China Research

A discussion forum on emerging markets, mainly China – from a macro, micro, institutional and corporate angle.

“New global conditions for emerging country analysis”

February 23, 2026

Summary of the Keynote Address by professor Hubert Fromlet at the IIF International Research Conference & Award Summit (IIF-IRCAS), February 15, 2026, in Delhi / India  *

The world is changing and has always been changing. The same can be said about the characteristics of emerging markets and the analysis of this increasingly important group of countries. This includes the aspects and judgments of financial markets.

The future of emerging market analysis

It seems to be a safe forecast that politics will remain very important for the future analysis of emerging markets – probably increasingly important in a longer perspective. In this context, the analysis of China’s and Russia’s ambitions in the emerging world could become particularly interesting – certainly also the activities of the U.S. in emerging countries. The future positioning of the EU in emerging countries seems to be uncertain. Altogether, geopolitical ambitions of the three global superpowers will most probably gain further momentum in the analysis of emerging markets. 

Future geopolitical ambitions of the superpowers can also be related to the availability of commodities – some of them more attractive to industrial producers around the world than others, with their ups and downs. An interesting question may be the future of rare metals which should be a crucial topic also for India. Furthermore: To what extent can certain commodities be substituted in the long run?

Another issue of general analytical interest should be to what extent Western corporations will make their supply chains less risky and move purchasing and production closer to friendly countries or their own geographical hemisphere. This has been partly the case more recently – but less dramatically than originally apprehended. Probably, this will be mostly a China-related question. The role of the U.S. remains uncertain in this context.

Closely linked to the domestic political area is also the development of institutions which have been neglected for a long time in emerging market analysis. But no responsible economist should continue to do so in the future. We should not forget the scientific conclusions of Nobel laureate Douglass North who clearly demonstrated the positive correlation between institutions and economic growth (North 1993).

 It should be added that also long-term trends in demography in combination with educational investments deserve more special attention in the analysis of emerging markets. Such an angle will be particularly illuminating when it, for example, comes to India with its promising demographic outlook. This relationship will become more frequently examined in the future, i.e. to what extent the population increase of India can be managed by corresponding efforts in education, particularly for the younger population.

Certain macroeconomic indicators like GDP, inflation, government debt etc will, of course, be carefully examined by analysts in the future as well – despite the statistical shortcomings that doubtless exist in many emerging countries. But it should also be recognized that pure macroeconomic analysis cannot be considered as sufficient anymore. Trustworthy emerging-market analysts should also follow microeconomic and financial developments in emerging countries. Improving and well-working financial markets can contribute so much to the performance of an emerging country.

The brief summary above on future main topics for the analysis of emerging markets points clearly at continuous analytical mergers between mainly politics, economics, finance on the one side and corporate management on the other side.

Having said this, one may also foresee that future anaIysis of emerging markets will  create further fields of special attention. I still believe that sociology and psychology play an underestimated role on global financial markets but also as regards the analysis of emerging markets as such. Analysts still can try harder to understand the messages and plans of the political leaders in the U.S., Russia and China which – in my view – is not possible without a better psychological understanding of their political leaders.

Finally, I also would like to mention another three areas that will matter in the future analysis of emerging markets. I am speaking about the future developments of investments in IT / AI, the environment and health care – i.e. the development and application of new technology. Will the divide in these areas between different emerging countries increase further? This is certainly something to observe in the future, too. Especially AI still contains – apart from obvious opportunities – a lot of unforeseeable risks and threats both globally and for single emerging market countries.

Is there a new risk for uncontrolled herd behavior coming from AI exuberance and AI application with thinkable severe consequences – also for the emerging world (see also Fromlet 2004)? Or should the risk of being insufficiently ambitious in AI development be considered as larger? What about the risks of a painful future digital divide among emerging countries? No one can answer these questions with reasonable probability – neither AI supporter and Nobel Prize winner from 2025, Philippe Aghion (Aghion and INSEAD 2025), nor AI sceptic and Nobel Prize winner from 2024, Daron Acemoglu (Dizikes 2025).   

Summary – new or changing fields of future emerging-market analysis The analysis of emerging markets has been changing substantially in the past and will do so in the future. The following examples that have been mentioned above as future keys and contributions to the analysis of emerging markets look as follows (without ranking):

Traditional analytical issues of the past but still crucial beyond 2026 
¤ well-known macroeconomic indicators, e.g. GDP, inflation, current account, debt, etc
¤ microeconomic and corporate trends (including supply chains)
¤ financial market developments 
¤ education on all levels  
¤ institutional improvements.                                                                                                                    

Increasingly important issues more recently and beyond 2026
¤ Politics
¤ For non-Indian analysts: the future rise of India (the Indians themselves know about it)
¤ China, Russia, the U.S. and their attempt to create a new world order
¤ investments in IT / AI,
¤ future risks for financial (AI) bubbles and AI divide in the (emerging) world 
¤ environmental policy  
¤ energy demand and production                       
¤ demography 
¤ psychology and sociology. 

Finally, I would like  to thank once again for the invitation to speak today at the IIF. I do wish India and the IIF all the best for the future. Such an interesting country and academic institution (Fromlet 2024) – always worth-while visiting, also for analysts. Watching the screens in a trading room should not be enough for foreign emerging market analysts for receiving a correct and fair impression of the Indian “continent”! 

Hubert Fromlet, Linnaeus University     

* The whole presentation will be published in the March number of “Finance India” (edited by IIF)

References:
Aghion , Ph and INSEAD Knowledge (2025), “Will our institutions keep up with AI? https://knowledge.insead.edu/economics-finance/will-our-institutions-keep-ai

Dizikes, P (2025), “A Nobel laureate on the economics of artificial intelligence”, MIT Technology Review        (MIT Alumni News: 77), https://www.technologyreview.com/2025/02/25/1111207/a-nobel-laureate-on-the-economics-of-artificial-intelligence/

Fromlet, H (2004), “The Run to China: Another Example of herd Behavior?”, Economic & Financial Review, no 1, pp 103-124

Fromlet, H (2024), “China vs India – who wins in the long run?”, China Research, Linnaeus University, https://blogg.lnu.se/china-research/?p=3582

North, D C (1993), “Economic Performance through Time”, Nobel Prize Lecture, https://www.nobelprize.org/prizes/economic-sciences/1993/north/lecture/

Superpowers focus increasingly on emerging countries

December 5, 2025

China’s increasing efforts in the emerging world have been clearly visible for quite some time, particularly in Africa and more lately also in South America. It seems possible that the U.S., Russia and China will be going to design a new world order without including the EU and the UK. This could be a very uncomfortable trend for Europe – a scenario which should not be ruled out completely by Western politicians and business people.

A new world order may be created

We currently do not know enough about the global ambitions of the U.S., Russia and China. However, certain strategies are about to crystallize. Particularly the predilection of President Trump for political agreements as kinds of business deals makes his future impact on global political developments most uncertain. Obviously, Trump sees a lot of promising commercial deals with Russia. Thus, the following scenarios or future developments do not look unrealistic:

First, there seems to be the common objective of the three superpowers – three if we include the military superpower of Russia – to weaken the EU as much as possible.

Second, the U.S. may be interested in regaining influence and power in its Central and South American backyard. Ongoing military intervention threats in Venezuela may point at such a strategy.

Third, major parts of Asia may in the future mainly – but not only – belong to China’s political priority. APEC ambitions may be still in place.

Fourth, Africa could become a strategic part of both Chinese and Russian foreign policy even more clearly than today, trying to crowd out the EU from this commodity-rich part of the world.

Fifth, Russia will probably try to maintain or enlarge its influence in what it considers being natural parts of their hemisphere in Europe and Asia.

Future FDI in emerging countries will need more political consideration

The idea of presenting the alternatives above is not about making a forecast. I am talking about scenarios which must not be equalized with forecasts. Instead, I want to take up a kind of possible outlook that the world may be about to change its political shape and distribution of power. A new world order may be created. If this is going to happen, many emerging markets may be highly affected. This would mean that future Western investments in emerging markets will need much deeper analysis than we have become used to in recent decades.

PS: Best seasonal greetings to all the readers and welcome back in January!

Hubert Fromlet
Affiliate Professor at the School of Business and Economics, Linnaeus University

CO2 pollution in emerging countries

November 20, 2025

Currently, the climate conference of the UN is taking place in Brazil, unfortunately with limited involvement of several leading advanced countries. Particularly President Donald Trump has been stepping beside or even behind. Still, China, the U.S. and India are the main global CO2 polluters. Without strong commitment from these three countries, decisive global progress in the fight for a better environment cannot be achieved. However, this should mean all the same that better environmental conditions should be created in all emerging markets.

Many emerging countries among the top 30 polluters

According to global statistics, one still can find China clearly in the global lead of CO2 pollution in percent before the United States, India, Russia, Japan and Iran. Despite quite some progress in recent years, China’s CO2 pollution remains almost three times higher than the correspondent number for the United States and more than four times higher than India’s ratio (see https://worldpopulationreview.com/country-rankings/co2-emissions-by-country).

CO2 pollution by country, global share in % in 2023  (and share of pollution per capita)

 1      China                    33.98           (9.2)

 2       U.S.                       12.00           (13.8)

 3       India                        7.57           (2.1)

 4      Russia                     5.30            (14.4)

 5      Japan                       2.42            (7.5)

 6      Iran                           2               (9.1)

 7      Indonesia              1.73             (2.4)

 8      Saudi Arabia        1.60             (17.1)

 9      Germany               1.49            (7.1)

10     Korea                      1.47           (11.0)

11     Canada

12     Mexico 

13     Brazil

14     Turkey

15     South Africa

16     Vietnam 

21     Malaysia

24     Thailand

25     Egypt

26     Kazakhstan

27     UAE

28     Pakistan

29     Iraq

30     Argentina  

When it comes to CO2 pollution per capita, the picture looks more favorable for China compared to the U.S. I could hear this as a strongly positive argument on many occasions when I still visited China very frequently. However, my conclusion was from the very beginning that pollution per capita had to be regarded as a bumpy measurement since pollution never has national borders. I could hear this point of view with obviously strong passion during my visits on the southern Japanese island of Okinawa which had been – and still is – particularly affected by Chinese pollution.

Hubert Fromlet
Affiliate Professor at the School of Business and Economics, Linnaeus University