Goldman Sachs recommends overweight position on China equities in 2026 outlook

China's equity markets kicked off 2026 with strong momentum, building on last year's gains, as global investment bank Goldman Sachs doubled down on its bullish stance, urging investors to maintain an overweight position on Chinese stocks.

In a macro report released by Goldman Sachs on Monday, the investment bank affirmed its recommendation to overweight both A-shares and H-shares within the Asia-Pacific region, citing robust economic fundamentals and supportive policy tailwinds.

"We are maintaining our overweight recommendation for China's A-shares and H-shares within the Asia-Pacific region for 2026, as we believe both markets have solid upside potential over the year ahead. Our current forecast points to a return of around 15 percent," said Liu Jinjin, chief China equity strategist at Goldman Sachs in an interview with China Central Television.

According to Goldman Sachs' latest Investment Outlook 2026 report, China's economic growth in the new year will be significantly supported by strong exports of high-tech and high-value-added products.

On the macro front, Goldman Sachs highlighted a favorable liquidity environment for the Chinese equity market. With the U.S. Federal Reserve expected to continue its rate-cutting cycle, and the People's Bank of China, the country's central bank, maintaining a moderately loose monetary stance, liquidity conditions are poised to support further equity market gains.

"We believe that China's exports will be quite strong this year, and this will be the biggest contributor to GDP. We expect corporate earnings to grow by about 14 to 15 percent year on year in 2026. I think one key factor investors should watch in 2026 is liquidity, both internationally and domestically, as we believe the ample liquidity will provide positive support to the equity market," said Liu.

Sector-wise, Goldman Sachs expects the "AI+" investment theme to dominate China's equity landscape in 2026. The bank identifies hardware technology, insurance, entertainment, and online retail as particularly attractive segments.

"Sectors and specific stocks related to AI remain among those we believe will perform particularly well this year. We also favor stocks with a high potential to gain more market share in overseas or global markets," said Liu.

Goldman Sachs recommends overweight position on China equities in 2026 outlook

Some Japanese people said on Thursday that the government led by Prime Minister Sanae Takaichi must firmly uphold the pacifist constitution.

Their remarks came after French President Emmanuel Macron's visit to Japan from Tuesday to Thursday.

Attending a joint press conference with Takaichi on Wednesday, Macron emphasized that France and Japan have agreed on the importance of on the importance of quickly de-escalating the conflict in the Middle East and upholding international law.

Many saw this as a response to a strongly worded post by U.S. President Donald Trump on social media, which criticized France for refusing to cooperate with the U.S.-Israeli war on Iran.

Some locals in Tokyo expressed their opposition to Japan's involvement in any war, but said Japan could offer help when the conflict in the Middle East ends.

"I think that Prime Minister Takaichi could offer support, provided that we wouldn't get involved in an armed conflict, such as minesweeping operations at sea, as Japan has the best minesweeping technology in the world," said a resident in Tokyo.

"I'm not entirely sure what consequences will follow Trump's demands. There may be additional tariffs, among other things. Our constitution prohibits [Japan's] from getting involved in war, and Prime Minister Takaichi should uphold this principle," said another resident.

Tokyo residents urge PM Takaichi to uphold pacifist constitution