At the Shenwan Hongyuan Group Co., Ltd. 2026 Capital Market Investment Summit held in Shanghai on November 18, Huang Weiping, Chief Bond Analyst at Shenwan Hongyuan Research, presented the firm's 2026 bond strategy outlook. Key insights include:

1. **Shifting Core Drivers in Bond Markets**: - Recent years have seen bond market dynamics transition from credit contraction to asset allocation rebalancing. - In 2025, market performance will hinge on expectation gaps: Q1 (liquidity expectations), Q2 (U.S.-China relations), Q3 (asset reallocation amid deposit shifts and equity risk appetite recovery), and Q4 (central bank bond purchases). Traditional credit cycle frameworks may struggle to explain bond trends as low-rate environments amplify asset allocation impacts.

2. **New Phase of Market Dynamics**: - Focus shifts to "inflation + capital flows" amid economic restructuring, with real estate’s influence reverting to 2015-like subdued levels. - Debt resolution addresses structural transition challenges, with the "6+4+2" plan projected to alleviate 46%-70% of debt burdens by 2026, easing asset scarcity pressures. - Household wealth redistribution gains market attention, while lower interest rates typically heighten volatility.

3. **Macro Backdrop**: - 2025 growth pillars: export demand, manufacturing-driven production, and fiscal-led credit expansion. - 2026 priorities: modern industrial systems, technological self-reliance, and domestic market development. - Baseline 2026 GDP growth target remains ~5%, supported by base effects, inflation recovery, and expanded fiscal deficits under a "loose monetary + fiscal policy + stable credit" framework.

4. **2026 Bond Market Outlook**: - Inflation emerges as the dominant variable, particularly in Q2-Q3, potentially triggering prolonged headwinds. - Price rebound trajectory: low-base rebound → policy-driven acceleration (anti-internalization measures + monetary coordination) → PPI-to-CPI passthrough.