Long-term prospects underlined for A shares

Short-term corrections in the Chinese stock market will not impair the positive outlook for A shares, which is supported by the country's continued technology upgrades and economic recovery, experts said.

Their comments were made on Tuesday, when the A-share market dipped. The benchmark Shanghai Composite Index shed 1.11 percent and the Shenzhen Component Index was down by 1.51 percent. The tech-heavy ChiNext in Shenzhen closed 2.1 percent lower.

The slump in overseas markets has exerted downward pressure on the A-share market, as explained by bourse watchers. The S&P 500 dipped 0.16 percent on Monday while the Nasdaq declined 0.59 percent. This could be largely attributable to the plunge of artificial intelligence infrastructure companies trading on US bourses. AI cloud computing company Core-Weave plunged 8 percent while semiconductor giant Broadcom dropped over 5 percent.

As a result, Asian markets were generally dragged down on Tuesday. Hong Kong's Hang Seng Index dropped 1.56 percent while South Korea's KOSPI was down 2.24 percent and Japan's Nikkei 225 contracted 1.56 percent. Market expectations of Japan's central bank to raise interest rates and sell its exchange-traded fund (ETF) holdings have also weighed on Asian stock markets, according to industry mavens.

Investors should not be distracted or discouraged by the short-term fluctuations, as opportunities are lying in the long-term slow bull run taking shape in the A-share market, which is driven by China's economic transformation, said Yang Delong, chief economist of First Seafront Fund.

According to a recent meeting of the China Securities Regulatory Commission, efforts should be made to enhance the market's inherent stability while improving its inclusiveness and attractiveness. Apart from better interpreting policies and guiding market expectations, efforts should also be made to promptly address market concerns and help institutions and listed companies better manage their reputation, according to the regulator's meeting.

Semiconductors, computing, algorithms, humanoid robots and new energy vehicles have shown notable growth this year, showing that high-end manufacturing and tech innovation have become important engines of economic growth, as well as capital market performance, said Yang.

The recommendations for formulating the 15th Five-Year Plan (2026-30) released in October have stressed that emerging industries and future-oriented sectors will mark a major development trajectory in China in the coming years. These areas are likely to nurture new growth engines of profit, pointing to investment opportunities, added Yang.

The soaring price of Chinese graphics processing unit maker Moore Threads may serve as a good example. Debuting on the STAR Market in Shanghai on Dec 5 with an issue price of 114.28 yuan ($16.23) per share, the company quickly saw its price peak at 941.08 yuan on Dec 11.

With the listing of another Chinese GPU company MetaX scheduled for Wednesday, China's GPU sector will seek industrialization more rapidly, said experts from Kaiyuan Securities. This is conducive to the security and self-control of China's high-end chips and AI computing power, they said.

Robert Li, multi-asset strategist at investment firm Barings' macroeconomic and thematic research team, said that the rising appeal of China assets is the result of the institutional breakthroughs made within various industries in China. The surge of DeepSeek has demonstrated China's competitiveness in cost control and inclusiveness. Barings has thus increased its exposure to Chinese tech stocks within its global portfolios.

As long as China sticks to long-term investment and advances reforms steadily, the investment value of Chinese assets will be especially noticeable, Li said.

Ming Ming, chief economist of CITIC Securities, said that the trend of a weaker US dollar and a stronger renminbi will continue in 2026. As China's economic growth stabilizes, foreign investors are showing increasing inclination toward Chinese assets.

Regarding concerns over "overheating" in emerging tech sectors such as AI, experts from Industrial Securities said it is still too early to draw such conclusions. Strong fundamentals have supported the performance of these sectors. But investors should keep an eye on whether these technologies can successfully seek commercialization, they said.

shijing@chinadaily.com.cn