Data released by the National Bureau of Statistics on January 19 shows that China's Gross Domestic Product (GDP) surpassed the 140 trillion yuan milestone for the first time in 2025, growing by 5.0% year-on-year calculated at constant prices.
Gan Jingyun, Chief Macro Analyst at Chuangjin Hexin Fund, believes this hard-worn achievement exceeded many institutions' earlier expectations. The realization of the 5% growth was primarily attributable to the increased contribution rate of new growth drivers, with high-end manufacturing and high-tech sectors making significant new progress, enabling the national economy to advance under pressure. Driven by both exports and consumption in 2025, when discussing 2026 exports, she stated that China's manufacturing sector possesses strong international competitiveness. Coupled with an expected phased easing of tariff frictions and loose fiscal and monetary policies overseas in 2026, the manufacturing cycle is anticipated to bottom out and recover, lending strong resilience to exports, although the absolute growth rate may moderate due to a high base effect.
Regarding 2026 policies, Gan Jingyun forecasts that monetary policy will remain appropriately accommodative while fiscal policy continues its proactive expansion. However, the scale of aggregate policies is expected to be limited, focusing predominantly on structural support. Key areas will include policies for service consumption, efforts against "involution," and the layout and support for a modern industrial system. In terms of ranking major Chinese asset classes, the order is equities > commodities > bonds > cash. For the weighting of risk assets like equities, she recommends maintaining a standard to overweight allocation, expressing long-term optimism for gold and non-ferrous metals, and suggests paying attention to the allocation value of large-cap value stocks and the trading value of tech growth stocks.
The transformation of the economic structure achieved remarkable results in 2025. 1. With the 2025 GDP growth rate at 5%, what core changes have occurred in the underlying driving factors? Gan Jingyun, Chief Macro Analyst at Chuangjin Hexin Fund: The 5% GDP growth in 2025 met the economic and social development targets set at the beginning of the year, representing a commendable outcome that surpassed the expectations of many institutions at the start of 2025. In January 2025, the World Bank and IMF projected China's growth for the year at 4.5% and 4.6% respectively. Behind the aggregate 5% figure lies more distinct structural characteristics: strong supply versus weak demand; strong external demand versus weak domestic demand; robust service consumption versus weaker goods consumption; vigorous high-tech investment versus weak traditional construction and installation investment. The achievement of 5% is mainly thanks to the increased contribution of new growth drivers. While the traditional economy, represented by real estate, continued to weaken, high-end manufacturing and high-tech sectors made new strides, using their stronger momentum to offset the decline of the old economy, allowing the national economy to progress under pressure.
Analyzing the three major demand components—consumption, investment, and net exports—China's growth dynamics have shifted from being primarily investment-led in the past to a dual-driver model led by exports and consumption. In 2025, the contribution rates of final consumption expenditure, gross capital formation, and net exports of goods and services to economic growth were 52.0%, 15.3%, and 32.7% respectively. The contribution rate of gross capital formation has been declining continuously, while the contribution rates of consumption and net exports have increased. This signifies an economic structural transformation, moving away from an investment-dominated model led by real estate and infrastructure, which prioritized scale and required substantial social financing and credit support. The new growth model, centered on high-tech and high-end manufacturing, places greater demand on "human capital" and "technology" than on capital itself, thereby reducing its reliance on capital.
2. The 2025 data indicates that exports and consumption played a larger role. Reflected in the capital markets, which specific sub-sectors present promising long-term investment opportunities? Gan Jingyun, Chief Macro Analyst at Chuangjin Hexin Fund: The economic structural transformation, as reflected in the capital markets, means that while risk appetite increases, liquidity and concentration of funds also rise, focusing on high-growth and small-to-mid cap sectors.
Growth momentum has performed well in the following four major areas: First, Big Tech, where strong growth in AI computing power drives prosperity diffusion across the industry chain upstream and downstream, with improving fundamentals in domestic self-sufficiency/controllability and AI applications. Second, high-end equipment, engineering machinery, and other strong manufacturing sectors, where the international competitiveness of "Made in China" continues to rise, with exports and global expansion providing growth highlights. Third, Big Resources, where policies against "involution" and concerns about US dollar credit are expected to lift the price floor for resource commodities. Fourth, service consumption, where sectors like travel and tourism show high growth rates and are also a key policy focus for stimulating domestic demand in 2026.
These four areas correspond to long-term thematic opportunities in the capital markets: tech growth (AI), global expansion/exporting, anti-involution & price increases, and service consumption.
Exports are expected to maintain strong resilience in 2026. 3. With export growth at 6.1% in 2025, can exports sustain relatively high growth in 2026? Which sectors are more competitive? Gan Jingyun, Chief Macro Analyst at Chuangjin Hexin Fund: China's foreign trade scale reached a new high in 2025, with exports amounting to approximately 27 trillion yuan, growing by 6.1%. Looking ahead to 2026, we judge that China's manufacturing sector maintains strong international competitiveness. Combined with an expected phased easing of tariff frictions and loose fiscal and monetary policies overseas in 2026, the manufacturing cycle is poised to bottom out and recover. Exports will demonstrate strong resilience, although the absolute growth rate may slow compared to 2025 due to the high base.
Advantaged export and global expansion industrial chains include: First, the new energy chain (new energy vehicles, photovoltaics, energy storage), leading in technology and cost advantages, holding the top global market share. Second, high-end manufacturing, including shipbuilding, engineering machinery, automation equipment, and power grid equipment, where both precision manufacturing capacity and technology are advancing, domestic substitution is accelerating, and China's export competitiveness continues to improve due to cost-performance advantages. Third, chemicals and new materials, such as fine chemicals, rare earth materials, and high-performance alloys, where China possesses resource endowment and economies of scale, leading global production capacity for some chemicals and dominating the global supply of rare earth permanent magnet materials. Fourth, innovative drugs and medical devices, which are experiencing high export growth and gradually entering European and American markets.
The era of abundant aggregate liquidity may be concluding. 4. Considering the alignment between 2025 GDP growth and M2 growth, what was the state of liquidity in 2025? What about liquidity in 2026? Gan Jingyun, Chief Macro Analyst at Chuangjin Hexin Fund: By the end of 2025, the growth rates of aggregate financing to the real economy (AFRE) (8.3%) and M2 (8.5%) were about 1.3 and 1.5 percentage points higher than the sum of the economic growth and CPI target (7%), indicating overall ample market liquidity. More importantly, while monetary liquidity is abundant, the willingness of the private sector to expand credit is not strong, leading to slower expansion of broad liquidity. This stems from changes in the demand for AFRE and credit due to the structural transformation and the differing needs of old and new growth drivers. The traditional real estate investment model, characterized by high leverage, high capital input, and high turnover, required strong credit demand. In contrast, the new growth drivers, represented by high-end manufacturing and high-tech industries, focus on "human capital" and "technology." Their main capital expenditure occurs during capacity expansion phases, resulting in lower reliance on credit. Therefore, the era of abundant aggregate liquidity might be declared over.
2026 policies may lean towards structural support; focus on large-cap value allocation and tech growth trading opportunities. 5. What are your predictions for 2026 macroeconomic growth and policies? What risks require attention? Gan Jingyun, Chief Macro Analyst at Chuangjin Hexin Fund: We anticipate that a 5% GDP growth target will still be set for 2026. New growth drivers will continue to expand while the old economy gradually stabilizes, leading to a narrowing of the supply-demand gap. Structurally, compared to the divergent characteristics of 2025, convergence is expected. Service consumption will become a key driver boosting consumption growth, with the household consumption rate increasing and the consumption contribution rate rising. The investment structure will gradually optimize, with infrastructure and manufacturing investment growing at relatively high rates, while the decline in real estate investment is expected to narrow. Export growth may slow somewhat but will maintain resilience.
Regarding policies, we judge that monetary policy will remain appropriately accommodative and fiscal policy will continue its proactive expansion. However, the magnitude of aggregate policies is expected to be limited, with a primary focus on structural support. Key areas will include policies for service consumption, efforts against "involution," and the layout and support for a modern industrial system.
In terms of major risk points, first are domestic prices: the impact of anti-involution policy intensity and the repair of the supply-demand gap on price levels is significant. Both the risk of rapidly rising prices (inflation) and the risk of persistently low prices (deflation) have major implications for asset allocation. Second is the risk of an overseas AI bubble, which could transmit to capital expenditure and asset prices in domestic AI-related sectors.
6. What are the relevant asset allocation recommendations for 2026? Gan Jingyun, Chief Macro Analyst at Chuangjin Hexin Fund: Corresponding to asset allocation, monetary and credit conditions will remain loose in 2026, but aggregate factors will give way to structural ones. The economy will focus more on balance, and the trend of rising prices will repair nominal growth. Market pricing factors will gradually shift from "liquidity" to "price + profitability."
In terms of ranking major Chinese asset classes, the order is equities > commodities > bonds > cash. It is recommended to maintain a standard to overweight allocation for risk assets like equities, with long-term optimism for gold and non-ferrous metals.
Investors are advised to focus on the allocation value of large-cap value stocks and the trading value of tech growth stocks. Core assets, such as high-dividend stocks, gold, non-ferrous metals, along with large-cap value broad-based indices and free cash flow indices, can serve as the "ballast" of a portfolio. Satellite assets can be used for trading strategies involving tech growth and micro-cap stocks. Structurally high-growth industries like AI, tech internet, pharmaceuticals, and high-end advantaged manufacturing are key focuses. Additionally, resource sector stocks should be monitored based on price movements.
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