China’s technological progress has accelerated dramatically, positioning it as a global leader in several sectors. Advances in artificial intelligence, robotics, autonomous driving, and renewable energy highlight the country’s innovation-driven growth.

Policy reform has been pivotal in stabilising China’s financial markets and fostering growth. Regulatory changes targeting structural issues – including stricter IPO oversight and enhanced delisting mechanisms – are mitigating systemic risks and creating a more resilient environment.

China’s equity markets are benefiting from robust domestic liquidity and rising institutional participation. Retail investors are reallocating funds into equities, while corporates are increasing share buybacks and dividends, enhancing shareholder returns. Combined with reasonable valuations and a low correlation to global markets, these trends make China an attractive investment destination.

Self sufficiency

Geopolitics drives localisation across a range of industries – software, semiconductor, healthcare, energy supply.  Also supports development of advanced manufacturing in sectors such as autos and machinery.

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Artificial Intelligence

DeepSeek a catalyst for surge in AI applications eg humanoid robots, autonomous driving, other software. Expanding ecosystem of technology hardware in support of computing power and software.

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New consumption

Trading down to lower price items, more focus on consumer experience. Benefits domestic brands in areas such as pet economy, “pop toys”, snacks and beverages, jewellery and cosmetics.

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Healthcare / biotech

Significant step up in new drugs under development, growing demand from global pharmaceutical companies to license domestically-produced drugs for sale outside China.

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Shareholder returns / dividends

Increased focus on corporate governance and improving shareholder returns. Central bank provision of credit for share buybacks and dividends. Higher dividend yields favoured in lower interest rate environment.
Bonds can be accessed in onshore and offshore markets, and denominated in US or Chinese currencies, to help achieve a range of diversification objectives.

China’s markets have historically exhibited low correlations to other major markets – meaning they frequently move in different directions. This means investing in China could potentially bring diversification benefits.

Equities are available in a range of exchanges – from Shenzhen and Hong Kong listings to the Nasdaq-like STAR market

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China Briefing provides timely insights on the trends defining one of the world’s most dynamic equity markets. Join us on this journey with the views of our China equity team and their on-the-ground assessments of this continuously evolving story.

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  • Structural growth potential:
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