China Growth Skepticism Mounts as Mexico and Vietnam Pursue Market Gains

New research from Rhodium Group suggests that China's real economic growth may be significantly lower than official government figures indicate. While Beijing reported 4.7% growth for the first half of 2026, analysts estimate aggregate growth has hovered between 1.5% and 2% over the last four years. The discrepancy is attributed to a massive property sector collapse—with new housing starts down 77% from their peak—and a reliance on external demand to offset zero domestic demand growth. China’s trade surplus reached a record $1.2 trillion last year, fueled by exports of electric cars and solar panels, leading to accusations of exporting deflationary pressures.

Elsewhere in the region, Vietnam is working to address stock ownership hurdles to facilitate a market upgrade. FTSE Russell is poised to consider upgrading Vietnam to secondary emerging market status this September. However, significant obstacles remain, including strict limits on foreign ownership and the need for market infrastructure reforms. In Mexico, the economy is showing signs of vigor, growing at its fastest pace since late 2020 during the second quarter. The North American nation is benefiting from nearshoring trends and robust trade links, providing a bright spot in the global emerging markets landscape.