Recently, Trump has threatened to impose 100% tariffs on all Chinese goods starting November 1st, along with export controls on all critical software.

Many believe that the China-US trade war will resume, returning to the situation in April, and that the stock market will face significant impact.

However, this Monday's stock market performance was more stable than expected. Even at 2 PM, the Shanghai Composite Index fell by less than 0.5%. In the past, such news would have triggered declines of at least 4%. This demonstrates that A-shares have significantly strengthened their resistance to declines.

Why are A-shares so stable?

First, having experienced the trade war in 2018 and again in April this year, China has accumulated rich experience and sufficient response tools. People have gained more confidence in China's ability to handle these complex situations.

Second, China has made significant progress in areas where it faces technological bottlenecks. Facing US restrictions in the chip sector, China has gradually demonstrated breakthrough capabilities, with domestic substitution proceeding vigorously within the country.

Third, the government's attention to the stock market is unprecedented, and this attention is backed by real financial commitment. Looking ahead, regulators have clearly stated that starting from 2025, 30% of annual new insurance premiums will be used to invest in A-shares, and public fund holdings of A-share market capitalization must grow by at least 10% annually for the next three years. In the near term, the government has sufficient tools to prevent abnormal stock market declines, such as national team intervention and the central bank's two monetary policy tools.

Particularly after the market rescue in April, everyone generally believes that the government will not let the stock market fall unchecked.

Under these circumstances, there are two possible directions for future market development. If "tariffs" continue, A-shares may experience short-term volatility, but a major decline like in April is unlikely. Alternatively, if China-US negotiations go well, the index could potentially break through 4,000 points, with securities ETF (512000) as a bull market leader becoming one of the main beneficiaries.

Regarding Hong Kong stocks, Monday's decline was larger than A-shares, but in terms of value proposition, Hong Kong stocks actually offer better value than A-shares. Due to sufficient prior corrections, Hong Kong stocks are trading at low valuations. Hong Kong internet giants are generally valued at 13-25 times PE, lower than US tech stocks at 30 times and below the Hang Seng Tech Index at 25 times.

Hong Kong internet giants are currently the main force in domestic AI development. Previously, Alibaba announced it is actively advancing a 380 billion yuan AI infrastructure construction plan and will continue to increase investment.

Industry experts say that over the past year, global AI industry investment has exceeded $400 billion, and over the next five years, global cumulative AI investment will exceed $4 trillion. This will accelerate the development of more powerful models and accelerate AI application penetration.

Internet giants' continued increased investment in AI computing infrastructure will accelerate large model iteration and application implementation. Hong Kong tech leaders will benefit significantly.

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Finally, a supplementary note: A-shares currently maintain high trading volumes, which is a typical bull market characteristic. This volume level has persisted for about a year, demonstrating strong stability with no signs of decline in the short term. Under current conditions, every major market decline represents a good golden pit opportunity.

Note: This article represents only personal views. Short-term movements do not predict future performance. Any mention of individual stocks or funds does not constitute investment advice. Investment requires caution!