Institutions Discuss Chinese Assets: China's Core Asset Rally Expected to Emerge During International Order Restructuring Period

On the afternoon of March 24, major A-share indices surged significantly. By the close, the Sci-Tech Innovation Board Composite Index rose 3.24%, and the Sci-Tech 50 Index increased 2.33%. Zhang Yidong, a member of the Executive Committee and Chief Economist at Haitong International, pointed out in a report that during the reconfiguration of the international order, China’s solid assets are expected to lead the market. Currently, Chinese stocks offer high cost-effectiveness, with valuations at historically low levels globally, significant cross-market discount effects, and considerable room to catch up with mainstream overseas markets in terms of valuation.

In Zhang Yidong’s view, China has become the most stable growth engine in the world, and the Chinese stock market has a solid foundation for long-term growth. “The three main supports for long-term positive prospects of China’s stock market are: China’s economy stabilizing, with marginal improvements in real estate and domestic demand; technological strength increasing, manufacturing remaining the top globally, and AI and scientific research capabilities entering the world’s top tier; and following a path of financial development with Chinese characteristics, continuously stabilizing and activating the capital market,” he said.

A recent report from Changjiang Strategy pointed out that amid the intense global market fluctuations triggered by the US-Iran conflict, Chinese assets demonstrate risk-hedging value and attractive allocation features thanks to their deep domestic circulation, resilient global supply chains, and solid policy support at the bottom, making them a core destination for global capital seeking “safety margins.”

“The A-share market is more resilient compared to external markets, mainly due to higher energy self-sufficiency, diversified energy imports, and an economy driven by domestic demand. China is relatively less affected by external energy price shocks,” the report stated.

The institution emphasized that in turbulent times, Chinese assets are worth optimistic about. The report noted that external panic sentiment has led to short-term foreign capital outflows, but passive ETFs have continued to see net inflows, indicating that “smart money” is taking the opportunity to accumulate positions. Meanwhile, with the official announcements of policies during the National Two Sessions and the release of the “14th Five-Year Plan” outline, strategic directions such as new productive forces and expanding domestic demand have become clear. Macroeconomic policies are working in concert to create a solid policy foundation for the A-share market. This not only alleviates market concerns about long-term growth paths but also provides the core driving force for the current valuation recovery.

Li Xuewei, fund manager of HSBC Jintrust Value Pioneer Fund, also stated that the strong “opening red” data of the domestic economy, with manufacturing PMI and social financing indicators exceeding expectations, shows that the endogenous momentum of the economy is recovering. After short-term market sentiment releases, a recovery window may emerge.

Looking into the medium and long term, Li Xuewei believes that domestic equity assets have ample space and opportunities. On one hand, policies on both supply and demand sides are supporting the real economy through coordinated fiscal and monetary measures, with corporate profits and ROE expected to stabilize and improve gradually. Meanwhile, China’s technology industry continues to make breakthroughs in AI, semiconductors, and new energy sectors. Coupled with the long-term environment of loose global liquidity, A-shares are expected to continue strengthening driven by profit improvement and liquidity support. On the other hand, China’s economy is resilient, with substantial excess savings among residents. As reforms in the capital market deepen (such as improved dividend and buyback systems and the entry of medium- and long-term funds), a positive feedback loop of “capital entering the market—long-term upward trend in stocks” is likely to form, further attracting foreign investment and establishing a long-term upward pattern.