The global financial institution UBS said it expects momentum in China's equity market to continue into 2026, forecasting that A-share company profits to rise by eight percent in 2026 and the country's economy will expand by 4.5 percent.
UBS released its annual outlook at a conference in Shanghai on Tuesday, striking an optimistic note on both equities and growth. It projects A-share company profits to rise this year, following a 5.5 percent increase in the first three quarters of 2025, driven largely by financial sector gains.
China's equity market has rallied in recent months. The Shanghai Composite Index surpassed the 4,000-point mark by the end of 2025.
While projected GDP growth in 2026 may appear more moderate, UBS analysts said that growth will be supported by improvements in the real economy.
"The supportive policies that are coming, obviously, it's the 15th Five-Year Plan, and I think we're very excited about what that means, and the technology side, equally I think, when it comes to biotech, there's a lot of excitement. Clearly there's always been a lot of interest in EVs, the brands becoming global, Chinese brands. I live in London. You can't go anywhere without seeing Chinese electric vehicles and Chinese mobile phones. So I think that the potential for continued growth is real," said Neil Hosie, global head of execution services at UBS Global Markets.
UBS said that challenges remain, particularly in boosting domestic consumption and stabilizing the property sector, but the company maintains a generally positive outlook.
"China appears to be pretty resilient to tariffs, which is very good news for China. On the other end, of course China, there are more sort of long-term challenges, which is really about the sort of geopolitical environment. That's one. The second one is more purely economic, and it is really about maintaining this growth between 4 and 5 percent. We currently have a growth forecast of 4.5 percent for 2026. We are confident this can be achieved, but over the medium and long term, these issues will have to be addressed eventually," said Massimiliano Castelli, head of global strategy for global sovereign markets at UBS Asset Management.
UBS forecasts 8 pct growth in China's equity market for 2026
