China Research

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/