Chinese equities are entering a new growth cycle, according to Goldman Sachs China equity strategist Fu Si. Three key drivers—artificial intelligence (AI), the "anti-involution" trend, and Chinese companies expanding overseas—are expected to fuel earnings growth for Chinese firms in the coming years. Goldman Sachs projects that A-share and H-share indices could deliver around 30% in potential returns by the end of 2027. This forecast is based on a 12% annualized earnings growth rate and a 5% to 10% expansion in price-to-earnings (PE) multiples.

Chinese tech stocks have rallied significantly this year, particularly AI-related sectors. Fu Si noted that the recent gains stem from improved market expectations and valuation expansion driven by sentiment. While tech sector valuations remain attractive overall, she cautioned that investor focus may shift from sentiment-driven expectations to corporate fundamentals next year. Further valuation upside will hinge on actual earnings delivery.