Author: James Cook, Investment Director, Emerging Markets
When I wrote in February that the Year of the Fire Horse felt different, the emphasis was on transition rather than acceleration. Now, with the first quarter of 2026 behind us, that framing still feels right but with an important caveat. China hasn’t stumbled, but it also hasn’t broken into a run. So far, this year has been a trot, not a gallop.
The regional context matters. The Asia ex‑Japan region delivered another quarter of extreme dispersion. Technology‑heavy markets such as South Korea and Taiwan surged early in the year, buoyed by artificial intelligence (AI)‑related demand and a weaker US dollar, before giving back some gains in March as the Middle East conflict triggered a global risk‑off move. China, by contrast, lagged throughout the quarter, underperforming regional peers1 and leaving investors once again asking why it has been left behind – and whether its performance reflects an underlying reality.
