BOC: Long-term bull run in offing

A slow bull run has largely been established in the Chinese mainland's A shares and is poised to benefit from capital market reforms and economic recovery, potentially evolving into a long-term bull market, according to the Bank of China.

At the same time, Hong Kong stocks are gaining from the internationalization of Chinese assets and easing external liquidity, it added, recommending an "overweight" position in both A shares as well as Hong Kong stocks this year.

"We believe that in 2026, the world will continue to benefit from a liquidity-loose environment. With China's robust economic growth and valuation advantages in the stock market, combined with the ongoing global 'de-dollarization' trend, China's stock market should become the first choice for global capital rebalancing," said a report released by BOC's personal banking department on Wednesday.

This is the first year of the country's 15th Five-Year Plan (2026-30) period, and BOC expects policies to continue supporting the economy structurally, aiming for a strong start to economic growth this year.

With more proactive macroeconomic policy support, domestic demand is expected to stabilize and recover. The bank has projected China's economic growth to range between 4.7 percent and 5 percent this year.

"Looking ahead, the global economy will continue its weak recovery amid multiple overlapping uncertainties. However, under the country's more proactive policies, China's internal economic momentum will continue to solidify, and the long-term allocation value of Chinese assets will become even more prominent," said Cai Zhao, executive vice-president of BOC.

Wen Xiaobo, senior manager of the personal banking department of BOC, believes the profit inflection point for Chinese enterprises has already appeared this year.

"Many foreign institutions project that, excluding financial institutions, Chinese listed companies will see revenue growth of 2.2 percent and profit growth of 5-8 percent. If this holds true, China's stock market should transition from a valuation-driven rally in 2025 to a dual-engine growth model fueled by both valuation and earnings in 2026," said Wen.

Guan Tao, global chief economist at BOC International (China) Co Ltd, highlighted four key opportunities for China's capital market, which holds strong long-term prospects.

The first is comprehensive reform, which aims to unlock potential by addressing institutional barriers that hinder high-quality development. The second opportunity lies in China's economic transformation, driving new avenues for growth. The third is the ongoing improvement in China's capital market system, enhancing investment and financing functions to foster a more favorable environment for long-term investments. Last, the diversification of Chinese assets and the global asset rebalancing process will lead to value reassessment, injecting renewed vitality into the capital market.

"The expectations of a slow bull and long-term bull market are continually strengthening, and with growing expectations of the appreciation of the RMB, global capital is likely to flow into China faster, participating in the process of revaluation of Chinese assets," the report said.

It emphasized that Chinese assets are no longer ordinary emerging market assets, but high-quality assets deeply integrated into the global high-tech industrial chain and an essential part of the global "de-dollarization" trend.

The recommendations for formulating the 15th Five-Year Plan suggest leveraging multiple channels to increase the property income of both urban and rural residents, laying out a blueprint for the high-quality development of the wealth management industry.

Cai said that China is actively advancing its high-level opening-up, with cross-border financial demand becoming increasingly diversified. Wealth management has entered a new era of global allocation and cross-border collaboration.

On Wednesday, BOC launched its personal financial global service solution, built around the global account functionality.

Cai described it as a practical implementation of the national strategy and an innovative approach to addressing clients' cross-border financial challenges. By signing up for the service via the BOC or Bank of China Hong Kong mobile banking app, customers can manage and display their accounts in both the Chinese mainland and Hong Kong in a unified manner.