China's technological innovation capabilities are increasingly attracting the attention of global capital. According to Wind data, since the start of 2026, foreign institutions have conducted research on 189 A-share listed companies, with a clear focus on hard technology sectors such as power equipment, electronics, and machinery. Some foreign institutions believe that China possesses a vast technology sector, and that domestic demand, innovation, and high-tech investment will be key drivers of China's economic growth in 2026.

A Surge in Research Activity Data from Wind shows that as of February 14, 2026, a total of 189 A-share listed companies have been researched by foreign institutions, with a primary concentration on the technology sector. Specifically, the most popular companies for foreign institutional research this year include Huaming Equipment, Insta360, Inovance Technology, and Opt, each attracting research visits from over 50 foreign institutions. Orbvision received research from 48 foreign institutions, while Yihada was researched by 39.

For instance, Huaming Equipment has been one of the most closely watched companies recently, with 59 foreign institutions, including J.P. Morgan Asset Management and BlackRock, appearing on its research roster. The focus of institutional inquiry was the development of the company's domestic and international power grid businesses. Huaming Equipment stated that its products have now entered over a hundred countries and regions globally, and that transformer manufacturers of all sizes worldwide are its customers. Furthermore, Huaming Equipment announced on February 12 that it is planning an overseas issuance of shares (H-shares) and a listing on the Hong Kong Stock Exchange. Insta360 has also been a key focus for foreign institutions, receiving research visits from 58 entities, including Point72 and Temasek, this year. During these sessions, Insta360 mentioned that its current projects under development include a new generation of action cameras, a new generation of all-in-one panoramic cameras, wearable accessory cameras, and handheld portable Vlog cameras. Inovance Technology has also garnered significant foreign attention, with 53 institutions, such as Citadel and UBS, conducting research. Inovance Technology indicated that it aims to continuously increase the proportion of its overseas business and rapidly build an international platform encompassing sales, R&D, and supply chain.

Power Equipment, Electronics, and Machinery Garner High International Interest In terms of sector distribution, power equipment, electronics, and machinery have been the most closely watched industries by foreign investors this year. Within the power equipment sector, companies that attracted clustered research include Huaming Equipment, Inovance Technology, Wolong Electric Drive, Dajin Heavy Industry, Sieyuan Electric, and CSI Solar. In the electronics sector, companies like Insta360, Orbvision, Anji Technology, Smartsens, China Resources Microelectronics, Huaqin Technology, VeriSilicon Microelectronics, and Jiemei Technology were all researched by over 10 foreign institutions collectively. In the machinery sector, stocks receiving higher foreign attention include Opt, Yihada, Hanbell Precision Machinery, Changsheng Bearing, and Jaocheng Ultrasonic.

Looking ahead, some foreign institutions believe that China's large technology sector, combined with domestic demand, innovation, and high-tech investment, will be crucial for driving economic growth in 2026. Indrani De, Global Head of Investment Research at FTSE Russell, recently stated that for 2026, China will leverage domestic demand, innovation, and high-tech investment as key growth drivers, supported by expansionary fiscal policy. She noted that China has a substantial technology sector, which accounted for 27.1% of the FTSE China Index as of December 2025. If 2026 mirrors 2025, where global equity performance is driven by multiple thematic forces, Chinese equities could benefit again due to the more diversified industry composition of the Chinese market.

"Chinese equities may benefit from emerging market fund inflows in the new year," Wang Zonghao, Head of China Equity Strategy Research at UBS Investment Bank, stated. "We track approximately 800 active overseas funds that include Chinese equities in their benchmark indices. Among these, 143 funds held no Chinese equities by the end of 2025, slightly lower than the 145 at the end of the third quarter. If these funds reinstate China to their portfolios to reach benchmark weights, potential inflows could reach $16 billion. Reportedly, foreign investor interest in emerging market equities has increased in the new year, which would indirectly benefit Chinese equities." Wang also commented, "Our recent discussions with US and European investors reveal very low active positioning in consumer and healthcare stocks, with most investors cautious about automakers. We have noticed a significant increase in investor interest in the chemical industry, seen as a potential beneficiary of anti-involution policies, and in the A-share semiconductor capital equipment sector, which benefits from the domestic AI upcycle."

Liu Mingdi, Head of China and Hong Kong Equity Strategy Research at J.P. Morgan, believes that if anti-involution measures achieve substantial results, the A-share market could experience a 'slow bull' trend in 2026, potentially leading to a fundamental shift in investor confidence. Regarding sectors, Liu is focusing on property, materials, and information technology. She also mentioned that stronger signals of stabilization in the property market within the year, especially further policy easing in first-tier cities, could provide positive surprises for the market. "Unlike previous cycles, the incremental liquidity in this market phase is primarily coming from passive funds. This differs significantly from the 2014-2015 bull market, driven mainly by leveraged capital, and the 2019-2021 period, which relied more on thematic/active fund participation," analysis from Nomura Orient International Securities suggested. Looking ahead to 2026, the firm noted that the start of the 15th Five-Year Plan is expected to drive investment and inject momentum into economic growth. Concurrently, 'anti-involution' policies are anticipated to improve profit margins in non-financial industries, although due to the lag in corporate profit recognition, the full effect of these improvements is more likely to be visible in 2027.