Online Policy Forum (US/Asia Briefing), 17 July 2026

The macroeconomic outlook for the United States, Europe, and China is increasingly shaped by renewed inflation pressures, geopolitical shocks, technological change, and intensifying global competition. In the United States, the economic narrative has shifted from concerns about a weakening labour market to concerns about persistent inflation, even as employment remains resilient and investment linked to artificial intelligence continues to support demand. In Europe, growth has weakened but remains broadly stable, with the outlook shaped by the fading energy shock, higher defence spending, resilient labour markets, and the deeper challenge of restoring competitiveness in the face of China’s rise in advanced manufacturing. China’s economy remains uneven: AI-related exports and internationally competitive sectors are performing strongly, while domestic demand, household consumption, property activity, and credit demand remain softer. Recent rural banking consolidation also points to efforts to manage financial stability risks more quietly, while the broader structural challenge remains how to support innovation, resolve excess capacity, and allow weaker firms to exit more effectively. Overall, the outlook is one of resilience but also divergence: major economies are still growing, but each faces a different mix of inflation, productivity, financial stability, competitiveness, and policy trade-offs.