By: Robert Kensington
Investors face a tricky situation. Economic data improves, but confidence is selective. Corporate earnings recover, yet market enthusiasm lags. At Shenwan Hongyuan’s 2026 Summer Capital Market Strategy Conference in Shenzhen on June 10, it was said China’s economy may take an “N-shaped” path this year. Recovery is there, but not a straight line.
Officially, Shenwan Hongyuan executives claim nominal growth, corporate profitability, and industrial momentum are up. Zhou Haichen pointed to the Fifteenth Five – Year Plan’s focus on domestic demand, people, and tech. Chief Economist Zhao Wei said the economic cycle bottomed in Q3 2025 and recovery continues in 2026. He also warned of Middle – East geopolitical risks.
In reality, while the economy shows signs of recovery, geopolitical issues around the Strait of Hormuz could disrupt oil prices and global growth. Rising oil prices may widen economic gaps and increase the hunt for high – quality assets. Also, the market is moving from valuation repair to earnings verification.
The next phase of China’s market will likely see sectors that can turn narrative into earnings shine. Shenwan Hongyuan focuses on areas like optical communications, PCB manufacturing, and AI – related infrastructure. These sectors with measurable growth will likely lead the way.
Author bio: Robert Kensington, an overseas entrepreneurial veteran with decades of real – economy industrial investment experience.