The Middle East turmoil hits Asia hardest due to its highest oil and gas imports as a percentage of the GDP, Chetan Ahya, chief Asia economist at Morgan Stanley, told Yicai in an interview during the Morgan Stanley China Summit 2026. Despite that, inflation stays manageable and local central banks do not need to hike rates immediately, he added. Once tensions ease, AI infrastructure, energy transition, and defense spending will drive strong industrial rebound, benefiting China's supply chains, he noted.