1. Report Industry Investment Rating - No information provided in the report 2. Core Viewpoints of the Report - In 2026, industry allocation should focus on two main lines: technology and security, reform and growth. The industry allocation perspective should be more "self - centered", aiming to consolidate national security through technological self - reliance and enhance endogenous growth resilience through comprehensive deep - seated reforms [49]. - In the technology and security aspect, it is optimistic about the domestic computing power and chip manufacturing industry chain, and pays attention to AI power construction, AI glasses new products, humanoid robots and ToB - end AI applications. It also focuses on relevant fields in the 14th Five - Year Plan and resource and energy security [49]. - In the reform and growth aspect, "anti - involution" related varieties will shift from trading policy expectations to pricing the inflection point of prosperity. It is necessary to pay attention to the fundamental bottoming of the electrolyte, positive and negative electrodes, separators, polysilicon and other links in the photovoltaic industry chain, as well as the improvement of prosperity brought about by capacity reduction in the chemical, steel and thermal coal fields. In terms of domestic demand, more attention should be paid to service and non - durable consumer goods [49]. 3. Summary by Relevant Catalogs 3.1 This Week's Market Review 3.1.1 Market Performance - The average daily trading volume of the entire A - share market this week was close to 2.5 trillion, with a contraction of over 140 billion compared to last week [8]. 3.1.2 Market Style Performance - This week, the ChiNext Index led the rise, and the dividend style had an overall outperformance. The ChiNext Index rose 2.51%, and the CSI Dividend Index rose 1.60%. Other indices such as the Shanghai Composite Index fell 0.70%, and the SSE 50 Index fell 1.20% [12]. - In terms of market capitalization style, the relative advantage of small - cap stocks declined to 0 on a 30 - trading - day rolling basis. In terms of growth/value style, the relative advantage of growth stocks over value stocks fluctuated in the negative range on a 30 - trading - day rolling basis [15][18]. - This week, the performance of QFII and Northbound Stock Connect positions was weaker than the broader market [21]. 3.1.3 Market Sentiment - This week, the margin trading balance increased to around 2.66 trillion. The number of rising and falling stocks and the number of limit - up and limit - down stocks showed certain fluctuations [26]. 3.1.4 This Week's Sector Performance - Relevant charts show the rise and fall of SW primary and secondary industry sectors, but specific data is not described in text [32][34]. 3.2 Industry Trend Trading Review and Outlook 3.2.1 This Week's Strong Directions - There is a chart showing the rise and fall of this week's strong themes, but specific data is not described in text [41]. 3.2.2 Next Week's Industry Event Outlook - From March 16 - 19, the NVIDIA GTC Conference will be held; from March 17 - 19, the 2026 Optical Fiber Communication Conference and Exhibition will be held; on March 18, the 2026 Amazon Cloud Technology Going - Global Conference will be held; from March 19 - 20, the Huawei China Partners Conference will be held; from March 17 - 18, the 2026 Second Commercial Aerospace Industry Development Conference and 2026 Commercial Aerospace Exhibition will be held; on March 19, VOYAH will be listed on the Hong Kong Stock Exchange by way of introduction; on March 16, the press conference on China's national economic operation will be held to announce important economic data for January - February; on March 19, the Federal Reserve's interest rate decision will be announced [48]. 3.2.3 2026 Industry Opportunity Outlook - Industry allocation focuses on two main lines: technology and security, reform and growth. In the technology and security aspect, it is optimistic about the domestic computing power and chip manufacturing industry chain, relevant fields in the 14th Five - Year Plan, and resource and energy security. In the reform and growth aspect, it pays attention to "anti - involution" related varieties and domestic demand in service and non - durable consumer goods [49].

Core Viewpoint - The global supply chain is undergoing profound restructuring, presenting both challenges and strategic opportunities for Chinese companies in the smart terminal sector [2][10]. Event Overview - The "2026 Pudong New Area Smart Terminal Supply Chain Industry Development Summit and Entrepreneur Closed-Door Seminar" will be held on March 12, 2026, in Shanghai, coinciding with AWE2026 [2][7]. - The event aims to gather over a hundred decision-makers from various sectors, including smart terminals, semiconductors, new materials, and precision manufacturing, to engage in high-level discussions [2][4]. Key Discussion Topics - The seminar will focus on critical strategic issues such as transforming policy dividends into corporate growth momentum, navigating technological iterations and market competition, and maintaining stability amid global supply chain changes [2][10]. - The event will feature a closed-door format to facilitate in-depth and private dialogues among industry leaders [3][4]. Speaker Insights - Chen Liya, founder and CEO of CINNO Research, will address how to find breakthroughs under the dual pressures of technological blockade and market competition [6][10]. - The discussion will highlight three main breakthrough areas: 1. The urgent challenge of the storage chip "super cycle" due to AI computing demand and the monopolization of capacity by three major international players [10]. 2. The integration of AI with terminals, where AI smartphones and glasses are emerging as new core devices [10]. 3. The reconstruction of globalization pathways, shifting from "product export" to "capability export" through localized operations and technology standard output [10][16]. Event Logistics - The event will take place at the E1 Conference Center in Pudong, Shanghai, with a limited number of seats available exclusively for corporate decision-makers [5][18]. - The agenda includes a series of presentations and discussions aimed at clarifying directions and consolidating power among industry leaders [4][20].

Group 1 - The "Wassenaar Arrangement" has been viewed as a symbol of Western isolation towards China, which has inadvertently driven China to achieve self-sufficiency in defense technology [1][2] - The arrangement is an extension of the Cold War-era "Paris Coordination Committee," aimed at systematically blocking high-tech access to adversarial nations, reflecting a selective membership structure that primarily benefits a small group of Western countries [1][2] - The arrangement's restrictions are not solely aimed at China but affect any country outside the U.S. ally circle, indicating a broader issue of global technology flow being constrained by a few nations [2] Group 2 - Despite the restrictions imposed by the "Wassenaar Arrangement," China has made significant advancements in various fields, demonstrating a spirit of independence and self-reliance in building a comprehensive defense technology system [2] - Other developing countries, such as Pakistan and Brazil, have also improved their industrial and defense capabilities through regional cooperation and local research and development, showcasing that technology embargoes do not fundamentally hinder progress [2] - The current global security environment is increasingly complex, necessitating a more transparent and inclusive export control mechanism that involves more countries to maintain legitimacy [3]

Core Insights - The global economic landscape is undergoing a systematic restructuring due to changes in the global power dynamics, stages of productivity development, and deepening contradictions within capitalism [1][3]. Group 1: Global Economic Trends - The capitalist contradictions have become increasingly evident during the process of economic globalization, leading to a significant imbalance in global industrial division, with developed countries experiencing industrial hollowing [3]. - The share of manufacturing employment in the U.S. has decreased from 12.7% in 2000 to a projected 8% in 2025, marking a 20-year low [3]. Group 2: Technological Advancements and Industry Shifts - The emergence of new technologies has rendered traditional industrial development models unsustainable, creating opportunities for emerging industries and reshuffling national industrial advantages [4]. - The blurring of boundaries between manufacturing and services due to the proliferation of digital technologies has led to new business models such as "product as a service" and personalized customization, significantly increasing industrial value [4]. Group 3: Geopolitical and Technological Competition - Technological leadership is now a cornerstone of national security and geopolitical power, with new technologies like artificial intelligence breaking traditional paths of innovation [5]. - The imposition of "associated blockades" has forced developing countries to pivot towards foundational research and original innovation, as they can no longer rely on traditional methods of technology acquisition [5]. Group 4: State Intervention and Regulatory Dynamics - As global industrial competition intensifies, reliance solely on market forces is insufficient for ensuring industrial security, necessitating state intervention and rule-making as essential strategies [6]. - The increasing prominence of externality issues, such as climate change and supply chain resilience, has led to a shift from market-driven to "state strategy + market mechanism" dual-driven industrial organization [6].

Group 1 - The trade friction between the US and China began in 2018, initiated by the Trump administration's tariffs on steel and aluminum, which were set at 25% and 10% respectively [1] - China responded quickly by imposing tariffs on US goods worth $3 billion, including fruits and pork, aiming to stabilize its supply chain [1] - By 2019, the US expanded tariffs to $200 billion worth of goods, leading to a Chinese countermeasure of $60 billion, which prompted US farmers to face declining incomes and empty retail shelves [3] Group 2 - In 2023, the US further tightened controls by banning exports of chip equipment below 7 nanometers to China, while Chinese companies improved production yields through domestic technology [4] - The US attempted to unite allies against China, but China had reduced its reliance on the US market, leading to a series of escalating tariffs from both sides [4][5] - The cumulative tariff rate reached 145%, with China responding by restricting rare earth exports, impacting the US military industry [5] Group 3 - The promotion of RMB settlement has seen 23 countries incorporate it into their reserve currency systems, challenging the dominance of the US dollar [7] - The EU's lack of full support for US policies, along with significant declines in the German automotive sector, indicates a fracture among US allies [7] - China has effectively utilized market data to respond to US measures, achieving technological self-sufficiency and diversifying trade to bypass the dollar system [8] Group 4 - A temporary agreement was reached in May 2025, reducing tariffs significantly, with the US lowering tariffs to 30% and China to 10%, while China committed to purchasing US soybeans [9] - The ongoing negotiations and agreements have led to a shift in US-China relations from confrontation to managing differences and mutual cooperation [10] - The global market is gradually recovering, with the EU adjusting its technology policies in response to the evolving trade dynamics [10]

Core Viewpoint - TSMC is shifting its focus from producing 16nm chips in China to establishing a 3nm production line in Japan, despite ongoing tensions between China and Japan, indicating a strategic pivot in response to geopolitical pressures [1][2][8]. Group 1: Investment and Strategic Decisions - TSMC's chairman, C.C. Wei, has increased the investment budget for the Kumamoto factory from $12.2 billion to $17 billion, reflecting a significant commitment to advanced semiconductor technology in Japan [2][3]. - The Japanese government has promised subsidies exceeding 1 trillion yen (approximately $6.8 billion), with the first tranche of 732 billion yen already allocated, highlighting the importance of this project for Japan's semiconductor revival [4]. Group 2: Technological Implications - The difference between 16nm and 3nm technology represents a significant generational gap, with implications for the types of products that can be developed, such as AI and advanced military applications [5][6]. - TSMC's decision to invest in Japan's 3nm technology comes amid restrictions on advanced semiconductor equipment exports to China, indicating a shift in the global semiconductor landscape [6][8]. Group 3: Geopolitical Context - The relationship between China and Japan is strained due to ongoing sanctions, yet TSMC's actions suggest a calculated risk to secure its position in the global semiconductor supply chain [2][8]. - The move to Japan is seen as a strategic necessity for TSMC, as it navigates pressures from both the U.S. and Japanese governments, which are keen to bolster their domestic semiconductor capabilities [6][7]. Group 4: Future Outlook - TSMC's investment in Japan may signal a long-term shift away from reliance on the Chinese market, potentially accelerating the development of an independent Chinese semiconductor industry [9]. - The ongoing developments in China's semiconductor capabilities, such as SMIC's N+2 process, suggest that the competitive landscape may evolve, challenging TSMC's dominance in the future [8][9].

Core Viewpoint - The U.S. Department of Justice has filed a forfeiture lawsuit to seize military training equipment intercepted while being shipped from South Africa to China, claiming it utilizes U.S. technology. The South African Flight Academy refutes these claims, stating the equipment is solely for educational purposes and does not incorporate any U.S. military technology or controlled materials [1][7]. Group 1: U.S. Department of Justice Claims - The equipment in question is named "Mission Crew Trainer" (MCT) and is designed and manufactured by the South African Flight Academy, along with its accompanying software [1][7]. - The U.S. claims that the MCT uses software and defense technology data sourced from the U.S. and is modeled after Boeing's P-8 Poseidon patrol aircraft, which is used for anti-submarine warfare [1][7]. - The U.S. asserts that the MCT project is intended to train Chinese pilots to locate and track U.S. submarines operating in the Pacific, thereby enhancing the Chinese military's capabilities in submarine tracking and advanced reconnaissance aircraft operation [1][7]. Group 2: South African Flight Academy's Response - The South African Flight Academy denies the U.S. Department of Justice's allegations, stating that the equipment consists of basic mobile classroom units designed for training management of maritime patrol aircraft crews and does not include tactical simulators or advanced systems [2][9]. - The Academy emphasizes that the systems rely entirely on publicly available information and commercially licensed software, intended solely for procedural training purposes [2][9]. - The Academy also notes that the equipment and software underwent review and approval by relevant authorities before shipment, confirming that they do not contain any restricted or sensitive technology, asserting that the transportation was legal and transparent [2][9].

Core Viewpoint - The U.S. Department of Justice has filed a forfeiture lawsuit to seize military training equipment intercepted while being shipped from South Africa to China, claiming it utilizes U.S. technology [1][3]. Group 1: U.S. Department of Justice Claims - The equipment in question is named "Mission Crew Trainer" (MCT), designed and manufactured by the South African Test Pilot School, and includes accompanying software [1][3]. - The U.S. claims that the MCT is a mobile classroom modeled after Boeing's P-8 Poseidon patrol aircraft, used for training Chinese pilots to locate and track U.S. submarines in the Pacific [1][3]. - The U.S. asserts that the MCT project enhances the Chinese military's capabilities in tracking submarines and operating advanced reconnaissance aircraft [1][3]. Group 2: South African Test Pilot School's Response - The South African Test Pilot School denies the allegations, stating that the equipment does not integrate any U.S. technology, data, or other controlled materials, and is solely for educational purposes [2][4]. - The school emphasizes that the equipment consists of basic mobile classroom units designed for management training of maritime patrol aircraft crews, lacking tactical simulators or advanced systems [2][4]. - The equipment and software underwent review and approval by relevant authorities before shipment, confirming the absence of restricted or sensitive technology, and the transportation was conducted transparently without any attempt to conceal the nature or purpose of the equipment [2][4].

Group 1 - The article discusses the geopolitical tensions involving the United States and China, highlighting that the U.S. is unlikely to engage in direct military conflict with China due to its military capabilities and the economic interdependence between the two nations [1][10][12] - The U.S. has attempted to exert economic pressure on China through tariffs and sanctions, but these measures have backfired, leading to significant domestic discontent and inflation in the U.S. [3][10] - The U.S. defense budget for fiscal year 2026 has reached $900 billion, with a core objective of containing China's development, including measures like capital restrictions on investments in key Chinese sectors [12][14] Group 2 - The article notes that the U.S. is constructing a global supply chain blockade against China, prohibiting collaborations in critical technology sectors and aiming to cut off supply chains [14] - The U.S. military is facing challenges in maintaining its naval capabilities, with a significant reduction in shipbuilding capacity compared to China, which has the largest navy in the world [9][14] - Despite U.S. efforts to contain China, the latter is enhancing its technological innovation and defense capabilities, positioning itself to effectively respond to external threats [14]

Core Viewpoint - Globalization is undergoing a reconstruction rather than disappearing due to great power competition and protectionism, and it is impossible to completely block technology and knowledge [1][3][4]. Group 1: Globalization and Technology - The integration of geopolitics and economics has become a core factor influencing corporate strategy [1]. - Historical experiences show that attempts to block technology often backfire, accelerating the diffusion of technology [3]. - The current U.S. efforts to restrict China's development through technology and knowledge blockades may lead to similar outcomes as past experiences [3][4]. Group 2: Competitive Strategies - The real challenge lies not in the ability to block but in maintaining competitiveness in an open environment [4]. - Future technological competition will depend on who can absorb and transform knowledge more quickly in an open context [4]. - Companies should leverage manufacturing advantages and enhance their negotiation power by controlling key links in the supply chain [6]. Group 3: Open Attitude and Resilience - Maintaining an open stance and international engagement is crucial to reduce friction in international cooperation [6]. - Openness is not passive acceptance but an active construction of global cooperation networks [6][8]. - The ability to innovate and grow in an open environment is essential for companies to seize opportunities in the reconstruction of globalization [9].