bb

CARECInstitute

QuarterlyEconomicMonitor

HansHolzhacker

ElviraKurmanalievaShiliangLu

Marina(Rui)Wang

April2025

NQ,16

CARECInstitute

QuarterlyEconomicMonitor

HansHolzhacker

ElviraKurmanalieva

ShiliangLu

Marina(Rui)Wang

April2025

CARECInstituteQuarterlyEconomicMonitor∣April2025Page2of43

Disclaimer

This16thissueoftheCARECInstituteQuarterlyEconomicMonitorisco-authoredbyHansHolzhacker,consultant,ElviraKurmanalieva,SeniorEconomist,ShiliangLu,ResearchSpecialist,andMarina(Rui)Wang,SeniorResearchSpecialist

.1

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1Contributions:HansHolzhacker–Maintextpart,overallredaction;ElviraKurmanalieva–ExcursionI:Onpossibleimpactof

globaltradetensionsonCARECregion,AnnexI:CARECeconomies’dynamicsof2024;ShiliangLu–ExcursionII:ThePRC’s“TwoSessions”-developmentgoalsandpolicyorientationsfor2025,AnnexII:overviewofCARECcooperationinitiatives,AnnexIII:OverviewofCARECgreeninginitiatives;Marina(Rui)Wang–ExcursionIII:IndicationsfromUzbekistan’sWTOaccession

progressforTurkmenistan.

CARECInstituteQuarterlyEconomicMonitor∣April2025Page3of43

CONTENTS

Solidgrowthamidstheighteneduncertainty 6

ContinuedhighrealGDPgrowth;InternationalFinancialInstitutionsforeseesomedecelerationfor

2025and2026,butarelativelymoderateone 6

ExcursionI:OnthepossibleimpactofglobaltradetensionsonCARECregion 8

ExcursionII:ThePRC’s“TwoSessions”-developmentgoalsandpolicyorientationsfor2025 11

GDPbycomponents:growthwasprimarilydrivenbyservices,partiallybymanufacturing,whereas

miningresultswerestillrathermixed 12

Retailsalesandindustrialoutputbothgrewrelativelyfastinlate2024,withsomedivergencein

growthratesbetweencountriesthough,andperhapssomedecelerationinearly2025 15

Inflationhassomewhatre-acceleratedinmostCARECeconomies 16

There-accelerationininflationpromptedsomemonetarypolicytightening–growthinmoneysupply

slightlydeceleratedbutgrowthinloanstoindividualsremainedhigh 17

CARECcurrenciesgenerallysomewhatweakenedagainsttheRUBandEURinrealtermswhile

appreciatingagainsttheRMB 19

Externalsector:whereasnet-exporters’tradesurplusesweremostlynarrowing,thechangeinnet-

importers’tradedeficitswasrathermixed 20

ExcursionIII:IndicationsfromUzbekistan’sWTOaccessionprogressforTurkmenistan 23

Conclusion:Topreservetheregion’ssolideconomicperformancealsoinashakeneconomicworld

order,theopeningupnewopportunitiesshouldbeused 24

ANNEXI:CARECECONOMIES’DYNAMICSOF2024 25

ANNEXII:CARECCOOPERATIONINITIATIVESINTHEMEDIA 36

CARECgovernments’cooperationinitiatives 36

CARECcross-borderbusinessactivities 37

CARECintra-regionaleconomichighlights 40

ANNEXIII:CARECGREENINGANDCLIMATEADAPTATIONINITIATIVESINTHEMEDIA 42

CARECInstituteQuarterlyEconomicMonitor∣April2025Page4of43

Figures

Figure1.RealGDPgrowth(%,yoy) 7

Figure2.Stockmarkets(end2024=100) 8

Figure3.GlobalCommodityMarketIndex(end2024=100) 8

Figure4.ExportofCARECtotheUSA 9

Figure5.TotalexposuretotheUSA 9

Figure6.GDPbyorigin:Agriculture(%,yoy) 13

Figure7.GDPbyorigin:Manufacturing(%,yoy) 13

Figure8.GDPbyorigin:MiningandQuarrying(%,yoy) 14

Figure9.GDPbyorigin:MiningandQuarrying(%oversameperiodin2019) 14

Figure10.GDPbyorigin:Services(%,yoy) 15

Figure11.Retailsales(%,yoy) 15

Figure12.Industrialoutput(%,yoy) 16

Figure13.Inflation:Consumerpriceindex(%,yoy) 16

Figure14.Foodpriceinflation(%,yoy) 17

Figure15.Centralbankmonetarypolicyrates,percentperannum,endofquarter 17

Figure16.Broadmoney(%,yoy) 18

Figure17.Outstandingbankloanstoindividuals(%,yoy) 18

Figure18.Outstandingbankloanstothecorporatesector(%,yoy) 19

Figure19.Exchangerates(USD/nationalcurrency,Jan2020=1.00) 19

Figure20.Export(USDbased,FOB,%,yoy,3-month-moving-average) 20

Figure21.Commodityprices 21

Figure22.Import(USDbased,CIF,%,yoy,3-month-moving-average) 22

Figure23.Tradebalance(USD-based,monthlydatain%offull-yearGDP) 22

Tables

Table1.RealGDPgrowth(%,yoy) 7

Table2.CARECregion’slinkagesanddependencies(in%ofGDP) 10

Table3.PRC’smaintargetsfordevelopmentin2025 11

Table4.ComparativeAnalysisofWTOAccessionProgress(2024) 24

CARECInstituteQuarterlyEconomicMonitor∣April2025Page5of43

Abbreviations

ADBAsianDevelopmentBank

ADOAsianDevelopmentOutlook

CARECCentralAsiaRegionalEconomicCooperation

CIFCostInsuranceandFreight

COVIDCoronavirusDisease

CPIConsumerPriceIndex

EUREuro

FOBFreeonBoard

FYFiscalYear

GDPGrossDomesticProduct

GEPGlobalEconomicProspects

IMFInternationalMonetaryFund

MSMEMicro-,SmallandMedium-sizedEnterprises

PBOCPeople’sBankofChina

PRCPeople’sRepublicofChina

QEMQuarterlyEconomicMonitor

Q1FirstQuarter

Q2SecondQuarter

Q3ThirdQuarter

Q4FourthQuarter

RMBRenminbi

RUBRussianRuble

WBWorldBank

WEOWorldEconomicOutlook

yoyyear-on-year

CARECInstituteQuarterlyEconomicMonitor∣April2025Page6of43

Solidgrowthamidstheighteneduncertainty

InmostCARECeconomies,GDPgrowthacceleratedfurtherin2024fromstronggrowthalsoin2023.Themostdynamicgrowthelementwasservices,whileagricultureandmanufacturingweremorediverse

betweencountries,andminingremainedhighlyvolatile.Inflationgenerallyreacceleratedinlate2024and

early2025,promptingmorecautiousmonetarypolicies.Theincreaseinbroadmoneysupplysomewhateased,butgrowthinloanstoindividualsremainedhigh.Exchangerates,exceptforthefixedones,slightlyweakenedagainsttheUSD;inrealterms,mostofthemdepreciatedagainsttheRUBandtheEUR,whileappreciatingagainsttheRMB.Exportgrowthwassignificantlyimpactedbycommoditypricefluctuations,withgoldandcopperpricesrising,whereaspricesoffossilfuelswereonadownwardtrend.Importgrowthdifferedbetweencountriesdependingonthepaceofeconomicgrowthandotherfactors.Overall,surplusesofnet-exporterstendedtoshrinkwhiletheresultsfornet-importersweremoremixed.

InternationalFinancialInstitutionsexpectsomeslowdowninrealGDPgrowthformostCARECeconomiesin2025and2026,butaveragegrowthintheregion-andformostindividualeconomies-toremainabove4-5%yoy.AnnexIbelowdivesintothemainmacroeconomicdevelopmentsin2024andoutlooksforthesecountriesmoreindetail.ExcursionIIgivesanoverviewofmeasuresinitiatedbytheTwoSessionsinthePRCtoaccelerategrowth.Givenintensifiedtradewars,geopoliticalupheaval,withlikelysevereconsequencesfortheglobaleconomiclandscape,commodityprices,exchangeratesandmore,forecastrisksareveryhigh,ofcourse,andnegativeconsequencesfortheregioncan’tbeexcluded.ThepossibleimpactoftradetensionsontheCARECregionisdiscussedinExcursionI.Nevertheless,increasedinternationalinterestintheregion’sminingsectorandtransportationcorridors,combinedwiththecontinueddevelopmentoftheregion’sinternalsectors,shouldbefactorsthatsupportsolidgrowthintheregionalsointhecomingyears.EventhoughtheWTOispartiallydysfunctional,WTOaccessionremainsanimportantsteptofacilitateforeigntrade.ExcursionIIIdiscussesTurkmenistan’sprogressatthebackgroundofUzbekistan’srecentachievements.

ContinuedhighrealGDPgrowth;InternationalFinancialInstitutionsforeseesome

decelerationfor2025and2026,butarelativelymoderateone.

CARECrealGDPgrowthremainedgenerallyhighthroughoutthesecondhalfof2024.Averageregionalgrowthwasanestimated6.1%yoyinQ42024,littlechangedfrom6.2%yoyinQ32024(Figure1).TheKyrgyzRepublic,Tajikistan,andGeorgiaachievedspecificallyhighgrowthratesofestimated11.0%,8.4%,and8.3%yoy,respectively,inQ42024,after9.0%,8.8%,and11.0%inQ32024.Kazakhstan,Turkmenistan,andUzbekistanhadallgrowthratesofmorethan6%inQ42024,TurkmenistanandUzbekistanalsoinQ3

2024.ThePRC’srealGDPgrowthacceleratedto5.4%yoyinQ42024from4.6%yoyinQ3.Azerbaijan’sgrowthratecameinat2.3%yoyinQ4after4.9%yoyinQ3,andPakistan’sat1.7%yoyafter1.3%yoy.

InmostCARECeconomies,GDPgrowthwashigherin2024thanin2023.CAREC’saveragefullyear2024growthturnedouttobe5.7%yoy,upfrom4.6%yoyin2023(Table1).Eveninthecountrieswhichsawsomeslowdown,growthremainedabout5%yoy.ExceptforthePRCandPakistan,growthwasalsohigherthaninthepre-COVIDyearsof2015-19;inTurkmenistanitremainedunchanged.

CARECInstituteQuarterlyEconomicMonitor∣April2025Page7of43

Figure1.RealGDPgrowth(%,yoy)

25

20

15

10

5

0

-5

-10

-15

Q1/2018

Q2/2018

Q3/2018

Q4/2018

Q1/2019

Q2/2019

Q3/2019

Q4/2019

Q1/2020

Q2/2020

Q3/2020

Q4/2020

Q1/2021

Q2/2021

Q3/2021

Q4/2021

Q1/2022

Q2/2022

Q3/2022

Q4/2022

Q1/2023

Q2/2023

Q3/2023

Q4/2023

Q1/2024

Q2/2024

Q3/2024

Q4/2024

CAREC*

Azerbaijan

PRC

Georgia

Kazakhstan

KyrgyzRepublicMongolia

Pakistan

Tajikistan

Turkmenistan

Uzbekistan

*ReferstothesimpleaverageofCARECeconomieswheredataareavailable.

Note:Someeconomiesdon’tprovidequarterlydata,butpublishonlybylongerperiods,e.g.Jan-Sep;thefiguresinthischartareroughestimatesbytheauthorshowthesedatatranslateintogrowthratesofseparatequarters.

Source:CEIC,nationalstatisticalagencies,authors’calculations.

Goingforward,ADB/IMF/WBforecastsomedecelerationofgrowth.However,accordingtotheforecasts,growthistoremainatstilldecent4.9%yoyfor2025and4.5%yoyfor2026,fortheCARECregiononaverage(underadmittedhighforecastrisks).ForMongoliaandPakistan,theyenvisageanaccelerationcomparedto2024in2025and2026,forAfghanistanin2025.

Table1.RealGDPgrowth(%,yoy)

2015-

19

2020

2021

2022

2023

2024

2025F

2026F

2025F

2026F

AverageADB,

IMFandWB

ADB

IMF

WB

ADB

IMF

WB

Afghanistan

1.9

-2.4

-2.1

-20.7

-6.2

2.3

2.6

2.2

2.6

2.2

Azerbaijan

0.8

-4.3

5.6

4.6

1.1

4.1

3.2

2.7

3.4

3.5

2.7

3.3

2.5

2.4

PRC

6.7

2.3

8.6

3.1

5.4

5.0

4.4

4.1

4.7

4.0

4.5

4.3

4.0

4.0

Georgia

4.0

-6.3

10.6

11.0

7.8

9.4

6.0

5.0

6.0

6.0

6.0

5.0

5.0

5.0

Kazakhstan

2.5

-2.5

4.3

3.2

5.1

4.8

4.8

4.0

4.9

4.9

4.7

4.1

4.3

3.5

KyrgyzR.

4.2

-7.1

5.5

9.0

9.0

9.0

6.6

6.1

8.5

6.8

4.5

8.6

5.3

4.5

Mongolia

3.9

-4.6

1.6

5.0

7.4

4.9

6.4

6.0

6.6

6.0

6.5

5.9

5.9

6.1

Pakistan*

3.8

-0.9

5.8

6.2

-0.2

2.5

2.6

3.3

2.5

2.6

2.8

3.0

3.6

3.2

Tajikistan

6.9

4.5

9.2

8.0

8.3

8.4

6.7

5.6

7.4

6.7

6.0

6.8

5.0

5.0

Turkmenistan

6.3

5.9

5.0

6.2

6.3

6.3

4.4

4.1

6.5

2.3

6.0

2.3

Uzbekistan

5.8

1.6

8.0

6.0

6.3

6.5

6.1

6.1

6.6

5.9

5.8

6.7

5.8

5.9

CARECavg.

4.3

-1.3

5.6

3.8

4.6

5.7

4.9

4.5

5.4

4.9

4.8

5.1

4.4

4.4

*Thecolumnlabeled2023referstoFY2022/23,andsoon.

Note:Greenfiguresin2024indicatefastergrowththanin2023,redfiguresslowergrowth.Greenfiguresintheforecastsindicatefastergrowththanin2024,redfiguresslowergrowth.

Sources:ADB(ADO,April2025forecast),IMF(WEO,April2025forecast),WB(GEP,Jan2025forecast).

CARECInstituteQuarterlyEconomicMonitor∣April2025Page8of43

ExcursionI:OnthepossibleimpactofglobaltradetensionsonCARECregion

TheongoingtradetensionsbeganinearlyAprilwhentheUnitedStatesintroduceda10%baselinetariffonallimports,withsignificantlyhigherrates一reachingupto145%-appliedto57tradingpartners,includingCARECmemberssuchasthePRC,Pakistan,andKazakhstan.Severalaffectedeconomies,includingthePRC,respondedwithcountermeasures.Theseactionshaveescalatedtradeprotectionism,resultinginsubstantiallyhighertariffbarriersglobally.

Financialmarketsrespondedwithpredictablealarm.Majorglobalindices,includingtheNASDAQ,Nikkei225andDAX,postedsignificantdeclines(Figure2).Thesell-offrefIectedgrowinginvestors’concernaboutdisruptedsupplychainsandslowingglobalgrowth.CommoditymarketsreactedevenmoresharplywithBrentcrudeandWTIoilpricestumblingalongsideagriculturalcommodities,whilegoldpricesbuckedthetrendwithcontinuingpriceincreases(Figure3).

Figure2.Stockmarkets(end2024=100)

125

120

115

110

105

100

95

90

85

80

75

12/30/2024

01/06/2025

01/13/2025

01/20/2025

01/27/2025

02/03/2025

02/10/2025

02/17/2025

02/24/2025

03/03/2025

03/10/2025

03/17/2025

03/24/2025

03/31/2025

04/07/2025

S&P500

Nikkei:225

NASDAQKOSPI

DAX

SSE50Index

Source:CEIC,authors’caIcuIations.

Figure3.GlobalCommodityMarketIndex(end2024=100)

125

120

115

110

105

100

95

90

85

80

12/31/2024

01/07/2025

01/14/2025

01/21/2025

01/28/2025

02/04/2025

02/11/2025

02/18/2025

02/25/2025

03/04/2025

03/11/2025

03/18/2025

03/25/2025

04/01/2025

04/08/2025

FoodstuffGoldBrentOilWTIOil

Source:CEIC,authors’caIcuIations.

IntheCARECregion,theinitialeffectwasfeltonsomecurrenciesliketheMongoliantogrog,theUzbekistanisomandtheKazakhstanitenge,whichexhibitedslightlyincreasedvolatilityintheaftermathofthetariffannouncement.However,thebroaderCARECcurrencybasketdemonstratedrelativeresilience,depreciatingjustby0.3%onaverageagainsttheUSdollarsincethebeginningof2025.

TheapparentstabilitystemsfromthestructuralfactorsrevealedinTable2.MostCARECeconomiesmaintainmodesttradeexposuretotheUSmarket,withonlythePRC(2.1%ofGDP)andPakistan(0.9%ofGDP)runningmeaningfulsurpluses.Figure4showsexportsoftheCARECregiontotheUSA.ThemajorityofthePRC’sexportstotheUSAaremachineryandappliances.Thisproductgroupaccountsfor1.3%oftheGDPofthePRC.PakistanexportsmostlytextilestotheUSA,about1.4%ofPakistan’sGDP.AmongotherCARECcountriesthemostnotableshareinexportsisvehiclesandvesselsexportedbyMongolia,basemetalsexportedbyGeorgia,mineralproductsexportedbyKazakhstan,aswellasfootwear,textile,plasticsandvehiclesexportedbythePRC.

ThePRCandPakistanaremoreexposedtotheUSwhenconsideringalllinkages(Figure4).OECD’sTradeinValueAddeddatabaseprovidesdataforthetotalexposureofsomeCARECcountriestotheUSmarket,whichincludescaseswhengoodsareexportedtoathirdcountryandserveasinputintotheproductionofgoodsthatarelatersoldtotheUS.Figure5providesdataforthreeeconomiesintheCARECregion.

CARECInstituteQuarterlyEconomicMonitor∣April2025Page9of43

Figure4.ExportofCARECtotheUSA

in%ofexports

35

30

25

20

15

10

5

0

MON,

Vehicles&

vessles

GEO,Base

metals

PRC,PAK,Textile

Footwear

PRC,

PRC,

PRC,TextileMachinery

PRC,Vehicles&appnce

Plastics

PRC,Bsessels

metals

MON,

Precious

metalsKAZ,

Mineral

0.00.51.01.5

products

in%ofGDP

Source:Trademap,CEIC,authors’calculations.

Figure5.TotalexposuretotheUSA

DirectexposuretotheUS

3.5

3

2.5

2

1.5

1

0.5

0

PRC

Pakistan

Kazakhstan

0123

TotalexposuretotheUS

Source:OECD,CEIC,authors’calculations.

Thecurrenttradetensionssignalafundamentalrestructuringofglobaleconomicrelationships.FortheCARECregion,thismomentpresentsbothperilsandpossibility.InthelongertermtheypresentthefollowingchallengesforCARECregion:

lSlowerglobalandregionaldemand.Prolongedtradetensionscoulddepressglobaldemandandlowercommodityprices–particularlyforoil,gasandmetals,whicharecrucialexportsofseveralCARECeconomies.WeakerglobalandregionalgrowthwouldweighheavilyonCARECeconomiesthatareincreasinglydependentonglobaltradeandinvestments,particularlyfromthePRC.Forinstance,exportstothePRCaccountforabout87.4%ofMongolianexports,andmorethan10%forGeorgia,KazakhstanandTajikistan(Table2).

lLowercapitalandinvestmentsflow.Thetradetensionsincreaseuncertaintyinglobalmarkets,potentiallyaffectinginvestorconfidence.AccordingtotheStateCouncilInformationOfficeofthePRC

2

,accumulatedaboutUSD270billionfrom2013toOct2023,thePRC’sBeltandRoadInitiative(BRI)investmentshavetremendousimpactoneconomiesoftheCARECregion.IfPRC’soutwardinvestmentslowsduetodomesticheadwinds,theBRI-linkedinfrastructurefinancingandimplementationintheCARECregioncouldfacedelaysordownsizing.Atthesametime,tighteningglobalfinancialconditionsmayraisecostsofcapitalfortheCARECeconomies,increasingtheirfiscalvulnerability.

lExchangerateandinflationpressure.VolatileglobalfinancialmarketsandcapitalflowscouldputpressureonCARECcurrencies,particularlyincountrieswithmanagedexchangerateregimesandsignificanttradeexposure.Depreciationcouldleadtoanadditionalsplashininflation,especiallyincountriesreliantonimportedconsumergoodsandintermediateinputs.

lLowerremittancesflows.Althoughlessdirect,aglobaleconomicslowdowncouldaffectmigrantreceivingcountrieslikeRussiaandKazakhstan,withsecondaryeffectsonremittancesflowstoCARECcountrieslikeGeorgia,theKyrgyzRepublic,TajikistanandUzbekistan,whereremittancescomprisefrom14.4%to40.3%ofGDP(Table2).

2

/beltandroad/2023-11/24/content_116837913.htm

CARECInstituteQuarterlyEconomicMonitor∣April2025Page10of43

Table2.CARECregion’slinkagesanddependencies(in%ofGDP)

Mainexportcommodities(%oftotalexport)

USA

Exports(%oftotal)

Total

Tradebalance(%ofGDP)

Restof

CAREC

USAPRC

Russia

Remittances

(%ofGDP)

PRC

Restof

CAREC

Russia

machinery

exporter

PRC

Machinery&applieances(42.1%),chemicals&plastic(11.0%),textile&footwear(10.9%),base&preciousmetals(9.0%),vehicles&vessels

(6.5%)

15.7

2.2

2.7

4.7

2.1

0.2

-0.1

0.1

textile

exporter

Pakistan

Agriculture&food(22.1%),textile&footwear(58.6%),base&preciousmetals(4.3%)

19.0

8.9

4.5

0.3

-9.0

0.9

-3.80.2

-0.2

8.3

mineral

product

exporters

Azerbaijan

Mineralproducts(90.4%),agriculture&food(3.3%)

0.3

0.3

3.1

3.7

19.9

-1.1

-3.60.0

-2.6

3.5

Kazakhstan

Mineralproducts(67.6%),base&preciousmetals(13.8%),chemicals&plastic(6.8%),agriculture&food(6.6%)

1.8

16.7

8.2

11.8

11.8

-0.1

1.01.5

-3.7

0.2

Mongolia

Mineralproducts(84.8%),base&preciousmetals(8.6%),agriculture&food(2.3%)

0.4

87.4

0.1

0.8

14.2

-1.3

42.8-0.2

-12.5

2.6

Mineral

Turkmenistan

(9.3%),

products(81.7%),chemicals&plastictextile&footwear(5.7%)

0.0

0.6

0.2

0.0

15.0

-0.1

13.31.9

-0.4

0.0

metals

exporters

KyrgyzRepublic

Base&preciousmetals(44.8%),agriculture&

food(16.8%),mineralproducts(16.0%),textile&footwear(13.6%),machinery&appliances(8.7%)

0.2

2.8

29.0

26.8

-51.5

-1.9

-28.7-4.2

-9.8

26.5

Tajikistan

Base&preciousmetals(40.0%),mineral

products(35.3%),textile&footwear(16.8%),

0.0

12.9

32.9

5.3

-31.1

-0.5

-7.3-6.9

-13.5

40.3

Uzbekistan

Base&preciousmetals(45.9%),textile&

footwear(19.8%),agriculture&food(10.9%),mineralproducts(6.7%),chemicals&plastic(5.7%)

0.3

9.5

20.0

14.4

-14.2

-0.3

-6.8-2.0

-4.0

14.4

agriculture

andfood

exporters

Afghanistan

Agriculture&food(58.6%),mineralproducts(18.6%),textile&footwear(11.4%)

1.3

2.9

45.5

0.1

-31.7

-0.2

-5.2-9.0

-0.5

2.1

Georgia

Agriculture&food(34.5%),mineralproducts(24.0%),chemicals&plastic(10.3%),base&preciousmetals(7.2%)

5.0

13.6

9.2

17.6

-31.2

-4.4

-2.53.1

-3.5

14.4

Sources:CEIC,Trademap,nationalagencies,authors’caIcuIations.

Atthesametimethecurrentenvironmentpresentspotentialadvantages:

lTradereorientation.Astariffsmaketradedgoodsmoreexpensive,theremaybeopportunitiesforCARECexporterstoadjusttheirtradingpartners一especiallyinsectorswheretheyholdcompetitiveadvantages(Table2).Theseincludeagricultureandfoodproducts(Afghanistan,GeorgiaandPakistan),mineralproducts(likeAzerbaijan,Kazakhstan,MongoliaandTurkmenistan)metals(likeKyrgyzstan,TajikistanandUzbekistan),andtextiles(likePakistan).However,capacityconstraintsandstructuralchallengesinCARECeconomiescouldlimittheirabilitytofullycapitalizeontheseopportunities.

lSupplychainrealignment.Globaltradetensionscouldaccelerateshiftsinglobalsupplychains,creatingopportunitiesforCARECcountriestopositionthemselvesaslogisticshubsoralternativemanufacturingbases.TheMiddleCorridorcouldemergeasacriticaltraderoute,offeringCARECeconomiesachancetoleveragetheirgeographicpositionforlogisticsandtransit.However,thiswouldrequiresignificantinvestmentininfrastructure,humancapitalandregulatoryreformstoattractandattaininvestors.

NavigatingthisvolatilelandscapewillrequireCARECregiontopursuecoordinatedmultifacetedresponse.Tradediversificationlookslikeanimmediatepriority.WhilethePRCwillremainthedominanteconomicpartner,strengtheningtieswithEurope,SouthAsiaandMiddleEasternmarketscouldprovidecrucialbenefits.

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Macroeconomicstabilizationmeasuresandstructuralreformstakeonrenewedurgencytobuildresilienceandimprovecompetitiveness.Buildingforeignexchangereserves,enhancingmonetarypolicyframeworks,anddevelopinglocalfinancialmarketscanhelpinsulateeconomiesfromexternalshocks.Streamliningcustomsprocedures,upgradingtransportinfrastructureandharmonizingregionaltraderegulationscouldhelpCARECregiontocapitalizeonglobalsupplychainshifts.

ExcursionII:ThePRC’s“TwoSessions”-developmentgoalsandpolicyorientationsfor2025

Foryears,theannualmeetingsofChina'sNationalPeople'sCongress(NPC)andNationalCommitteeoftheChinesePeople'sPoliticalConsultativeConference(CPPCC),knownasthe“TwoSessions”,havebeenahighlyanticipatedeventforalltoknowaboutthePRC’sforthcomingnationalagenda.Duringthe“TwoSessions”,thecentralgovernmentnotonlysetsannualgrowthtargetsfortheyear,butalsopublicizesmanyothereconomic,socialandlegislativeplansthatarecrucialtothecountry'ssustainabledevelopment.

Theyear2025witnessesathirdyearwhentheChinesegovernmenttargetsitsGDPgrowthratetobearound5%(Table3).Whilethetargetiswellalignedwiththecountry’smid-andlong-termdevelopmentgoals,itseekstostabilizeemployment,preventrisks,andimprovethepeople’sgeneralwellbeing.Asaresult,thesurveyedurbanunemploymentrateissetataround5.5%,withaprojectionofover12millionnewurbanjobstobecreated.CPItargetisadjustedfromabout3%for2024toaround2%thisyear,reflectingamorepragmati