AD International China in 2026
Progress, vulnerabilities, relations with the United States after the Washington summit, and the monetary dimension: yuan internationalisation, de-dollarisation and the e-CNY.
Read the full briefing (PDF) →
The briefing at a glance
China grew 5.0% in 2025, meeting its official target, with GDP close to ¥140 tn (about $19.7 tn). The 15th Five-Year Plan (2026-30) aims to rebalance the economy towards household consumption, innovation and the low-carbon transition. China now ranks 10th in the Global Innovation Index (34th in 2012) and leads in AI, electric vehicles, batteries and renewables: wind and solar capacity reached about 2,000 GW by mid-2026, and solar overtook coal in July. The weak points are semiconductors, a shrinking and ageing population, local debt, the property crisis, and a grid that curtailed over a quarter of wind and solar output in the first half of 2026.
Relations with Washington have moved from escalation, with tariffs of 145% and 125% in April 2025, to a partial thaw. During Xi Jinping's state visit in September 2026, the two sides set up a Board of Trade to cut tariffs on about $30 bn of goods each way and extended their truce to 10 January 2027. Since the Supreme Court struck down the IEEPA tariffs, US duties rest on Sections 301 and 232, and no date has been set for the cuts. Taiwan, Iran and technology remain outside any compromise.
On the monetary side, Beijing hedges against the dollar rather than challenging it. The yuan settles 28% of China's goods trade, but its share of SWIFT payments has slipped to 2.75%. US Treasury holdings are down to $618 bn, the lowest since 2008; gold reserves have risen for 22 consecutive months to 2,387 t; and the e-CNY, interest-bearing since January 2026, is moving into cross-border payments through mBridge.
The numbers that matter
Figures as reported on 27 September 2026; trade and policy updates to 3 October 2026. Sources are listed below and on each slide of the PDF.
Five parts, eighteen pages
- 01
China's progress
Growth held at 5%, a 15th Five-Year Plan focused on consumption and innovation, leadership in AI, EVs and renewables, and persistent weaknesses in chips, demographics and property.
- 02
US-China relations
From tariffs of 145% and 125% at the 2025 peak to the Washington summit of September 2026, its $30 bn reciprocal tariff cuts and a truce extended to January 2027; the legal basis of US tariffs after the Supreme Court ruling; Taiwan, Iran and technology remain fault lines.
- 03
The case for partnership
What the US, China and the world gain from stability, within a transactional, de-risking relationship.
- 04
The monetary dimension
The yuan's rise has stalled at 2.75% of SWIFT payments; China buys gold, holds fewer Treasuries and scales up the interest-bearing e-CNY and the mBridge platform.
- 05
Areas for further analysis
Political system, human rights, regional security, China and the world, Europe, economic fragilities, resources, capital account and data reliability.
What to remember
Technological and industrial power
Leads the energy transition in installed capacity; at the forefront of AI, EVs and batteries.
Structural fragilities
Weak domestic demand, demographics, local debt, property, grid integration of renewables.
US-China relations
Truce extended to January 2027 and a $30 bn deal, but Taiwan, Iran and technology remain unresolved.
Monetary strategy
Hedging against the dollar through gold, CIPS and the e-CNY, without yet challenging it.
Main sources
- National Bureau of Statistics of China (19 Jan 2026)
- Carbon Brief; CREA: energy and emissions (2026)
- Congressional Research Service (Aug 2026)
- CNBC; Axios: Washington summit (Sep 2026)
- Peterson Institute: yuan internationalisation (2026)
- US Treasury TIC data via Axios (Sep 2026)
- World Gold Council (Sep 2026)
- Caixin Global: digital yuan (Jan 2026)
Official data are cross-checked with independent sources. This note is for information only and is not investment advice.