HSBC Private Banking and Wealth Management China’s Chief Investment Officer expressed a positive outlook on the Chinese stock market.
“With the widespread adoption of artificial intelligence (AI) and the deepening trend of domestic AI substitution, we expect significant improvements in the profit growth rates of three types of companies by 2025—AI infrastructure providers, enablers, and application developers—compared to previous years. We remain optimistic about this high-quality growth sector.” The officer noted that in the future, the core businesses of China’s major tech companies will further integrate with AI, continuing to boost investment confidence in the industry.
As China’s pro-consumption policies continue, consumer confidence is expected to strengthen further, leading to a favorable outlook for the consumer sector.
According to the analysis, driven by subsidy policies for trade-in programs, retail sales of home appliances, audio-visual equipment, and furniture in China have shown robust growth since the beginning of the year. Meanwhile, new consumer trends and waves are emerging, with sectors like tea beverages, trendy toys, affordable luxury, and pet-related products rapidly gaining traction. These new consumption trends are partly driven by long-term societal and demographic shifts in China, which are reshaping the consumer market.
“Generation Z (those born between 1995 and 2009) is increasingly becoming the core force behind new consumption trends. Data shows that while Gen Z accounts for less than 20% of China’s total population, they contribute around 40% of total consumer spending. By 2035, Gen Z’s overall consumption is projected to grow fourfold, reaching 16 trillion yuan. Therefore, we anticipate that as Gen Z’s purchasing power continues to rise, the ‘new consumption’ trends they lead are likely to sustain growth, presenting structural opportunities in this sector.”
