to ask each of you to summarize your views in a few words. Let's start with Mr. Zhao.
From our outlook for the global economy in 2026, the overall growth momentum is likely to remain weak, especially for developed economies. The United States, as a representative of developed economies, may experience slightly better conditions in core European countries like Germany and France due to some fiscal stimulus plans this year, which could provide a modest boost to the economy next year. However, looking at the U.S., we see that recent employment market data and overall consumption figures are relatively weak. Thus, the overall economic momentum in the U.S. next year may not be very strong. Previously, U.S. economic support primarily came from capital expenditure and related investments in AI, but recent concerns about the return on AI investments and worries about future terminal demand have cooled down the overall market atmosphere for AI. Therefore, looking ahead to next year, we believe that, on one hand, the overall growth rate will not speed up significantly, and on the other hand, inflationary pressures will still be an uncertain factor looming overhead. With the recent transmission of tariffs to inflation in the U.S., we see that due to tariff delays, including wholesalers stocking up early and squeezing profits through intermediate links, combined with relatively weak terminal demand, the overall transmission of inflation has been slow. However, we cannot say that inflation is now on a clearly downward trend. We anticipate that inflation next year, at least in the middle or later half of the year, may rise further. From this perspective, we believe the risk of stagflation in developed economies remains relatively high. As for emerging economies, although growth may also slow compared to this year, the overall economic growth momentum might be gradually recovering, particularly in economies like China and India.
【Anchor】Great, now I'll hand it over to Mr. Zhang.
Looking at the global macroeconomic outlook for next year, we can summarize it with three key themes. First, slow-then-accelerating growth. Second, inflation may be high at first and then low later. Third, overall policy support remains. The term "weak growth at the beginning, strong later" primarily refers to the lingering impact of current tariffs, which will continue to pose challenges for the next couple of quarters, including for the U.S. and some major developed countries, as well as for China. However, as the impacts of tariffs gradually fade and policy support is realized, we believe that in the second half of next year, developed economies, including China, may see a slight acceleration in growth; this represents a "first weak, then strong" structure. The same is true for inflation, which is also under pressure from tariffs; thus, the inflation level in the U.S. may spike early next year and gradually decline after the second quarter. Other economies may experience slightly different inflation patterns. The third aspect concerns overall policy support. Without a doubt, the U.S. is likely to see two rate cuts next year, and the realization of fiscal policy measures may bring about some opportunities for fiscal expansion. This characteristic can also be observed in Europe and Japan.
【Anchor】Now, let's turn our attention to the domestic front. As we look forward to 2026, Mr. Zhang, what key terms do you think can summarize the main trends in China's macro-economy?
For China, we emphasize three important keywords: the first is uncertainty or challenges; the second is economic resilience; and the third is economic re-balancing. The so-called economic challenges mainly arise from two or three aspects. The first aspect is exports, which may face some pressure as this year's strong resilience is likely to slow down next year. At the same time, the downturn in our real estate sector continues, and it is expected that 2026 and 2027 will be two more years of declining sales, investment, and housing prices, although the pace of decline may slow. Regarding overall economic resilience, we believe that consumption may stabilize with a slight decrease but will maintain moderate growth. This is primarily because the incremental support from subsidies may not be as strong as this year, so the sales growth of subsidized products may slow down. However, structural support policies are being realized gradually, albeit over time, and thus their impact on consumption in 2026 may not be very significant.
On the investment side, this year's second half has seen significant declines and pressures. We believe that some of the reasons for the downturn may normalize next year, leading to hopes for infrastructure and capital expenditures performing better overall than this year. This represents a small cyclical mild recovery, indicating that domestic demand resilience remains promising.
The third aspect is the so-called re-balancing. In conjunction with many important macro themes set out in the 15th Five-Year Plan, we believe that next year will be a crucial starting year for China to advance its re-balancing, which encompasses other thematic concerns. On one hand, there is an emphasis on innovation-driven growth. On the other hand, the internal re-balancing of China's economy will be supported by many medium-term structural policies designed to support consumption. Many policies may be established and implemented, creating expectations around the future impact and effectiveness of policy support for consumption, although current expectations are not very high.
Moreover, regarding countering excessive competition, we believe there is an opportunity for progress over the next few years, which will help alleviate deflationary pressures in China and provide enterprises with more pricing power and opportunities to enhance profit margins. Lastly, there will be more efforts to promote high-level opening-up in China. This includes both domestic and external openness. On the external openness front, we are optimistic about seeing leading Chinese enterprises expand overseas, tap into global markets, and develop global production capacities, thereby gaining larger profit margins and enhancing global competitiveness.
【Anchor】OK. We know that 2026 is the starting year of the 15th Five-Year Plan for our country. If we combine the recently concluded Central Economic Work Conference with the earlier announced recommendations for the 15th Five-Year Plan, what new statements do you think investors should look forward to?
At this year's Central Economic Work Conference, we observed several important thematic judgments. First, next year's macroeconomic policy should remain relatively stable, encompassing both fiscal and monetary policies, which are expected to align closely with last year's economic work conference decisions. Looking ahead, we anticipate that next year's fiscal policy will experience moderate, slight expansion, but the official budget deficit ratio may remain unchanged at around 4%. Especially with the use of national bonds, special local bonds, and policy finance, the broader fiscal space should still experience slight expansion, though the extent may be lower than this year. This is the first aspect.
The second aspect concerns monetary policy, which is expected to remain positively accommodative. We still anticipate that by the end of next year, the People's Bank of China may further reduce interest rates by about 20 basis points, thereby encouraging greater reductions in mortgage rates. This would help relieve pressures on China's real estate market and stabilize it more quickly.
The third aspect is also very important. Currently, the government emphasizes "quality growth" that is devoid of inefficiencies. Therefore, we predict that the overall economic growth target for next year may have some flexibility. Our current baseline judgment sets the growth target in the range of 4.5% to 5%.
【Anchor】Mr. Zhao, what do you anticipate the development trend of China's macro-economy will be in 2026?
From the perspective of the Central Economic Work Conference, the overall policy outlook for next year is relatively positive. In terms of fiscal policy intensity, it is essential to maintain a considerable level of fiscal deficit. As for monetary policy, it will also remain relatively accommodative. With regard to the important fixed asset investment projects that will kick off with the 15th Five-Year Plan next year, we expect their contribution to the overall economy is expected to be noticeably higher than this year's.
Of course, from the standpoint of stimulating domestic demand and expanding consumption, next year's policy layout will emphasize this area significantly. The Central Economic Work Conference has prioritized the activation of domestic demand. We believe that consumption is a slow-changing variable. The previous measures to stimulate consumption, such as trade-ins and government subsidies, will continue; however, the overall intensity of these efforts will find it hard to exceed the levels seen in 2025 or earlier.
Overall, we anticipate that consumption may start to improve more noticeably in the latter half of 2026. The stability of U.S.-China relations in the first half of the year is expected to be relatively high, providing good visibility for exports. Thus, in the first half of the year, fixed asset investment and exports will have a more pronounced positive impact on the economy, while improvements in consumption may be more evident in the latter half of the year.
【Anchor】Now, if we focus on the Hong Kong market, what unique development opportunities do you see for Hong Kong in 2026, given its unique advantage of "being backed by the motherland and connected to the world"?
We now observe some incremental statements encouraging Hong Kong to develop into a national hub for innovation and technology, and we expect substantial policy support in this area. Combined with the 15th Five-Year Plan's emphasis on new productive forces and independent innovation, Hong Kong could play a more significant role in these aspects.
Additionally, we believe that Hong Kong's traditional function as a financial center will become more comprehensive. In the future, Hong Kong may further develop as an offshore RMB financial center while also seeing faster growth in commodities trading, particularly in precious metals such as gold. Historically, Hong Kong has relied on the U.S. dollar or the HKD pegged to the dollar for financing, but moving forward, we believe the development of the RMB and the global demand for it will offer many opportunities for Hong Kong.
Moreover, other emerging asset classes, such as green finance and virtual assets, will also have significant room for growth in Hong Kong. From past experiences, when the interest rate cut cycle nears its end, the U.S. dollar tends to weaken, leading to inflows of capital into emerging markets. Although Hong Kong's prime rate may not experience significant changes next year and could remain around 5%, interbank offered rates still have potential for further decline. In this context, there could be some support for Hong Kong's real estate market and asset prices next year. If the real estate market sees a moderate recovery, it will create a wealth effect that could benefit both the local economy and consumer spending.
【Anchor】Mr. Hu, what is your perspective on this?
In my view, the biggest opportunities for Hong Kong in 2026 lie not within traditional industries but in new financial sectors, particularly in two directions. The first is AI-driven wealth management services, including investment research, risk management, and wealth management. The second is the compliant development of blockchain and virtual assets. If blockchain represents the next generation of production relations, Hong Kong's advantage lies in how to integrate these new production relations into a mature financial system. This will be the most important strategic window for Hong Kong in the coming years.
【Anchor】In 2025, industries like non-ferrous metals, AI, and virtual assets became annual investment themes due to their impressive performance. As we enter 2026, will these sectors continue to lead the market? Additionally, is it anticipated that we will see similar events to "DeepSeek's sudden rise" next year?
I believe that in 2025, precious metals like gold and silver performed exceptionally well throughout the year, with significant gains. For next year, we still think there is room for further upward movement, but at the current level, we anticipate greater volatility, and the slope of ascent may not be as steep as previously expected.
On the AI front, anxiety and concerns about AI have become pronounced toward the end of this year. However, this does not mean a loss of confidence in the long-term development of this sector; rather, it reflects a sentiment that stock prices may have surged too quickly in the short term, or that capital expenditures are too high without immediate returns evident. Thus, there may need to be a period of adjustment in the AI market, which could lead to a reshuffling among the leading players. Recently, we've seen significant differentiation even among leading stocks, such as the Magnificent Seven. Therefore, next year, AI will still be a focal point of the market, albeit with higher volatility and potentially greater divergence than we currently see.
Investors might find opportunities in the application of AI and in launching new AI-related products, with initial attention likely on foundational infrastructure—such as competition for computing power and breakthroughs in large models. However, subsequent developments in AI+, or real-world scenarios leveraging AI, may present even more opportunities.
【Anchor】Looking ahead to 2026, what advice do you have for investors? What potential risks should they pay special attention to, Mr. Zhao?
Given that the overall market performance in 2025 exceeded expectations, confidence has rebounded relatively quickly. However, we think it is inappropriate to set overly high expectations for 2026, especially regarding expected return rates. Investors should exercise more caution in risk management. We anticipate that while there will still be room for market gains next year, volatility will also increase. Therefore, risk-adjusted returns may be slightly lower than this year.
That said, there will still be many opportunities for thematic rotation next year. We believe market rhythms will change quickly, and established styles from this year may face some degree of correction, making operations more challenging than they were this year.
【Anchor】Mr. Hu, what keywords can be used to summarize your advice for investors?
I think there are two keywords: first, embrace the trend but respect the cycle. Second, believe in technology while maintaining risk control discipline. I've summarized this into three points. First, in terms of direction, firmly align with the next generation of productivity or production relations. Second, in terms of pace, exercise great restraint. 2026 is not a year to achieve everything at once but rather a process of continuous verification and iteration. Third, treat innovation as a trend and valuation as a risk. The true long-term winners are not necessarily those that grow the fastest but those that can genuinely navigate cycles, continuously create value, and sustain growth.
【Anchor】OK, thank you to all the guests. That's all for this episode. Remember to follow us on YouTube or download our APP. I'm Yunfei Zhang, thanks for watching, and see you next time.
Anchor: Laura Cheung | Edited: Kelly Yang, Laura Cheung, Rachel Liu | Translate: Kato Ip | Proofread: Chris Liu
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