Fidelity International expects a return rate of 12% for the Chinese stock market this year and next, with exports continuing to drive economic growth

Fidelity International's Asia Economic Analyst Liu Peiqian stated that looking ahead to 2026, exports are expected to continue driving China's economy, while the industrial and service sectors will become new growth engines, as the mainland government continues to promote manufacturing upgrades and domestic demand. In terms of monetary policy, she expects it to remain largely stable; the central bank's easing will not be significant, possibly resulting in 1 to 2 interest rate cuts. The inflation level in the mainland is expected to remain around 1%.

Liu Peiqian mentioned that she anticipates the Federal Reserve will have room for 2 to 3 interest rate cuts this year, and although the People's Bank of China will not follow suit closely, it still provides greater flexibility. Regarding the "14th Five-Year Plan," she believes China will focus on internal circulation, a complete industrial chain, while supporting household spending and developing the service sector to create more job opportunities.

Regarding the Chinese stock market, Fidelity International's Asia-Pacific Investment Director Stuart Rumble believes that the return rate of the Chinese stock market will reach 12% in the next two years, with the market no longer driven by valuation expansion but rather by corporate profit growth. He believes that the current valuation of the Chinese stock market remains attractive. Additionally, he pointed out that the A-share and H-share markets are very different, thus providing different layout opportunities, such as the industrial and healthcare sectors, which will have good development.

Moreover, he is optimistic about both non-core and core consumer sectors, believing that current valuations are low and a slight rebound will yield good returns, such as the dairy industry which has cyclically bottomed out. At the same time, based on the current low per capita spending on sportswear in the mainland, coupled with the increase in domestic tourism demand, he is also optimistic about the sportswear and tourism industries. However, he cautioned about industries that were previously overheated, such as IP retail, where profits have increased but stock prices have also risen significantly.

In terms of real estate, Liu Peiqian believes the mainland government has a strong willingness to maintain stability and will allocate funds to more effective areas, expecting local governments to introduce more policies. Stuart Rumble added that the industry is expected to differentiate, with the balance sheets of first-tier developers possibly improving, also presenting layout opportunities