Goldman predicts further growth of 20% for the Chinese market in 2026. What will be the driving force behind this?

Goldman Sachs expects China's key stock indices to continue growing in 2026, but at a slower pace than in 2025, Bloomberg reports. According to analysts, this growth will be supported by the development of artificial intelligence and Chinese government policy measures.

According to Goldman Sachs' forecast, the MSCI China Index will gain 20% relative to its closing level at the end of 2025 and reach 100 points by the end of 2026. The CSI 300 Index is expected to gain 12% over the same period, reaching 5,200 points, according to Goldman Sachs strategists led by Kinger Lau.

According to analysts, the growth of the Chinese stock market in 2026 will be driven primarily by increased corporate profits. This process will be supported by the development of artificial intelligence, the strategy of Chinese companies to enter foreign markets, and the PRC's economic policy measures aimed at curbing price competition, Bloomberg notes.

Strategists also raised their forecast for corporate earnings growth in the Chinese market, expecting it to accelerate to 14% in 2026–2027, compared to 4% in 2025.

Also, according to strategists' estimates, net purchases of Hong Kong-traded stocks by investors from mainland China could reach $200 billion, which would be a new record. At the same time, foreign investors are expected to "begin to reduce their underweight position in Chinese assets," Goldman Sachs said, noting that this could potentially lead to an inflow of about $10 billion into the market.

Goldman Sachs has long held a positive view of the Chinese market, often bucking the pessimistic sentiment of investors during periods of decline. In early January 2025, the MSCI China Index entered a bear market, losing about 20% from its early October 2024 level. The CSI 300 Index lost more than 5% in the first seven trading sessions of 2025, its worst start to the year since 2016. Despite this, a year ago Goldman Sachs strategists predicted that Chinese stocks would grow by about 20% by the end of 2025. As a result, by the end of last year, the MSCI China Index had gained 28%, while the CSI 300 Index had risen 18%. The S&P 500 rose just over 16% during the same period.

The CSI 300 Index has gained 3.2% since the beginning of 2026 and risen to its highest level in four years, Bloomberg notes. The MSCI China Index rose by approximately 3.6%, outperforming the S&P 500, which has gained 1.5% since the beginning of the year. Investor enthusiasm was also reflected in domestic trading volumes, Bloomberg notes. On Tuesday, January 6, they reached their highest level since mid-September 2025. The volume of outstanding margin loans used to purchase shares also remained close to record levels, the agency reports.

This article was AI-translated and verified by a human editor