Core Insights - The consensus among chief economists is that the core driving force of China's economy in 2026 will shift towards domestic demand, particularly in the service sector, leading to a more balanced economic development compared to 2025 [1][3] - The A-share market is expected to undergo a value reassessment, with the potential for improved corporate earnings coinciding with a rebound in the Producer Price Index (PPI), which could drive a solid upward trend in A-shares [2][3] Economic Outlook - The PPI in October 2023 showed its first month-on-month increase of the year, signaling a positive trend. If the PPI continues to narrow its decline or even turn positive year-on-year in 2024, it could lead to a mild re-inflation in the economy, benefiting corporate profits [1][2] - Chief economists agree that the A-share market's value reassessment logic will remain intact, as the capital market's role in wealth allocation and technological innovation is becoming increasingly significant [2] Market Dynamics - Concerns regarding the AI bubble in the U.S. stock market were discussed, with economists acknowledging its existence but suggesting that the timing and impact of a potential burst are manageable. The upcoming U.S. midterm elections are highlighted as a critical period to watch [2] - Despite potential adjustments in U.S. tech stocks, the impact on China's tech narrative is expected to be limited due to China's vast AI application scenarios, which allow for the practical implementation of technological innovations [2] Unknown Factors - Economists pointed out several uncertainties for 2026, including changes in international relations and geopolitical dynamics, fluctuations in overseas capital markets, and the potential for unexpected political events in the U.S. However, there is a general agreement on a positive trend for the economy and market in 2026 [3]

Group 1 - The core viewpoint is that by 2025, the term "China asset revaluation" will become familiar as the technology industry transitions from catching up to leading, with A-share companies shifting from valuation recovery to profit-driven growth [1] - Economists agree that the core driver of China's economy in 2026 will shift towards domestic demand, particularly in the service sector, leading to a more balanced economic development [3] - There is a consensus that the logic of A-share value revaluation will remain intact, supported by improvements in corporate profits alongside a potential recovery in the Producer Price Index (PPI) [3] Group 2 - Concerns regarding the AI bubble in the US indicate that while a bubble exists, its timing and impact are manageable, with key attention needed around the US midterm elections [4] - The impact of adjustments in US tech giants on A-share technology narratives is expected to be limited due to China's vast AI application scenarios that integrate technology into industry [4] - Economists highlight the importance of monitoring uncertainties in 2026, including changes in international relations, fluctuations in overseas capital markets, and the acceleration of China's modern industrial system [4]

Core Insights - The consensus among chief economists is that the core driver of China's economy in 2026 will shift towards domestic demand, particularly in the service sector, leading to a more balanced economic development compared to the current year [2] - The logic of A-share value re-evaluation is expected to continue, with the capital market becoming a core platform for wealth allocation and technological innovation [2] Economic Outlook - In October, China's Producer Price Index (PPI) saw its first month-on-month increase of the year, indicating a positive signal for economic recovery [2] - If PPI continues to narrow its decline or even turn positive year-on-year, it could lead to a mild re-inflation, benefiting corporate profits [2] A-share Market Trends - The improvement in corporate earnings alongside the potential recovery of PPI is anticipated to resonate with valuation expansion, driving a more robust upward trend in A-shares [2] - The A-share market is increasingly recognized as a key stage for both wealth allocation and corporate technological innovation [2] Global Market Considerations - There is acknowledgment of the existence of a bubble in the U.S. AI sector, but the timing and impact of a potential burst are considered manageable [3] - The upcoming U.S. midterm elections are highlighted as a critical period to watch, particularly if the Federal Reserve struggles to lower interest rates or if AI commercial applications do not perform well [3] Technology and Investment Focus - The integration of technology with industry is seen as a core investment focus, with China's vast AI application scenarios providing a more grounded basis for technological innovation compared to U.S. tech giants [3] - The commercial viability of technology in the industrial sector is a key area for future observation [3] Uncertainties Ahead - Economists noted several uncertainties for 2026, including changes in international relations and geopolitics, cross-regional impacts of overseas market fluctuations, and potential domestic political "black swan" events [3]

Group 1: Foreign Trade Resilience - Guangdong maintains its position as China's "foreign trade first province," with a 4.9% year-on-year growth in foreign trade in the first four months of 2025, outpacing the national growth rate of 2.9% [2] - The province's foreign trade showed a month-on-month recovery, with January experiencing a 3.7% decline, followed by growth of 3.1% in February and 14% in March, achieving historical highs in import and export volumes [2][3] - Guangdong's "Five External Linkages" strategy has been instrumental in stabilizing and expanding foreign trade, focusing on dual efforts in foreign trade and foreign investment, as well as leveraging external intelligence for industrial upgrades [2][3] Group 2: Cross-Border E-commerce Development - Guangdong's cross-border e-commerce is projected to reach a total import and export volume of 745.4 billion yuan in 2024, accounting for over one-third of the national total, serving as a key support for enhancing foreign trade quality [3] - The province has organized numerous trade promotion activities, including the "Cross-Border E-commerce Hundred Counties Tour," connecting over a thousand county-level enterprises with e-commerce platforms [3][4] - The Guangzhou cross-border e-commerce policy seminar introduced various support policies for jewelry enterprises, including warehouse rent subsidies and rewards for brand internationalization [5] Group 3: Technological Integration in Industry - Guangdong's high-quality development is driven by the deep integration of technology and industry, exemplified by the establishment of a fully unmanned system application scenario in Nansha [6] - The AI-driven company, Guangzhou Taidong Technology, has successfully applied generative AI in cross-border e-commerce, significantly reducing the time and cost of advertising material production [7] - The province's AI and robotics industry is projected to exceed 220 billion yuan in core industry scale by 2024, maintaining a leading position nationally [8] Group 4: Policy and Institutional Support - Guangdong is enhancing its international trade cooperation mechanisms, particularly with ASEAN, to promote cross-border trade and investment growth [10] - The province is also focusing on deepening economic cooperation within the Guangdong-Hong Kong-Macao Greater Bay Area, facilitating regulatory alignment and business integration [11] - The establishment of the Guangdong AI and Robotics Industry Alliance marks a significant step towards accelerating technological innovation and industry integration [9] Group 5: Future Outlook - Guangdong's development path is characterized by its role as a "ballast stone" for foreign trade and a "dual-engine" for industrial technology, positioning itself for higher global value chain integration [13] - The province aims to leverage initiatives like "Yue Chain ASEAN" and "Yue Enterprises Going Global" to enhance its international economic influence [13]

Core Viewpoint - Guangdong is leveraging its position as China's largest foreign trade province and its technological strength to stabilize the domestic economy amidst global supply chain restructuring, focusing on high-quality development through strategic initiatives and industrial upgrades [1][6]. Group 1: Foreign Trade Resilience - Guangdong's foreign trade grew by 4.9% year-on-year in the first four months of 2025, outperforming the national average by 2.9 percentage points [1]. - The province's import and export growth rebounded monthly, with January seeing a decline of 3.7%, followed by increases of 3.1% and 14% in February and March, respectively [1]. - Guangdong contributed 65.2% of the national growth in foreign trade during the first quarter, achieving record highs in import and export volumes [1]. Group 2: Strategic Initiatives - The "Five External Linkages" strategy has been implemented to enhance foreign trade resilience through dual efforts in foreign trade and investment, as well as collaboration in outsourcing and foreign economic activities [1]. - Guangdong organized 119 trade delegations and engaged over 2,300 enterprises to explore new market opportunities in regions such as the Belt and Road Initiative countries and RCEP member states [2]. - The "Cross-border E-commerce Hundred County Tour" initiative connected over a thousand county-level enterprises with e-commerce platforms, injecting digital momentum into the local economy [2]. Group 3: Quality Improvement in Foreign Trade - The recent IEAE Vietnam International Consumer Electronics and Home Appliances Exhibition attracted 271 Guangdong enterprises, showcasing the province's commitment to quality improvement in foreign trade [3]. - Legal consultation services were provided at the exhibition to support enterprises in navigating international market rules, indicating a shift from merely exporting products to ensuring compliance and support [3]. - Policies introduced at the "Yiqi Xing" cross-border e-commerce policy briefing aimed to assist traditional jewelry enterprises in their transition to cross-border e-commerce [3]. Group 4: Technological Empowerment - Guangdong's high-quality development is driven by the deep integration of technology and industry, with initiatives like the first nationwide all-space, all-factor unmanned system demonstration in Nansha [4]. - AI-driven companies like Guangzhou Taidong Technology are pioneering the application of generative AI in cross-border e-commerce, significantly reducing production costs and time for advertising materials [4]. - The robotics sector in Guangdong is experiencing explosive growth, with companies reporting a 200% increase in order volume in the first quarter of 2025 compared to the previous year [5]. Group 5: Institutional and Industrial Upgrades - Guangdong is enhancing its role in the national economy through institutional openness and industrial upgrades, establishing trade promotion and supply chain cooperation mechanisms with ASEAN [5]. - The province plans to create a "Yue Chain ASEAN" brand to boost international trade and investment, along with establishing trade and investment service centers in several ASEAN countries [5]. - The ongoing initiatives are expected to elevate Guangdong's position in the global value chain, contributing significantly to the province's economic strength [6].