The irreversible technological revolution, supported by China's vast market enabling multiple trial-and-error cycles, has formed a complete industrial and supply chain, making external fluctuations unlikely to disrupt local innovation progress. This was highlighted by Zhao Wei, Chief Economist at Shenwan Hongyuan Securities, during the securities industry sub-forum at the Southern Finance Forum 2025 Annual Conference.
Held in Guangzhou from December 5 to 6 under the theme "The Power of Consensus—Innovation Surge, Revaluation of Chinese Assets," the forum featured Zhao Wei as a key panelist sharing insights on economic and market prospects for the inaugural year of China's 15th Five-Year Plan.
Zhao first analyzed the economic trajectory for 2026, predicting an "atypical recovery" phase characterized by "stable volume with rising prices." This shift from a deflationary spiral to moderate price recovery is expected to boost corporate earnings and restore micro-level confidence. However, structural disparities will persist across sectors due to varying policy support levels, leading to uneven recovery patterns.
On the widely debated A-share revaluation topic, Zhao proposed a fresh perspective: focus should shift from "value revaluation" to "capital rebalancing." He explained that post-2022 market pessimism had driven the CSI All Share dividend yield 100 basis points above treasury bond rates—a pricing disconnect indicating excessive fundamental pessimism. "If A-shares are viewed as perpetual bonds offering yields 1% higher than 10-year treasuries, yet investors remain reluctant, it reflects extreme mispricing," Zhao noted.
Four key events reversed market expectations: 1) Post-September 2024 policy shifts altering macroeconomic narratives 2) The emergence of DeepSeek redirecting investment focus from macro to micro factors 3) U.S. "reciprocal tariffs" triggering systemic concerns among non-U.S. investors about policy stability 4) July 1 market-wide discussions on "anti-involution" driving fixed-income capital toward equity-linked assets. "The 'fixed-income plus' product scale doubled within months amid this backdrop," Zhao added.
Regarding AI bubble concerns, Zhao maintained optimism, asserting the unstoppable nature of technological revolutions. He emphasized China's unique scenario advantage: "With its massive consumer base allowing iterative innovation cycles, China cultivates comprehensive industrial/supply chains—a condition unmatched elsewhere."
On risk factors, Zhao flagged underdiscussed geopolitical variables that could trigger unexpected global inflation in 2026. "New geopolitical developments may cause inflation overshoots, constituting a potential surprise risk next year," he cautioned.
Concluding with a forward-looking note, Zhao stated: "While new technologies always spark fear of obsolescence, defining this as the 'Fourth Industrial Revolution' means market volatility won't halt its advance. 2026 will present continuous A-share opportunities as capital rebalancing deepens—investors should capture prospects from both atypical recovery and tech revolution."