China Research

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

Different numbers on Chinese growth

April 28, 2026

Through many years, I have questioned the quality of Chinese official statistics. Sometimes, one can hear or read about statistical improvements. This may be partly the case – but who knows? Doubts are still in place, underlined by the competent research of BOFIT which is linked to the Finnish central bank, Suomen Pankki.

Worrisome domestic and global economic environment

According to the National Bureau of Statistics (NBS) in Beijing, Chinese GDP grew by 5 percent in Q1 of 2026 compared to Q1 last year. This is actually on the upper end of the growth objective of 4.5-5 percent for 2026 as a whole, despite all domestic and international distortions and wars. However, transparency of this development remains limited.

5 percent of economic growth in Q1 has been managed officially despite all the worrisome developments at home and internationally. GDP-growth rates remain unbelievably stable in China. Domestically, China is facing the the ageing population, the imbalanced property sector, major debt problems locally, and uncertain consumers – major challenges alongside all the technological achievements. On the other hand, official statistics also showed that investments and exports performed quite well in the beginning of 2026.

For example, exports grew by 20 percent to ASEAN countries (Q1 in value terms), by 32 percent to Africa and by 9 percent to Latin America. However, exports to the U.S. continued to decrease (-16 percent). 

Anyway, I still wonder for how long time or whether Chinese policy makers can continue to manage their dual economy simultaneously, the lagging and the leading one. An answer still cannot be given. 

The alternative calculation of BOFIT

Finnish research institute BOFIT (The Bank of Finland Research Institute for Emerging Economies, https://www.bofit.fi/en ) in Helsinki is well-known for its research on emerging economies, nowadays particularly on China, Russia and also the Ukraine. BOFIT publishes regularly important statistical indicators on these countries (https://www.bofit.fi/en/monitoring/statistics/) – but also an alternative China forecast on its own which contrary to NBS gave a slight slowdown in Q1 (https://www.bofit.fi/en/monitoring/statistics/alternativeindicatorsofchinaseconomicgrowth/). 

Nota bene: BOFIT’s next forecast on China will be published on May 5.

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

Poland’s move from an emerging to an emerged “top 20” country – a genuine success story

April 8, 2026

Many international analysts seem to be surprised by the economic rise of Poland during the past 35 years. But they should not. Poland’s positive way forward was clearly visible during all these years. Sure, there were years when less promising steps were made – to the right or to the left – and when the speed of reforms was lowered. However, Poland never left the road of economic reforms. This fact explains very well its rise to the 20th largest economy in the world, passing by even Switzerland.

Very weak starting point in 1990 – but clear strategy to move forward

The planned economy in Poland fell during my time as a chief economist at a major Swedish bank. Contrary to many colleagues, I became very curious about the economic potential of the emerging democracies in Central and Eastern Europe despite their weak starting position, particularly when it came to Poland and the Baltic states. In the early 1990s, my written pieces on the enormous potential of Poland were not yet published digitally but I found an internet source in Swedish from 2007 (https://www.varldenidag.se/nyheter/sverige-ar-fortfarande-i-en-tillvaxtekonomi/35348)

Anyway, the very beginning of Poland’s transformation into a market economy and other competitive structures were not easy to accomplish because of all the economic and institutional shortcomings from the planned economy. However, I always got the impression during my frequent visits to Warsaw and the meetings with Polish ministers, central bank governors and colleagues there that Poland persued a clear strategy of steadily moving forward and becoming more competitive in the increasingly globalizing economy. The strong ambition of steadily improving institutional standards played obviously a decisive role in Poland’s successful catching-up process.

Striking major achievements

In 1990, the Polish GDP per capita amounted to modest USD 6 700 or 38 percent of EU average and 35 years later to more than 55 000 or 85 percent of EU average. According to the IMF, Poland reached in 2025 the number 20 position when calculating total GDP. This is indeed a remarkable achievement and has been widely appreciated in global media.

A decisive contribution to this amazing development came without doubt from Poland’s preparations for its EU entry in 2004 and for the continuous institutional commitments after having managed EU membership. Major investments in higher education and modern technology – and, thus a competent labor force – explain as well why Poland could perform so positively in the past few decades. Considerable investment funding by the EU was certain also responsible for Poland’s positive development during the past 20 years.

It can be summarized that Poland achieved an annual GDP-growth rate of almost 4 percent in the past 20 years, clearly above EU average. In 2025, Polish GDP growth was 3.6 percent for the year as a whole and 4 percent for Q4.

Conclusion: The Polish example manifests clearly the decisive role of lasting institutional improvements for the catching-up development of an emerging market. Today, Poland can be described as an emerged country with nowadays good OECD standards, competitiveness and growth potential.

But also Poland must work on continuous stabilization and improvements of its political and economic conditions. Or as Nobel Price winner Paul Samuelson once told me that “globalization does not give time for comfortable ineffectiveness”.

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

India confirms its good GDP growth

March 19, 2026

India has more recently developed as a new favorite for many Western politicians and corporations. Even more when growth expectations were exceeded also in the final quarter of 2025, 7.8 percent compared to 7.2 that were expected. The outlook remains relatively favorable due to probable good resilience against ongoing exogenous distortions.

Where does GDP growth come from?

Obviously, India Is now receiving growing attention by analysts around the whole world. Good numerical GDP growth in India and China’s simultaneously somewhat distorted reputation in global media may serve as logical explanations. More lately, some interesting Indian developments could be observed.

First, it should be mentioned that GDP growth has been boosted by a technical revision, i.e. moving the base year from FY 2012 to FY 2023 (which in India is defined as a time horizon from April 1 to March 31). This structural revision means a stronger contribution to GDP from the modern technological part of the Indian economy compared to calculations from 20 years earlier. The revision took place after the IMF’s prompt to modernize the national account and looks as follows:

FY 2024   7.2 (new series)      9.2 (old series)

FY 2025   7.1 (new series)      6.5 (old series)

FY 2026   7.6 (new series)      7.4 (old series)

Second, both private consumption and gross investments are reported having grown by more than 7 percent in Q4. When considering that private consumption counts for 75 percent of Indian GDP and the slightly negative trend for net exports, the Indian investment ratio to GDP remains somewhat too low for a rapidly emerging country.

Third, GDP growth for Q2 got also a technical upward revision, from previously 8.2 to 8.4. Indian media report now proudly that India now has the fasted growing economy among the major countries.

Fourth, when watching more recent developments from the production side, technological progress seems indeed being an increasingly important driving force for manufacturing industries. Strong concentration on AI and telecommunication take also place in industrial production, increasingly also with foreign companies.

Fifth, Maharashtra is expected to be India’s wealthiest state also in FY2026 due to its diversified production structure with mainly manufacturing, services and infrastructure. Thus, GDP growth there should surpass national average. Mumbai, Pune and Nagpur stand for half of Maharashtra’s GDP and for around one fifth of India’s population.

Despite the promising outlook – don’t forget still existing risks!

When (financial) markets are favoring a certain (emerging) country, the remaining weaknesses and risks are often “forgotten”. This has, for example, been the case concerning China In almost the whole first quarter of this century. And even the future development of India’s economy is not without risks – despite all the opportunities.

Short-term risks that should be mentioned are, for example, the ongoing war in the Middle East with its impact on energy supply and inflation, American protectionism,  negative developments of remittance flows from abroad and, consequently, on the balance of current account.   

 Among the long-term (structural ) risks one can find particularly weak public finance and infrastructure, very uneven distribution of income, energy and environmental problems, bureaucracy, only slow improvements of private investment and productivity in major parts of the economy and the – in my understanding – still improvable business climate.

Very different psychology in India and Germany

Since I deal quite a lot with the economy of both countries, a striking psychological distinction between the two countries may be mentioned. This distinction could be described as follows:

¤ Germans see and discuss more frequently problems in the economy, having in difficult times rather a very skeptical or pessimistic view (which even can have a negative impact on economic growth via too reluctant consumers and investors).

¤ Indians on the other hand dislike normally to sound negative – at least when they are discussing the development of their country with foreigners. This may be a preferable psychological attitude compared to German skepticism but should be considered with some caution by foreign companies when planning activities in the promising – but to some extent still vulnerable – Indian market.