Webinar with SEB's experts
Eugenia Victorino, Head of Asia Research, Sean Yokota, Head of Asia FICC and Chloe Merdjanian, Senior FX Sales expert in Asia outline their views on Asia's 'Twin Towers', China and India.
China’s near-term geopolitical risk remains contained despite recent turbulence in its military leadership. Eugenia Victorino, SEB’s Head of Asia Strategy, said that the removal of a key military figure has pushed back expectations of a potential conflict around Taiwan.
“Beijing prefers sustained pressure without outright military action,” she said, noting that major escalation appears unlikely ahead of a planned April visit from the United States president.
On the economy, China is expected to maintain five per cent growth this year, roughly unchanged from last year. Victorino highlighted a more favourable global backdrop and a temporary truce with the United States as key factors supporting the outlook. She added that policy could shift if authorities decide to strengthen household spending, saying “a concrete consumption target in the next five-year plan would really change the narrative.”
India’s outlook remains robust, supported by the newly announced free‑trade agreement between the European Union and India. Although the deal still needs to be ratified within 9-12 months from now, according to Sean Yokota, SEB’s Head of Asia FICC, it is expected to lower tariffs on a wide range of goods over the coming decade and increase opportunities for European exporters.
Yokota noted that it will “help Indian producers of labour-intensive (goods) like clothing, shoes, and jewellery” to have better access to the EU market. Meanwhile, Victorino noted that interest is already rising but added that full effects take time, as “the impact of trade agreements usually takes five to ten years.”
India’s growth is forecast to ease slightly to 6.5 per cent in the coming fiscal year. Risks include slower nominal growth, which could limit government spending, and continued weak portfolio investment flows. Currency pressures remain, with the Indian rupee remaining soft by year-end.
Both countries continue to play central roles in Asia’s broader economic outlook. A downturn in the global semiconductor cycle is seen as a key regional risk, given its importance to export demand across several Asian markets.