At the Shenzhen Stock Exchange 2026 Global Investor Conference, Michael Heldmann, Chief Investment Officer for Equities at Allianz Investment, delivered a keynote speech outlining five key factors underpinning his optimistic outlook on Chinese equities.
First is policy. Over the past two years, supportive government policies have helped rebuild confidence.
Second is the "DeepSeek moment." Heldmann specifically highlighted this landmark event in early 2025, noting that China is no longer a follower in the highly competitive field of AI. "There is no ceiling for China's technological innovation," he stated.
Third is resilience. While recent Middle East tensions impacted global markets, Chinese equities demonstrated considerable stability. The CDS spread has continued to decline over the past two years and did not rise even during the recent geopolitical volatility.
Fourth is liquidity. As an institution managing substantial assets, Allianz's allocation to China represents approximately 10% of its total portfolio. "Market liquidity is improving, and market capitalization is growing, which are very positive developments," Heldmann said.
Fifth, and a point he emphasized, is the severe undervaluation of China's weighting.
He presented comparative data: China's GDP accounts for 17% of the global total, A-share trading volume represents 29% of the global total, and its market cap constitutes 10% of the global total. However, the weighting of Chinese equities in the MSCI global index is only 3%, compared to the United States' weighting of 64.7%.
"China deserves a higher weighting in the index," Heldmann asserted. He believes a correction in this weighting would attract more foreign capital, particularly passive investment funds, into the Chinese market.
He also noted a structural shift: a decade ago, the largest weightings in the MSCI China A Index were in financials and real estate; now, the largest weighting is in IT. "The current structure looks more like that of a developed market, which is a very healthy trend," he observed.
On valuation, he compared Alibaba and Amazon: while Amazon's revenue is five times that of Alibaba, the two companies have similar market shares in e-commerce, and their cloud businesses and pre-tax profits are comparable. "Chinese concept stocks possess unique appeal," he concluded.
Heldmann summarized his focused thematic investment directions: self-sufficiency (software, semiconductors, healthcare, energy supply), advanced manufacturing (humanoid robots, power batteries, new energy vehicles, autonomous driving), and AI-driven energy and biopharmaceuticals.
"China represents a long-term investment opportunity, worthy of long-term holding," he said. Allianz has consistently increased its holdings in China over the past 15 years. "These signals are very clear and firm."