Newsletter By 2026-04-30
The stability of China’s economy depends not only on “internal circulation,” but also substantially on “external circulation,” including access to foreign markets, technological collaboration, capital flows, and industrial support systems. Disrupting these linkages prematurely may not exert effective external pressure and could instead weaken China’s own openness and resilience. China’s economic relationships extend beyond trade and investment; they have become integral components of a country’s external relations framework and strategic assets for stabilizing expectations, sustaining cooperation, and preserving policy flexibility. Beijing should avoid treating long-established external economic ties as instruments that can be readily deployed or withdrawn, said
ANBOUND’s founder Kung Chan in an
article published in
The Diplomat.
The three-tier "dollar zone" is the Trump Administration' current effort to implement a hierarchical dollar-based framework, with the Americas as the core zone, the Asia-Pacific and the Middle East as the control zone, and Europe and Africa as the influence zone. Compared with the dollar system during the Clinton and Obama eras, new strategy marks a shift from reliance on a single petrodollar anchor to a more diversified foundation spanning energy, minerals, and technology, as well as a transition from a globally open approach to a more alliance-based, tiered configuration. While the Middle East conflict introduces uncertainties into the advancement of this framework, it also creates a window of opportunity for yuan internationalization, discussed
Zhang Yi, Economist of China Macro-Economy Research Center at ANBOUND.
>>The occurrence of non-standard debt defaults among China’s urban investment companies in multiple regions indicates that, under the broader push to resolve local governments’ hidden debt, these entities are constrained by policy red lines. As a result, their debt burdens have not been significantly reduced and may, in fact, have worsened. Clearing up the operational debt and advancing their transformation requires close coordination and cooperation among fiscal authorities, financial sector, and state-owned assets management bodies, said
Wei Hongxu, Senior Economist of China Macro-Economy Research Center at ANBOUND.
>>Over the past decade, low fertility rates are no longer a phenomenon confined to developed economies such as those in certain European countries, Japan, or South Korea. Instead, they are rapidly spreading to regions like Latin America, the Middle East, and Southeast Asia. Even more notably, this shift is not only observable between countries but is also becoming increasingly evident within countries, reflecting deeper transformations in economic structures, social norms, and family values, according to
Zhijiang Zhao, Research Fellow for Geopolitical Strategy programme at ANBOUND.
>>The prosperity of the private economy directly determines whether China can become a truly wealthy and strong modern nation. At present, improvements in the business environment and the development of the rule of law provide a certain foundational support for private enterprise, but deep-seated institutional and conceptual obstacles remain. The key issue lies in the "forest of power" where government bodies, policies, and state-owned enterprises form a dense web that constitutes the most important rules of the game in today's market. Its constraints and the oppositional relationship are highlighted between the power sector and the growth sector. Only by addressing these problems can China's market economy system become more mature and genuinely resilient, analyzed
Yang Xite, Research Fellow at ANBOUND.
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