Global Policy Report 2026

Executive Summary

In Europe, policymakers are entering a cycle of regulatory consolidation and administrative simplification. The European Commission is pursuing the Digital Omnibus package, environmental simplification initiatives, and is preparing for the 2028-2034 Multiannual Financial Framework. Member States are simultaneously advancing national agendas, from France’s fiscal stabilisation and Germany’s climate-energy acceleration to Italy’s AI governance, Dutch semiconductor strategy, and Sweden’s nuclear and digital-safety debates. Central and Eastern Europe continues to align with EU benchmarks while facing political and implementation limitations.

In North America, policy attention is centred on strategic infrastructure, cybersecurity, and resource governance. Canada is accelerating energy and mining approvals and strengthening cyber protections, while Mexico is tightening water-concession rules in response to structural shortages. Across the region, governments are focusing on domestic resource security, cross-border trade frameworks, and technology-led financial innovation.

In South America, political transitions and upcoming elections are shaping regulatory priorities. Brazil faces tensions between environmental protection and sectoral pressures, while electoral dynamics influence investor expectations. Colombia is entering a period of political uncertainty ahead of its 2026 election, and Chile is balancing its leadership in renewables with structural water scarcity and a potential political shift toward the right.

In the Middle East and Africa, governments are advancing ambitious economic-transformation agendas. Saudi Arabia is scaling green-energy capacity and building a region-leading digital infrastructure ecosystem. The UAE is consolidating its crypto-asset regulatory framework and modernising health-related taxation. Ghana continues to combat inflation and sector-specific pressures.

In the Asia-Pacific region, rapid regulatory expansion is reshaping digital governance, AI oversight, industrial policy, and climate strategy. Australia, Singapore, South Korea, and the Philippines are establishing new online safety and AI governance frameworks. India and China are doubling down on renewable energy, manufacturing modernisation, and strategic-sector development. Japan is advancing economic-security rules and AI deployment in public services, while Indonesia is streamlining business licensing to attract investment.

Europe

European Union; digital omnibus, simplification, circular economy

The EU is operationalising the Digital Euro, selecting critical infrastructure vendors and addressing implementation barriers ahead of legislative adoption. In parallel, the second phase of the Instant Payment Service Regulation mandates immediate bank transfers for payment service providers across the euro area, with application to certain non-EU countries by January 2027. These measures aim to enhance cross-border trade, improve cash-flow management, and reduce reliance on non-EU providers.

The European Commission is also streamlining digital regulation. Recognising that prior laws, including the Digital Services Act (DSA), Digital Markets Act (DMA), and Data Act, imposed excessive compliance burdens, the Commission has introduced the Digital Omnibus proposal and launched a comprehensive Digital Fitness Check to reduce overlap, simplify reporting, and clarify enforcement, particularly for AI integration. Joint European Data Protection Board (EDPB) and Commission guidelines aim to reconcile DMA and General Data Protection Regulation (GDPR) requirements to ensure competitive and compliant digital markets.

More broadly, the Commission is pursuing several simplification packages to reduce administrative requirements and make procedures less bureaucratic. Negotiations on the Environmental Omnibus, whose draft was submitted in December 2025, will also begin in 2026.

The Commission will additionally launch initiatives such as the Industrial Accelerator Act, investing in strategic sectors, reforming the single market for innovation, and implementing new carbon pricing (ETS2). The Circular Economy Act, expected in 2026, is likely to harmonise Extended Producer Responsibility schemes.

A major political and budgetary focus in 2026 will be the debate, finalisation, and adoption of the future Multiannual Financial Framework (MFF 2028–2034), which will set budget allocations and priorities for the next decade.

France: public debt, political instability

France is set to implement structural reforms to make its public finances more sustainable. Tight public finances and debt stabilisation will be a priority, requiring budget discipline and freezes on certain social benefits. The 2026 draft budget envisages a freeze on pensions and other social transfers.

Political instability will persist, with a fragile majority, as the government led by Sébastien Lecornu is a minority coalition that depends heavily on swing votes from other parties to pass budgets and reforms. An important development to watch is the approval of the 2026 budget. If it faces strong opposition and fails to be adopted, France could face disruption to its spending or be forced to adopt austerity measures.

Advancing renewables in the energy mix remains a priority, gradually shifting from a dominant nuclear focus to alternative sources such as wind, solar, biogas, and heat pumps. France seeks to diversify its energy mix and increase investment in renewable energy.

Germany: renewable energy investments, cybersecurity developments

Germany is advancing toward climate neutrality by 2045, prioritising a secure and affordable renewable energy supply. To meet rising demand and expand renewables, the government is accelerating the expansion and secure operation of power grids, addressing bottlenecks, enabling cross-border electricity trading, and developing extra-high-voltage infrastructure. Key legislative initiatives include the abolition of the gas storage levy; acceleration of geothermal plants, heat pumps, and heat storage; implementation of the EU Renewable Energy Directive for offshore wind and electricity grids; and amendments to the Energy Industry Act (EnWG Amendment 2025) to strengthen consumer protection.

In cybersecurity, Germany is implementing the NIS2 Directive alongside new measures to expand federal cyber-defence powers, deepen civil-military cooperation, and develop the semi-automated Cyber Dome system. The government is also pursuing administrative simplification, aiming to reduce bureaucratic costs by €16 billion and compliance burdens by €10 billion, without lowering standards on human rights, consumer rights, or tax fraud prevention.

The Critical Infrastructure Protection (KRITIS) umbrella bill establishes uniform minimum requirements for the physical protection of critical infrastructure, complementing NIS2 implementation and creating a more holistic approach to resilience against both digital and physical threats.

Italy: AI act, innovation, governance

Italy’s AI Act (Law 132/2025) entered into force on 10 October 2025, introducing the first national comprehensive framework for the development, testing, and use of artificial intelligence. The coming years are expected to mark the transition from a formal regulatory framework to a fully operational enforcement regime under the AI Law. Following its adoption, national supervisory authorities will progressively activate their supervisory, inspection and sanctioning powers. This phase will be necessary to clarify the concrete liability profiles of AI developers, deployers and users, while ensuring full alignment between national enforcement mechanisms and the EU AI Act. In particular, supervised sectors such as banking, insurance and financial services will be required to integrate AI-specific governance, risk management and internal control frameworks into their existing compliance structures.

Netherlands: coalition talks, digital innovation, semiconductors

Coalition negotiations have begun between the two centrist parties, Democrats 66 (D66) and Christian Democratic Appeal (CDA), who are expected to form the backbone of the next government. Key priorities under discussion include creating a new ministerial position for technology and innovation, a National Investment Bank and expanding government procurement and subsidies to reach R&D investments of 3% of GDP. Industry stakeholders are pushing for stronger coordination, joint programming, and increased investment in the semiconductor and microelectronics sectors. This momentum reflects the agenda outlined at the Semiconductor and Electronics Joint Roadmap Event, which aims to shape a long-term innovation strategy.

Norway: healthy marketing

Norway published guidelines on enforcing a marketing ban on certain foods for children. The regulation imposes a complete marketing ban on products such as chocolate, confectionery, snacks, and other sweetened products. Starting from October 2025, the government has announced a six-month transition period to help those affected by the regulations adapt to the new rules. Fines for violations will apply from January 2027, allowing regulators time to publish detailed guidance and monitor initial compliance responses. The government is already signalling that this initiative is part of a broader shift toward healthier food environments, critically reviewing how all marketing channels, including digital, influencer-led, and in-store promotions, are used.

Poland: decarbonisation, energy and security amid political tensions

Donald Tusk’s government is attempting to accelerate Poland’s green transition. However, Poland still lacks a coherent long-term climate roadmap, and in October 2025 the European Commission referred Warsaw to the Court of Justice of the EU for failing to submit both an updated National Energy and Climate Plan and a long-term emissions reduction strategy, making the country an outlier in the EU and signalling possible financial penalties if the impasse persists.

A key reason for delay is the president’s veto power. Former President Duda and now President Nawrocki have blocked or threatened to block several major reforms, effectively raising the bar for contested legislation: Tusk commands only a narrow majority of about 52% in the Sejm, whereas overriding a presidential veto requires a three-fifths majority (60%). Nawrocki has signalled that he will resist what he portrays as steps towards a “European super-state”, forcing the government into piecemeal compromises and the postponement of sensitive reforms. As a result, 2026 is likely to see slow progress on contentious areas such as judicial reform, social policy and parts of climate legislation.

By contrast, defence and power-sector policy will remain the two most dynamic tracks. The draft 2026 budget lifts defence spending to around 4.8% of GDP, the highest in NATO, with officials openly discussing a 5% target and prioritising big-ticket modernisation and industrial partnerships such as the recent Embraer–PGZ cooperation. On energy, 2026 will be a bridge year: the EU has granted Poland a derogation to keep certain coal-fired units in the capacity market.

Sweden: nuclear expansion, digital safety

Sweden is exploring the expansion of nuclear power capacity on two coastal islands to enhance energy security, improve grid stability, and reduce transmission losses. The initiative enjoys conditional cross-party support and aligns with the country’s 2045 net-zero target and EU decarbonisation objectives.

On digital safety, the Ministry of Health and Welfare has appointed a special investigator to assess the feasibility of raising the minimum age for children’s social media use beyond the current 13-year threshold. The investigation will consider EU-wide standards on digital identity, privacy-preserving applications, and age verification, with a final report due by 14 November 2026.

Switzerland: public health, sugar regulation

With healthcare costs rising, Switzerland is seeking ways to reduce preventable health problems, particularly the increasing prevalence of obesity among adults and children. As a result, policymakers are expected to implement measures to reduce sugar consumption, such as tighter rules on sugar content in foods and beverages, alongside initiatives to promote awareness of healthy diets.

United Kingdom: financial services, crypto innovation

The UK is pursuing several financial services and digital asset agreements that collectively point to a strategy of building closer ties with other major financial centres. By advancing the Berne Financial Services Agreement (BFSA) with Switzerland, the UK is prioritising mutual market access and regulatory alignment, with a focus on capital markets and emerging assets such as crypto. Simultaneously, the Bank of England’s collaboration with Singapore and Thailand on synchronised foreign exchange settlement and tokenisation/crypto assets signals a shift toward an outward-looking regime that seeks to reduce trade friction and lead on digital innovation while maintaining robust financial-stability standards. ]

These developments highlight a trend of the UK systematically shifting its regulatory framework from rigid restriction to pro-growth pragmatism. The government is seeking to reduce burdens on firms, consolidate oversight, liberalise market regulations, and encourage the uptake of innovative technologies. It has launched consultations to reduce administrative burdens by 25% and is streamlining fragmented AML/CTF regulations and oversight by establishing a single supervisory body. The government also introduced its controversial budget bill to Parliament, proposing increased taxes on dividends and property, whilst simplifying rules on corporation tax and increasing the minimum wage.  

At the same time, the Financial Conduct Authority (FCA) is shifting its regulatory approach, focusing enforcement on speed and pragmatic cooperation with stakeholders rather than volume, while expanding retail access to crypto products and encouraging firms to engage in shaping new regulation. To this end, the FCA has launched a consultation on proposed new rules for financial fund tokenisation.

Central and Eastern Europe: EU alignment, tax, and digital reforms

In Central and Eastern Europe, governments are actively aligning national policies with EU standards while pursuing domestic priorities. Turkey is focused on expanding double-tax treaties, disinflation measures, and anti-money-laundering reforms to maintain Financial Action Task Force (FATF) compliance and attract foreign investment. Bulgaria is preparing for euro adoption with banking and fiscal law adjustments, anti-corruption amendments, healthcare reforms, and energy liberalisation measures.

Czechia and Romania are transposing EU digital laws, including the DMA, DSA, NIS2, AI, and cybersecurity regulations, while pursuing energy and climate initiatives in line with the EU Green Deal and Fit for 55 targets. Tax reforms in both countries aim to simplify VAT procedures and implement OECD Pillar 2 standards. Latvia is similarly aligning with EU digital and tax regulations. Ukraine is introducing legal frameworks to attract foreign investment for post-war reconstruction and improve transparency, while continuing efforts to comply with EU standards under its Association Agreement.

North America

Canada: energy projects, cybersecurity, trade

Canada is accelerating strategic energy and infrastructure development through the newly established Major Projects Office (MPO), designed to fast-track approvals and create clearer regulatory pathways in the energy, mining, and infrastructure sectors. This initiative positions Canada as a potential “energy superpower,” supporting both conventional and renewable energy projects.

In cybersecurity, Bill C-8, the Cyber Security Act, strengthens the protection of critical infrastructure by amending the Telecommunications Act and introducing the Critical Cyber Systems Protection Act. The legislation imposes cybersecurity obligations on federally regulated entities in key sectors, including finance, energy, telecommunications, and transportation.

On trade, Canada is expanding its global footprint through new agreements, including a bilateral trade deal with Indonesia that eliminates or reduces tariffs on over 95% of Canadian exports. High-level visits to Malaysia, Singapore, and Korea underscore Canada’s ongoing commitment to international trade engagement.

Mexico: water scarcity, industrial concessions

In Mexico, following a longstanding drought and water-management challenges, Congress approved a government bill to tighten the framework for industrial water concessions. President Sheinbaum’s proposal strengthens procedures for issuing and renewing concessions and prioritises human consumption and sustainable resource management. These measures are likely to affect industrial water access, especially in vulnerable regions.

Pressure on water resources and climate-change impacts will likely affect Mexico’s agriculture, resource extraction, and water-intensive industrial sectors, creating both regulatory risks and opportunities for water-efficient technologies and more sustainable resource governance.

South America

Brazil: elections, climate, regulatory shifts

The Brazilian Congress succeeded in watering down environmental-protection legislation despite contrary public opinion and resistance from parts of the government. This is likely to be the object of court disputes in the coming year, but pressure from key sectors such as agribusiness, mining, and oil and gas means the shift is unlikely to be fully reversed. Nonetheless, expansion of the renewable energy sector is still expected, especially wind and solar, with meaningful legislative debate pointing to regulatory changes affecting power grids and the overall electricity system.

National elections are approaching in a regional context of a broader pivot to the right, but the current President, Luiz Inácio “Lula” da Silva of the centre-left Workers’ Party (PT), remains the favourite. This is likely to maintain the current difficult relationship between a conservative, right-leaning Congress and the federal government.

Another key development to watch in 2026 is the Anti-Crime Constitutional Amendment, already approved by the Chamber and likely to be amended by the Senate before returning to the Chamber again. Right and left-wing parties in the Parliament have diverging opinions on such security topics likely impacting the proposal and creating implications for anti-money laundry compliance.

Colombia: electoral realignment

The next Colombian presidential election is set for 31 May 2026. Incumbent president Gustavo Petro, Colombia’s first left-wing leader, is constitutionally prevented from seeking immediate re-election. The governing left-wing coalition, Pacto Histórico, is working to transition from a loose alliance into a formal political party yet the latter has lost popularity in the latest political cycle. On the opposition side, traditional centre-right and right-wing groups are exploring the creation of a broader coalition. The Colombian Liberal Party and the Democratic Centre are reportedly coordinating efforts and may unite behind a single candidate to challenge the left. However, internal divisions within these parties could hinder their ability to present a united front. It is still unclear whether the outcome of the 2026 election will move towards the consolidation of a unified left or a resurgence of centre-right and right-wing forces via new alliances.

Chile: renewables, water governance

Chile continues to position itself as a regional leader in renewable energy and the energy transition. Solar power has grown rapidly over the past decade, reflecting Chile’s strong commitment to decarbonising its power mix.

Water scarcity remains a structural challenge, especially in the north, where mining and agriculture compete for finite water resources. The combination of drought and intensive water demand is creating increasing pressure on water governance, driving debate on further regulation of high-intensity sectors and reforms focused on water reuse and responsible consumption.

Chile is also seeking to expand a Green Hydrogen funding programme that has already been approved by the Chamber and has broad cross-party support, although there is some opposition from the Republican Party.

Chile’s legislative landscape will also be shaped by the Presidential Elections in December 2025. The country appears to be leaning toward a right-wing turn, though it is not yet clear whether this will translate into significant shifts in economic and digital policy. A more liberal, less regulatory approach is likely, but the campaign is currently focused on law enforcement and anti-immigration issues.

Middle East & Africa

Egypt: energy expansion, plastic reform

Egypt plans to increase its renewable energy capacity. By 2026, the country targets adding around 12 GW of wind and solar capacity, with solar-panel production expected to begin domestically in early 2026 (with up to 90% local content), signalling a strong drive toward energy self-reliance. Additionally, the government has committed  billions in large-scale investments in the power and renewable energy sector for the fiscal year 2025/26, signalling an expansion of electricity output, grid modernisation, and stronger public-private collaboration in energy. 

Additionally, Egypt extended its national circular-economy initiative targeting single-use plastics by one year, shifting its end date to 2027. As part of its next phase, the government has called for establishing factories that produce plastic alternatives, especially in coastal and tourist governorates, to create ‘plastic-free cities’ and reduce transport costs.

Ghana: inflation, cocoa sector

Ghana will continue to battle inflation while attempting to provide relief to cocoa farmers, a task that will be complicated if weather conditions continue to lead to poor cocoa yields. Ghana also risks losing its position as the world’s second-largest cocoa producer to Ecuador. Nonetheless, growth forecasts for 2026 are generally positive.

Israel: economic recalibration 

Israel’s coalition government has submitted its 2026 budget, one of the largest in the country’s history at roughly NIS 662 billion, signalling a recalibrated fiscal approach that pairs a sizeable defence allocation of around NIS 112 billion with domestic measures to ease living costs and boost market competition. Beyond high security spending, the budget advances policies to liberalise dairy imports to lower prices and challenge entrenched market structures, while also introducing competition-focused reforms in the banking sector, including closer scrutiny of profits. Together, these moves reflect a more interventionist economic stance that combines elevated public spending with targeted regulatory tools to reduce consumer costs, open protected sectors, and strengthen economic efficiency through 2026.

Morocco: green transition

Morocco is fast-tracking its energy transition through the 2026 Finance Bill, which expands renewable deployment, advances large-scale battery storage, tightens efficiency standards, reformulates sectoral legislation, and boosts demand for smart buildings and energy-efficient technologies. At the same time, the country is continuing to position itself as a strategic future green hydrogen supplier to Europe, backed by major investment programmes, land allocation, and growing diplomatic alignment, signalling a shift toward Morocco becoming a regional clean-energy exporter.  

Nigeria: digital finance, market modernisation

Nigeria is moving toward a comprehensive legal architecture for its digital economy as the draft National Digital Economy and E-Governance Bill establishes rules for electronic transactions, digital signatures, secure records, digital public services, data-exchange platforms, cybersecurity duties, AI governance, regulatory sandboxes, and digital-skills development. This signals a significant shift toward institutionalised e-government, structured data protection, public-sector digitisation, and oversight of AI and emerging technologies. 

Furthermore, the Securities and Exchange Commission of Nigeria rolled out broad market-reform measures under the new Investments and Securities Act (ISA) 2025 framework, strengthening regulatory clarity and governance, including rules on securities, commodities and derivatives. The reforms are designed to modernise the capital markets, improve transparency, streamline settlement cycles, and enhance the legal environment for domestic and foreign investors. This push in 2026 should rebuild investor confidence, deepen market liquidity, and attract greater participation from both institutional and retail investors across equities, commodities and financial instruments. 

Saudi Arabia: green energy, digital infrastructure

Saudi Arabia is intensifying its clean-energy transition as part of Vision 2030, with 2026 expected to mark an acceleration in green-economy investments. NEOM’s green-hydrogen plant, large-scale solar and wind tenders, and carbon-capture pilots signal a shift toward low-carbon industrial production and export-driven hydrogen capacity. The facility is expected to produce 250,000 tonnes of green hydrogen annually by 2026.

Concurrently, Saudi Arabia is deepening its digital transformation by expanding core infrastructure. A sustained pipeline of hyperscale data-centre builds, sovereign-cloud initiatives, and AI-driven platforms signals the Kingdom’s intent to position itself as the Gulf’s dominant digital-innovation hub. The data-centre market, valued at approximately USD 2.11 billion in 2025, is projected to nearly double to USD 3.9 billion by 2030, while IT power capacity is expected to rise from 0.41 thousand MW to over 1 thousand MW over the same period. Publicly backed entities, including the Public Investment Fund, the Digital Government Authority, and the Communications, Space and Technology Commission, are shaping a cohesive investment and regulatory ecosystem that encompasses cloud capacity, national data governance, platform accountability, and cybersecurity resilience. These initiatives underpin broader economic-diversification goals by enabling scalable digital services, supporting smart-city environments, and attracting global technology partnerships.

United Arab Emirates: crypto regulation, public health

The UAE’s Federal Decree-Law No. 6 of 2025 marks a significant step in positioning the UAE as a regulated global crypto hub. It places virtual assets, stablecoins, DeFi, tokenised assets, exchanges, wallets, and blockchain services under Central Bank oversight, replacing fragmented rules with a unified federal regime. The law mandates licences for all crypto businesses and introduces penalties for unregulated activity, strengthening market integrity and consumer protection. By embedding digital assets into mainstream financial supervision, the UAE signals regulatory maturity and aims to attract institutional players, exchanges, and fintech innovators.

To promote public health, from 1 January 2026, the UAE will also replace a flat 50% excise on soft drinks with a tiered, sugar-content-based tax model, whereby beverages are taxed according to their sugar or sweetener content per 100 ml. This aims to curb sugar consumption and related public-health issues such as obesity and diabetes, and to encourage producers to reformulate drinks. By linking fiscal policy with health priorities, the UAE seeks to lower healthcare burdens, promote healthier lifestyles, and align with global best practices in preventive nutrition policy.

Asia-Pacific

Australia: online safety, age controls

Australia has released multiple comprehensive regulatory guidances to help the digital industry prepare for the rollout of its new Online Safety Codes and Standards, which impose mandatory safety obligations on a wide range of online services. These codes and standards, developed under the Online Safety Act 2021, require platforms to take proactive, systemic measures to reduce Australians’ exposure to harmful online content. 

These codes apply across eight industry sectors, ranging from social media and messaging services to search engines, app stores, hosting services, and even device manufacturers. New age-restricted codes will come into force from 27 December 2025, initially targeting search engines. Under these rules, search engines must blur sexual or violent images by default for users who may be children and provide automatic redirections to support services for searches related to suicide, self-harm or eating disorders. 

These obligations complement the social media age-assurance reforms taking effect on 10 December 2025, mandating that specified platforms block account creation and ongoing access for users under 16.

India: data regulation, renewable energy, and manufacturing

India’s newly enacted Digital Personal Data Protection Regulation, the country’s first-ever data privacy law, marks a major institutional shift toward regulated data governance, strengthening both individual rights and organisational accountability. The framework clearly defines obligations for Data Fiduciaries, rights and consent safeguards for Data Principals, and enforcement authority through the Data Protection Board of India (DPBI). It operationalises compliance mechanisms, including impact assessments, breach reporting, grievance redressal, penalties for violations, and heightened obligations for designated Significant Data Fiduciaries. Its implementation would highlight a maturing digital economy in which privacy, cybersecurity, trust infrastructure and responsible innovation become foundational to how businesses collect, process and monetise data in 2026. 

India is accelerating its transition to renewable energy in response to global pressure to achieve climate neutrality. The country has significantly invested in renewable alternatives and expanded its non-fossil fuel capacity. The latest budget increases funding allocations for renewables and green infrastructure, including hydrogen, battery storage, and grid development. This trend of decarbonisation and broader energy-mix diversification is expected to continue in 2026.

Finally, India is seeking to position itself as a manufacturing and supply-chain base for high-tech products and green-technology components such as batteries, solar modules, and electronics, driven by the Production-Linked Incentive (PLI) scheme. The objective is to strengthen supply chains and support domestic manufacturing, particularly for electronic components.

Singapore: online regulation, nuclear energy, digital innovation

Singapore has created a dedicated government agency to address online harms, signalling recognition that digital safety is a core public-governance responsibility. This reflects wider global pressures on governments to regulate tech platforms, enforce accountability in digital spaces, and ensure compliance with takedown orders. These reforms indicate the government’s strategy to address escalating cyber threats and online dangers by strengthening enforcement, improving accountability, and enhancing incident-response protocols.

The government is also evaluating civil nuclear-energy development amid shifting geopolitical priorities, reflecting broader efforts to enhance energy security and align with international nuclear-safety standards. Singapore has never had a nuclear-energy programme, but political and strategic considerations are prompting a reassessment of options.

In addition, Singapore is consolidating its position as a regional innovation leader through its ‘Smart Nation’ vision and digital-economy strategies. Ranked first in digital infrastructure in the Asian Digital Transformation Index, Singapore’s digital growth is providing a model for other Asian nations as they pursue their own digital transformations.  

Japan: AI governance, economic security

Japan is advancing AI regulation through the AI Strategic Headquarters and the AI Basic Plan, pursuant to the AI Promotion Act. The plan outlines the government’s strategic approach to research, development, and responsible utilisation of AI technologies. Public authorities are encouraged to use AI to streamline services, improve efficiency, and deploy AI tools for tasks such as document processing and translation, positioning AI as a key lever for public-sector productivity.

Japan is also updating its definition of ‘critical supplies’ and ‘critical infrastructure’ for economic-security purposes, adding several products to the critical-goods list. This aims to strengthen supply-chain resilience and reduce reliance on foreign manufacturing, an increasingly important objective amid rising global tensions and geopolitical supply-chain fragility.

Philippines: AI regulation, digital governance

The Philippines is developing an AI regulatory framework to support digital-economic growth, mitigate disinformation and deepfakes, and prevent foreign interference. These initiatives will be highlighted during the country’s ASEAN chairmanship in 2026 and reflect broader regional trends toward AI governance, as seen in APEC and Japan.

The government is working on a unified national AI strategy seeking to deploy AI in public services, agriculture, and education, and to support small and medium-sized enterprises. The Philippines is also preparing rules to address AI-specific risks in the banking and financial sector.

Indonesia: licensing reform, investment climate

Indonesia is implementing Government Regulation (PP) Number 28 of 2025 on risk-based business licensing, followed by sector-specific regulations covering postal services, telecommunications, broadcasting, food and drug oversight, and waste management. These regulations aim to streamline licensing and ensure sectoral compliance, reducing bureaucratic barriers for foreign and domestic investors. PP 28/2025 establishes a more streamlined licensing regime for businesses operating in Free Trade Zones. It centralises authority in the Free Trade Zone Authority and simplifies key requirements, including exemptions from ‘Spatial Use Approval’ applications and reduced environmental approval obligations.

Across sectors, businesses are categorised based on associated risk. Acquiring a Business Identification Number (BIN) is easier for lower-risk businesses, allowing them to start operations quickly with less documentation and regulatory paperwork. Medium- and high-risk businesses must submit additional documentation after receiving a BIN, effectively segmenting the regulatory environment. These measures are designed to make Indonesia more investment-friendly and attract foreign capital, particularly in green energy and digital sectors.

South Korea: AI act, digital assets, industrial safety

South Korea is preparing a comprehensive set of AI-related legislative proposals under the ruling Democratic Party of Korea (DPK), with a combined framework expected to harmonise technology governance. The national AI framework, the ‘AI Basic Act,’ taking effect in January 2026, establishes a risk-based distinction between regular and high-impact AI applications. High-impact AI will be subject to stricter oversight, transparency, bias-monitoring, and potentially human-in-the-loop safeguards. Concurrently, South Korea is advancing digital-asset regulation, planning a Digital Asset Basic Act to regulate cryptocurrencies and stablecoins better.

The DPK has also introduced several proposals to amend the Occupational Safety and Health Act, signalling a strong political commitment to strengthening industrial-accident prevention, increasing corporate accountability, and enhancing regulatory oversight. The overarching trend is a shift from post-accident punitive measures to proactive prevention, including requirements for regular disclosure of safety status, expanded powers for the Minister of Employment and Labour to issue pre-emptive work-stoppage orders, and higher financial penalties for repeat fatal accidents. For private companies, this implies additional compliance and administrative burdens, stricter limitations on subcontracting for high-risk work, heightened transparency requirements through public disclosure of accident reports and safety status, and stronger legal protections for workers’ rights to stop work and report violations.

China: industrial modernisation, tech self-reliance, trade diversification

The Central Committee of the Communist Party of China released its official recommendations for the 15th Five-Year Plan on 28 October, charting China's economic and social development priorities for the 2026-2030 period. This plan, expected to be formally released and implemented in March 2026, primarily focuses on modernising traditional industries, while simultaneously fostering emerging sectors as the main drivers of high-quality growth. Specifically, the recommendations call for upgrading core traditional sectors such as mining, metallurgy, chemical, light industry, textile, machinery, shipbuilding, and construction to strengthen their global competitiveness and standing. This requires accelerating technological transformation, promoting the digital shift, and developing intelligent, green, and service-oriented manufacturing.

The recommendations also advocate accelerating the development of strategic emerging and future industries, which involves exploring regulatory rules to promote key sectors, including quantum technology, biomanufacturing, hydrogen energy, nuclear fusion energy, brain computer interfaces, embodied intelligence, and sixth-generation mobile communications, as new economic growth drivers. The emphasis on achieving technological self-reliance is a key strategic component, creating opportunities for foreign companies in these areas while potentially intensifying competition from domestic firms in sectors deemed vital to national interest.

The recommendations also place emphasis on expanding opening-up. This means China aims to better align with high-standard international trade and expand market access to foreign companies. Considering trade, China is expected to continue pursuing a trade-diversification policy amid increased volatility, US tariffs, and strained relations with the European Union. The trade outlook for 2026 is defined by a strategic duality: actively diversifying markets in response to volatile US policy while pursuing higher-value exports. Beijing aims to reduce reliance on the US, whose tariffs are regarded as a major source of global economic uncertainty, by pivoting trade toward other partners. The temporary US–China trade truce agreed on 30 October 2025 is scheduled to expire on 10 November 2026, when the potential re-imposition of an additional 24% reciprocal tariff rate and the termination of key Section 301 exclusions will be reviewed. Against this backdrop, China is likely to strengthen partnerships with key developing countries and deepen ties with the Global South.

Malaysia: battery passports and social media ban

Malaysia recently launched an electric vehicle battery passport standard, the first in ASEAN. The Malaysian Standards Department, under the Ministry of Investment, Trade and Industry, published the Malaysian Standard (MS) 2818, establishing a battery passport system for EVs. The initiative seeks to ensure the effectiveness of a battery footprint, increase transparency of battery information, and support the sustainability of the battery life cycle from production to disposal.

Additionally, Communications Minister Fahmi Fadzil announced that the government is reviewing mechanisms to impose age restrictions for social media use, similar to Australia, citing a need to protect youths from online harms such as cyberbullying, financial scams, and child sexual abuse. Greater scrutiny has been put on a rise in harmful content, including gambling and posts on race, religion, or royalty. The announcement followed regulations in January requiring social media companies with more than 8 million users to obtain a license.

Conclusion

Across the board, governments are grappling with a set of structural challenges, digital transformation, energy transition, security resilience, and regulatory simplification, yet are approaching them through different policy pathways that reflect domestic social and economic pressures. Heightened geopolitical competition in strategic sectors will shape trends across regions. 

Among some key global trends emerging next year is AI governance becoming more complex and fragmented. The EU’s prescriptive, risk-based AI Act contrasts with the UK’s sector-focused, innovation-friendly approach. In Asia, countries such as Japan, South Korea, Singapore, India, and China are creating hybrid frameworks that balance industrial competitiveness, safety, and national security. Second, data protection, sovereignty, and localisation rules are tightening. Key jurisdictions, including China, India, Brazil, and the EU, are strengthening data-transfer restrictions, expanding localisation requirements, and increasing accountability for cloud providers, digital platforms, and operators in critical sectors. Online safety regulations, particularly for minors, are also accelerating globally. Governments across Europe, Latin America, and the Asia-Pacific, such as Finland, France, Brazil, Australia, and Singapore, are enforcing stricter age verification, content moderation, and platform-liability standards.

North America and Latin America policymakers are balancing domestic priorities such as water scarcity, electoral shifts, and sectoral reforms against broader needs to modernise energy systems and manage geopolitical uncertainty. Meanwhile, in the Middle East and Africa, ambitious clean-energy projects, and digital-infrastructure expansion are reshaping national strategies and priorities. Public-health interventions on food restrictions are also emerging across multiple regions.

Primary Contributors to the Report

• Michaela Karamperi, PolicyNote Global Policy Advisor
• Rahul Kamath, PolicyNote Principal Research Analyst – Global Policy