Emerging Markets Insights: China's evolving consumer landscape

Emerging markets are entering 2026 with improving earnings momentum, led by technology and platform companies in Korea, Taiwan and China, even as tariff uncertainty lingers. China’s consumption recovery remains uneven, but on-the-ground research points to new growth pockets in areas like farm automation, advanced cooling for livestock and functional consumer products such as energy drinks tailored to delivery drivers and livestreamers. The upcoming nine-day Spring Festival should provide a modest lift to domestic spending and tourism, reinforcing the shift toward homegrown demand rather than outbound travel.

Korean semiconductor stocks have already enjoyed a powerful rerating on the back of surging memory prices and disciplined capex, leaving investors weighing how much future earnings strength is now priced in. Against this backdrop of strong EM equity performance year-to-date—particularly in Asia—selectivity will be critical as markets balance structural opportunities in AI-driven tech and consumption upgrades with ongoing risks from policy shifts, tariffs and an uneven global growth outlook.