Huang Wentao, CITIC Securities: Invest in China's Certainty—Tech Innovation Remains a Core Direction

Preface

Context and purpose: On the occasion of National Day 2026, Dr. Huang Wentao, Head of Research at CITIC Securities, offers a concise assessment of China’s economic and capital-market trajectory. This message reviews recent resilience, structural reform, and the evolving relationship between capital markets and the real economy. It aims to provide investors and stakeholders with a clear framework for choosing investments during a period characterized by global uncertainty and domestic transformation. The note highlights why focusing on long-term, high-quality Chinese assets—particularly those tied to technological innovation and domestic demand—can capture the enduring value in China’s modernization process.

Lazy bag

Key takeaways: Invest in China’s long-term quality growth—driven by technological innovation, expanding domestic demand, and structural upgrades. Despite global uncertainty, China’s macro fundamentals and ongoing capital-market reforms provide a stable backdrop. Investors should balance awareness of external risks with confidence in China’s productive-strength improvements and policy continuity.

Main Body

As China celebrates National Day and reflects on its development, it is useful to place recent economic performance and capital-market evolution in a broader strategic context. The year 2026 marks the opening year of the 15th Five-Year Plan cycle, and it comes at a time when global dynamics are in flux—monetary tightening in some economies, geopolitical tensions, and commodity-price shocks complicate the investment landscape. Against that backdrop, China’s economy has shown notable resilience, maintaining a generally stable trajectory while shifting toward higher-quality and more sustainable modes of growth.

At the macro level, the combination of policy consistency, structural reform, and industrial upgrading supports the view that China’s long-term fundamentals remain intact. Domestic demand expansion, along with targeted fiscal and industrial policies, has helped the economy absorb external shocks and continue on a path of improvement. For investors, this implies that while short-term volatility may arise from global factors, the medium- to long-term investment case for China rests on durable drivers such as productivity gains, consumption upgrading, and the steady march of technological progress.

Capital markets have been undergoing deeper structural changes that make them a more effective conduit between savers and productive enterprises. Continued capital-market reforms, a push to accelerate comprehensive investment–financing reforms, and measures that attract medium- and long-term capital have strengthened market resilience. Regulatory intent to build a capital market that is safe, transparent, open, and adaptive is an important signal: it increases the institutional durability of market reforms and enhances investor confidence.

In this environment, the investment philosophy recommended is to "invest in the certainty of China." That phrase captures two complementary realities. First is the sober recognition of global uncertainty—monetary-cycle shifts, high sovereign debt in some advanced economies, energy-price volatility, and geopolitical tensions create headwinds and episodic market disruptions. Second is the conviction that China’s internal drivers—industrial upgrading, policy determination, and the gradual revaluation of RMB-denominated assets—offer a navigable path through that uncertainty. Viewing these forces together helps investors avoid two errors: being overly pessimistic in response to short-term noise, or naively optimistic based on a single narrative.

From a sectoral perspective, three areas deserve particular attention:

1) Technology and innovation: Technological advancement remains a central, long-term investment theme. With intensifying global competition in technology, new cycles of breakthroughs—centered on artificial intelligence, quantum technologies, advanced manufacturing, and expanded computing power—are entering feedback loops of research, infrastructure investment, and application growth. These industries are moving from a nurturing phase into a period where scaling and commercialization accelerate, making them key potential drivers of future productivity and returns. Policy support and industrial focus further reinforce the attractiveness of innovation-led equity exposure.

2) Domestic demand and market deepening: Building a robust domestic market continues to be a strategic priority. Given rising trade tensions and heightened geopolitical risk, improving the autonomy and resilience of the domestic economy is essential. Policies designed to expand consumption, upgrade services, and strengthen supply chains all contribute to a more reliable growth base. For investors, companies that capture consumption upgrades, service-sector expansion, and domestic supply-chain localization offer durable earnings growth potential.

3) Resource and energy repricing: The global transformation in resource and energy dynamics puts a premium on security and transition. Supply-side constraints for certain commodities and structural demand shifts—driven by electrification, renewables, and new industrial needs—can lead to sustained repricing of strategic resources. Allocations that reflect these structural shifts can provide portfolio ballast and diversification benefits during market turbulence.

For institutional research organizations like CITIC Securities Research Institute, the priorities are clear: deepen the quality of research, expand international perspectives, and better translate research insights into actionable investment and advisory services. Strengthening the integration of research with investment banking, asset management, and advisory functions helps produce consistent, high-impact outcomes. Investing in data-enabled research tools, analyst skills, and deeper industry coverage will allow more robust scenario analysis, milestone tracking, and valuation frameworks that support long-term investment decisions.

Talent development and internationalization are also critical. Building a research team that combines domestic expertise with global viewpoints improves the ability to interpret macro transitions and industry transformations. Further, expanding coverage of emerging technologies, strategic industries, and cross-border flows helps create a holistic investment map for clients.

Ultimately, the message for investors is to blend vigilance about external uncertainties with confidence in China’s evolving strengths. By focusing on technology-led productivity gains, consumption and market-deepening, and resource repricing driven by strategic transitions, investors can position portfolios to capture long-term value. Research institutions play a central role in translating these macro and structural narratives into sector-level and company-specific investment theses, risk assessments, and engagement strategies.

As the country enters a new phase of the five-year planning cycle, continued reform, policy clarity, and industrial upgrading are likely to reinforce China’s investment case. Those who look beyond short-term market noise to the underlying trajectory of China’s modernization—anchored in innovation, market resilience, and strategic resource management—will be best positioned to benefit from the long-term appreciation of high-quality Chinese assets.

On the occasion of National Day, this assessment reaffirms confidence in China’s path and expresses best wishes for national prosperity and social well-being.

Key Insights Table