Sou Hu Cai Jing·2025-11-01 00:55Core Viewpoint - The transformation of China's economy is entering a new stage, with significant changes in the capital market ecosystem driven by industrial breakthroughs and capital reallocation [1][3][10]. Economic Transformation - The transition from old to new economic drivers is becoming more pronounced, with the old economy's clearance benefiting the bond market, while the rise of the new economy is expected to favor the stock market [3]. - The "14th Five-Year Plan" is set to provide guidance for medium to long-term economic growth and policy focus, indicating further breakthroughs in the industrial sector and a balance in supply and demand [3][4]. Market Dynamics - The macroeconomic narrative is shifting towards a more favorable outlook, with reduced tail risks and improved liquidity conditions both domestically and internationally [1][3]. - The Federal Reserve is expected to cut interest rates twice this year, which will enhance global liquidity and increase foreign investors' interest in Chinese assets [3][9]. Investment Strategies - A diversified portfolio including technology stocks, resource stocks, gold, and short-term bonds is recommended to mitigate risks [4]. - The "anti-involution" theme is seen as beneficial for achieving supply-demand balance and improving the business environment, although it may temporarily suppress investment demand [6][10]. Long-term Market Outlook - The long-term outlook for the Chinese capital market is optimistic due to three main reasons: the gradual transition to a new economic phase, the influx of long-term capital, and the introduction of stabilizing funds to reduce irrational market volatility [10]. - The demand for reallocation of funds from maturing deposits and wealth management products is expected to support the market [9].