Fitch Ratings has revised its 2026 sector outlook for the Chinese mainland, Hong Kong, Macao and Taiwan to "neutral" from "deteriorating" based on sustained GDP growth resilience and improving price dynamics.
The ratings agency, however, has changed its 2026 global sovereign sector outlook to "deteriorating" from "neutral", warning that the US-Iran conflict is likely to weigh on global growth, fuel inflationary pressures, push up bond yields and heighten sovereigns' geopolitical risks.
In a report released on Monday, Fitch said robust exports remain a key growth driver as the Chinese mainland, Hong Kong, Macao and Taiwan have weathered tariff uncertainty and benefitted from the artificial intelligence investment boom. The region appears relatively insulated from the energy shock though is not immune from its impacts on global growth.
Jeremy Zook, senior director of APAC Sovereigns at Fitch Ratings, said robust external demand is supporting economic resilience across the Chinese mainland, Hong Kong, Macao and Taiwan and risks from the energy prices shock are cushioned by strong external finance positions.
Price dynamics in the Chinese mainland are improving as the mainland exits a period of deflation, although Fitch expects inflation to remain low, Zook said.
