Rewiring the global economy: resilience, risk and renewal in the Year of the Horse
22 hours agoStandard Chartered UK welcomed more than 500 clients and partners to its flagship Lunar New Year Forum and Celebration in London, marking a record attendance for the annual event. As we entered the Year of the Horse – symbolising energy, endurance and forward momentum – the discussion focused not on short-term market noise, but on the deeper structural forces reshaping the global economy.
In a week marked by sharp market moves and heightened geopolitical headlines, the forum provided perspective: volatility may feel relentless, but the global system is not unravelling; it is adapting and reorganising under pressure.
Insightful addresses from Eric Robertsen, Global Head of Research & Chief Strategist, Standard Chartered, and Martin Wolf, Associate Editor and Chief Economics Commentator, Financial Times, were followed by a wide-ranging panel discussion featuring: Martin Wolf; Prof. Keyun Ruan, Computer Scientist and Economist, Alphabet Inc; Geoff Kot, Global Head, Corporate & Investment Banking Business Platforms, Standard Chartered, and moderated by Madhur Jha, Global Economist & Head, Thematic Research, Standard Chartered. Together, they explored the risks, opportunities and long-term shifts that will define the years ahead.
Below, we summarise the key takeaways from this year’s discussion.
1. The world is not deglobalising – it is reordering
Despite persistent headlines about trade wars and fragmentation, global trade continues to expand. In 2025, global trade rose by approximately 7% year-on-year1, with merchandise volumes still growing. What has changed, however, is the direction of trade.
China’s exports to the US declined significantly, yet its overall trade surplus reached record levels as trade corridors shifted toward Asia, the Middle East, Africa and Latin America. Trade between emerging markets is now approaching half of global export flows, with particularly strong growth in non-oil trade across the Gulf.
This is not deglobalisation, but reordering. Growth momentum is increasingly driven by emerging market linkages, and capital is adjusting accordingly.
2. Resilience today, fiscal risk tomorrow
One of the defining features of the current cycle is the coexistence of “peak uncertainty” and resilient asset prices. Over the past two years, more than 300 central bank rate cuts have injected substantial liquidity into the global system. That liquidity has helped sustain growth near 3–3.5%2, despite geopolitical shocks and policy uncertainty.
However, the debate is shifting from monetary stimulus to fiscal sustainability. Public debt-to-GDP ratios in many advanced economies are back to levels last seen in 1945, but this time accumulated in peacetime. Structural deficit persists and there is little political appetite for consolidation.
The concern is not necessarily an immediate crisis, but the possibility that confidence in sovereign debt could erode. A material loss of confidence would have implications for currencies, financing costs and financial stability.
3. The dollar debate: diversification, not abandonment
While “de-dollarisation” remains a hot topic, the forum discussion suggested a more nuanced reality. While the US dollar has weakened modestly following recent policy announcements, it remains strong relative to many developed and emerging peers.
Rather than an abandonment of the dollar, we are seeing portfolio diversification and greater allocation toward emerging market assets. The shift reflects relative valuation, capital flow dynamics and geopolitical considerations, not the collapse of the dollar-centric system.
4. China’s transition: a rocky rebalancing
China is undergoing a profound economic transition. Growth is slowing as the economy shifts from a property-driven, investment-heavy model towards a more balanced mix of exports, advanced manufacturing and eventually, stronger domestic demand. The housing market remains under pressure and consumer sentiment subdued, even as export sectors such as electric vehicles, solar and advanced technologies perform strongly.
The transition is proving uneven, but it is structural rather than cyclical. How successfully China rebalances will have significant implications for Asia and global supply chains over the coming decade.
5. AI: productivity engine or political shock?
Artificial intelligence featured prominently throughout the day, both as an economic opportunity and a societal challenge. Investment in AI-related categories has already surpassed real IT investment levels seen during the dot-com boom. The scale of capital expenditure is unprecedented, raising important questions about timing: revenue realisation may lag years behind current spending.
From a macro perspective, the sustainability of this investment cycle will depend on financing conditions. Many technology firms are now issuing long-term debt, introducing new balance sheet dynamics into a sector historically funded by equity and free cash flow.
From a societal perspective, the discussion was equally nuanced. AI is likely to complement labour in the near term, but white-collar job disruption is expected. The bigger challenge may be pacing technological capability with societal adaptation, including regulation, education and workforce reskilling.
6. Structural forces: demographics, climate and geopolitics
Looking beyond the cycle, several long-term certainties will frame the next decade. Ageing populations will weigh on labour supply and raise fiscal pressures. Climate change will intensify, with economic consequences that are material but difficult to predict. And geopolitical rivalry, particularly between major powers, is reshaping trade, technology and security policy.
These forces introduce fragility into an otherwise resilient system. The world economy has deep reserves of strength, but it is operating in a more politically contested and strategically complex environment than at any point since the Cold War.
Looking ahead
The forum concluded on a balanced note. There are credible arguments for slower growth ahead: ageing populations, high debt burdens and geopolitical fragmentation. Yet there are equally strong arguments for acceleration – from AI-driven productivity gains to advances in clean energy systems.
The most likely path is continued growth, but with elevated volatility and structural transition.
In the Year of the Horse, endurance may matter more than speed. For businesses and investors, success will depend on distinguishing cyclical noise from structural change, and positioning capital where long-term resilience meets opportunity.
As the global economy rewires itself, perspective and partnership will be more valuable than ever.
1UNCTAD – Global trade to hit record $35 trillion despite slowing momentum