Foreign investors are increasingly optimistic about Chinese assets. At present, global institutions are showing growing interest in China's markets. According to recent reports, JPMorgan predicts that the MSCI China Index could rise by approximately 18% by the end of 2026, supported by steady global economic growth, improved corporate earnings, and easing competition among major Chinese e-commerce players. HSBC Private Bank also forecasts the Hang Seng Index to reach 31,000 points by late 2026, implying a potential upside of around 21% from current levels.
Morgan Stanley data reveals that foreign long-only funds have purchased about $10 billion worth of A-shares and Hong Kong-listed stocks as of November this year. Analysts expect the trend of foreign capital inflows into Chinese assets to continue in 2026, driven by policy support, corporate earnings recovery, and attractive valuations.
"Chinese Stocks Rally to Continue" On December 9, JPMorgan's Chief Asia and China Equity Strategist, Mingdi Liu, stated at a press conference that the MSCI China Index is expected to rebound further next year as corporate valuations normalize and profitability improves in key sectors.
Liu noted, "Corporate earnings give us confidence. Both A-share and Hong Kong markets are gradually recovering." JPMorgan projects the MSCI China Index to rise by 18%, the CSI 300 by 12%, and the MSCI Hong Kong Index by up to 18% by end-2026, benefiting from capital inflows and a recovery in real estate sentiment.
Liu highlighted that easing price wars in e-commerce and delivery sectors—previously led by Alibaba, JD.com, and
HSBC Private Bank remains bullish on Hong Kong equities, forecasting the Hang Seng Index at 31,000 by 2026. Prudence Chan, Chief Investment Officer for Asia at HSBC Global Private Banking, emphasized that tech sector earnings will drive the market, with AI investments fueling data center growth and power demand.
**Foreign Capital Inflows Surge** Morgan Stanley reports $10 billion in net foreign buying of Chinese stocks this year, a sharp reversal from 2024's $17 billion outflow. JPMorgan recently upgraded China equities to "overweight," while Allspring's Gary Tan noted their growing appeal as a "must-have" asset class.
Valuations remain attractive, with the MSCI China Index trading at 12x forward P/E, below Asia's 15x and the S&P 500's 22x. Major asset managers, including Amundi, BNP Paribas, Fidelity, and Man Group, anticipate further gains in 2026.
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