Looking ahead to the fourth quarter, Greater China equities remain attractive, according to Xie Qigang, Senior Portfolio Manager for Greater China Equities at Manulife Investment Management. Key drivers include the Fed's first rate cut of the year in September, which may redirect global capital toward higher returns in emerging markets. Additionally, China's policy shift toward demand-side measures—such as fertility subsidies and public services—aims to boost household consumption. The upcoming 15th Five-Year Plan will prioritize technological innovation and renewable energy, with China setting 2035 emission reduction and energy transition targets at the UN Climate Summit, benefiting equipment manufacturers and energy storage firms.

Year-to-date, Greater China equities have delivered strong performance, with the MSCI China Index surging over 40% and the MSCI Golden Dragon Index up 35% in the first nine months. The third quarter saw a robust rebound, with offshore Chinese stocks and A-shares rising 21% and 15%, respectively, reflecting improved market sentiment. Leading sectors included hardware, semiconductors, materials, and healthcare.

Corporate earnings have also improved, with upward revisions in H1 2024 for tech, semiconductors, and biotech. AI demand remains robust, with generative AI driving supply chain upgrades and edge AI device development exceeding expectations. Liquidity is another bright spot, as sustained southbound inflows, a healthy IPO pipeline, and returning offshore capital bolster Hong Kong's market. Further upside is possible if earnings growth broadens across sectors.

While risks persist, China has ample capacity to address challenges. Overall, Greater China equities are in a stronger position than last year. Q3 saw expanded policy support for real estate, consumption, infrastructure, and tech, unlocking growth opportunities in healthcare, advanced manufacturing, AI, autonomous vehicles, and humanoid robotics. Healthcare innovation remains a key area, with steady licensing demand.