As recent A-share market fluctuations intensify, compounded by multiple external factors, investor anxiety has grown, with some negative rumors surfacing on online platforms and disrupting market sentiment and order. How should investors face volatility during market corrections? How should the real impact of external factors be assessed? How can confidence be further strengthened?
Market experts unanimously state that there is no need to fear volatility, as the safety of Chinese assets and technological innovation serve as strong pillars of the market's inherent stability. China remains in a low-interest-rate environment with reasonably ample liquidity, and the primary source of recent market concern stems from rising U.S. Treasury risks. With the total U.S. debt surpassing the $40 trillion mark and the 30-year Treasury yield briefly hitting 5.3%, its highest level in nearly 19 years, concerns over U.S. fiscal sustainability have intensified. However, experts emphasize that China's interest rate policy remains independently determined, and the U.S. debt crisis does not alter China's low-rate, liquidity-sufficient monetary environment.
Analysts further note that foreign institutions hold less than 5% of the total free-float market value of A-shares, meaning that even if rising U.S. Treasury yields squeeze global capital markets, the impact on China's capital market remains quite limited. The capital market acts as a barometer of the economy, and a steadily improving Chinese economic foundation is the prerequisite for the market to withstand challenges. According to the National Bureau of Statistics, China's GDP reached 69.6 trillion yuan in the first half of the year, growing 4.7% year-on-year at constant prices, in line with the annual growth target. Achieving steady growth and high-quality development despite a high GDP base and multiple domestic and international challenges demonstrates the strong resilience and vitality of the Chinese economy.
A senior securities analyst noted that China's non-fossil energy has surpassed oil, accounting for over 60% of installed power generation capacity, while energy supply and prices remain stable. China also possesses the world's most complete industrial and supply chain systems, the largest and most extensive network infrastructure, and leading advantages in reserves, extraction, and application across multiple key minerals and resources. These strengths form the foundation for building a modern industrial system and achieving high-quality development, and they are also the greatest source of confidence for the healthy and resilient growth of China's capital market.
Listed companies' operating performance provides further confirmation. As of August 23, over 1,700 A-share companies had disclosed their 2026 semi-annual reports, with more than 1,400 reporting profitability, accounting for over 80%. Some 680 companies achieved growth in both revenue and profit, with nearly 30% reporting profit growth exceeding 50%. Among the 598 Shanghai-listed companies that have released their interim reports, over 150 saw year-on-year profit growth surpassing 50%. The net operating cash flow of A-share companies that have disclosed their semi-annual reports exceeds 15 trillion yuan, with a median year-on-year growth rate of 7.3%, indicating that the operational quality of listed companies is continuously improving.
Technology has become a key engine of economic growth. Recent pullbacks in the A-share technology sector have raised concerns among investors, but market experts advise against excessive anxiety, stating that the correction is a natural fluctuation following rapid valuation gains earlier, and that technological self-reliance remains a strategic pillar of China's high-quality economic development. New industries, new technologies, and new products are becoming important windows into China's economic vitality. Data shows that in the first seven months of 2026, high-tech manufacturing and equipment manufacturing accounted for 17.9% and 37.2% of the value added by industries above a designated size, respectively.
The semiconductor supply chain serves as a powerful example. Amid the continued rise of the AI computing ecosystem, companies across wafer manufacturing, chip design, and packaging and testing have delivered impressive results. Foxconn Industrial Internet Co., Ltd. reported total revenue exceeding 557.8 billion yuan in the first half of the year, with net profit attributable to shareholders reaching 23.74 billion yuan, up nearly 96% year-on-year, while GPU cabinet shipments surged 3.2-fold. Semiconductor Manufacturing International Corporation achieved second-quarter sales revenue of $3.006 billion, up 20.0% quarter-on-quarter and 36.1% year-on-year, with gross margin improving to 25.3%, up 5.2 percentage points from the first quarter.
In the innovative drug sector, a new value logic of high growth, strong profitability, and sustainability is taking shape, with business development licensing becoming a major source of profit and operating cash flow for innovative drug companies. For example, innovative drug companies on the STAR Market generated combined revenue of 74 billion yuan in 2025, up 30% year-on-year, with the industry's net profit attributable to shareholders turning positive for the first time. To date, upfront payments from BD transactions by STAR Market innovative drug companies have exceeded $5.1 billion, with total payments surpassing $40 billion, covering cutting-edge technology areas such as bispecific antibodies and antibody-drug conjugates.
"For technology and innovation industries, the high industry prosperity has not fundamentally changed," one expert stated. "The technology sector has already undergone sustained corrections, and the safety margin will further thicken, so the market need not worry excessively."
Rebuilding confidence and stabilizing sentiment have become key priorities. In recent years, through the joint efforts of all parties, China's characteristic market stabilization mechanisms have been continuously improved, and the long-term capital investment ecosystem has been steadily optimized. By the end of July 2026, the total scale of ETFs on the Shanghai and Shenzhen exchanges approached 5 trillion yuan, with Shanghai-listed ETF products exceeding 3.4 trillion yuan. Meanwhile, external disturbances continue to occasionally affect market operations.
"The actual impact is not as significant as it seems; the market's tendency to follow trends is more of an emotional response," a private equity fund manager told reporters. The key to breaking through lies in further rebuilding confidence and stabilizing sentiment. For the capital market, resilience and confidence have always been inseparable. Increased market volatility negatively impacts confidence, while stronger confidence in turn enhances market resilience. Similar examples have repeatedly occurred throughout A-share history. Due to a lack of common consensus on the internal logic and fundamental connotation of market resilience, many are easily influenced by external fluctuations, with "getting out first" becoming the default choice for most. When more people act on this logic, the market becomes prone to herd selling and stampede risks, further eroding confidence and creating a negative cycle.
How can this negative cycle be broken? The market has relevant experience. In late February, affected by heightened geopolitical uncertainty and surging oil and energy prices, major global markets suffered significant declines. By the end of March, the three major U.S. stock indices had fallen around 8%, while Germany's DAX, Japan's Nikkei 225, and South Korea's KOSPI all dropped more than 10%, and the Shanghai Composite Index fell 6.5%. Behind this was confidence in the inherent stability of the capital market, anchored by the safety of Chinese assets and technological innovation, which guided the market to adhere to long-termism and remain undaunted by short-term volatility.
Looking at today, the fundamentals of China's economy and capital market have not undergone substantive changes compared to that period. What truly impacts the market is the confidence of all parties involved. For the current capital market, stabilizing confidence means stabilizing sentiment, and stabilizing sentiment means stabilizing the market. Where does the root of confidence lie? It lies in the tangible data and logic analyzed above, in the specific practices of macroeconomic and listed company operations, and in the consensus built among market participants.
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