Full Report: China's 2026 Economic outlook

Report "China's 2026 Economic Outlook"

The key insights contained within this report can be divided into two main themes:

1) Ongoing real estate crisis that is a short-term risk that could develop into an acute crisis.

• Real estate starts dropped off a cliff from 2022 to 2025, together with real estate sales, a 70% drop from its peak.
• By 10/2025 real estate buildings under construction were still holding up, having dropped by only about 15% to 20% from its peak in 2022.
• The collapse in land purchases for development and real estate starts point to the crisis deepening in the years ahead, with the possibility of an acute crisis unfolding.
• The housing bubble in China is characterized by massive oversupply and not so much by rising prices.
• China’s ongoing real estate crisis is the start of a decades long restructuring process of the economy.
• Risk of economic crisis starting in 2026

2) The long-term structural challenges for China.

• Around 2020, China’s working age population started a steep decline which will intensify until 2032.
• Internal consumer demand will be under pressure in the coming decades.  
• China needs to rely on exports for keeping its installed capacity running.
• In 2021 China’s GDP was 80% of US GDP, while in 2025 it was only 60%.
• China current situation is comparable to Japan in the 1990s, resulting in “two lost decades” of low economic growth and deflationary environment.

Summary:

China is experiencing a real estate crisis that is similar to Japan’s in the 1990s. The collapse of Evergrande in 2021 and of Country Garden in 2023, two of China’s largest property developers are warning signs of deep troubles in the real estate market. Due to China’s scale the crisis will likely impact the global economy on an unprecedented scale.

To understand the origins and nature of China’s real estate crisis, the report analyses the historical economic backdrop that led to the current situation. We investigate China’s demographic trends, it’s GDP and respective components, trade and debt. We also compare these China’s economic indicators with those of other countries and in particular make parallels with Japan’s economic development from 1970 to 1990 and its subsequent “two lost decades”.

With the broader context at hand, we then examine and anticipate the extent to which the ongoing real estate crisis will develop into a full-blown economic crisis in 2026, and whether it poses a systemic danger to China or other countries. The insights gained from the analysis within the report provides us tools to anticipate China’s possible policy actions for dealing with the crisis and on a wider context, its structural reforms for the coming decades.

The report is a “navigation map” to understand ongoing economic developments in China and its possible geopolitical implications in the context of ongoing trade wars. The “navigation map” will be a useful resource for both the unfolding real-estate crisis which could enter its acute phase in 2026, as well as for China’s economic path in the coming decades.

Included with the package is an executive presentation that is targeted to decision makers at institutions, family offices and high net-worth individuals. It provides them a summary of the main findings contained within the report and their implications to their businesses and assets.

Furthermore, we provide a video where Carlos Alegria and Edward Dowd navigate through the executive presentation and explain the relevance of the different data charts and relationships with there own personal views.

View more information: product page on our website.

Package Contents:

• Full 80-page report on China's economic outlook for 2026.
• Executive presentation
• Video where Ed Dowd and Carlos Alegria go through the executive presentation and provide their personal views.

Preview Video:

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