Reported by The Paper on November 10, 2026.
Chinese A-shares have the conditions to form a bottom and rebound after months of volatility, according to Chen Guo, deputy director of research and chief strategist at Eastmoney Securities. Speaking to The Paper, he said market-stabilization measures had eased concerns about a negative feedback loop in liquidity. He expects the market to focus more closely on fundamentals as it steadies.
Chen attributed part of the earlier decline to crowded trading and overly optimistic expectations for AI commercialization and capital-spending growth around mid-2026. In his assessment, those expectations have since been reduced, while policy measures and continued inflows into broad-market ETFs have supported liquidity and risk appetite. He cautioned that a rebound would not mean investors’ confidence would quickly return to its previous level.
Looking toward the end of 2026 and early 2027, Chen said A-shares could rise unevenly rather than advance without interruption. Some investors might take profits after an initial rebound, potentially increasing disagreements about the market in December. He said a relatively stable domestic and international environment could subsequently encourage allocations based on expectations for the following year’s economy, policy and new investment flows.
Chen identified a recovery in domestic demand and related policy expectations as important issues to watch. He expects growth in overseas AI infrastructure and Chinese exports to slow in 2027, even without a collapse in AI demand. A decline and stabilization in oil prices, if it occurs, could ease costs for some Chinese manufacturers and chemical companies, he said.
On market positioning, Chen favored a balanced approach over trying to time shifts between sectors. In his view, dividend-paying and steadily growing blue-chip stocks could provide a core holding, while AI applications, emerging growth businesses and companies with potential for a turnaround could offer more upside—and greater sensitivity to market conditions. These are his assessments, not assured outcomes.
Chen also urged investors to distinguish AI’s long-term industrial prospects from the pace of capital spending and stock-market valuations. He expects US AI capital-spending growth to slow in 2027 and 2028, though stronger commercial returns could change that trajectory; he said cloud providers’ free cash flow might improve after 2029. For the next phase, he considers evidence of practical AI applications and commercialization especially important to judging whether further infrastructure spending can be sustained.
