Industrial robots collaborate on cutting and welding in a smart workshop in Taicang, Jiangsu Province, China, on July 21, 2026. (Photo: VCG)
A wave of share buybacks, stake increases and fresh investment commitments from China's state-owned enterprises (SOEs) and major financial institutions is sending a clear message: confidence in Chinese assets is strengthening as the second half of 2026 begins.
Over the weekend, a broad range of central SOEs announced plans to increase holdings or repurchase shares, spanning sectors from aluminum, energy and coal to rail equipment. At the same time, leading insurers, including Ping An Insurance, PICC, CPIC and New China Life, pledged to expand equity allocations, with a particular focus on technology, advanced manufacturing, new infrastructure and other strategic industries. State capital operators, including China Reform Holdings Corporation and China Chengtong Holdings, also reaffirmed their commitment to deploying hundreds of billions of yuan to support the market through share purchases and ETFs.
The coordinated moves go beyond near-term market stabilization. Long-term capital is increasingly positioning itself around sectors aligned with China's industrial upgrading and innovation agenda, rather than pursuing short-lived market momentum.
That domestic confidence is beginning to find international echoes. Citigroup has upgraded Chinese equities to "overweight" from "neutral" within its emerging market allocation, citing improving global growth prospects, a more supportive liquidity backdrop and stronger earnings potential. The bank expects Chinese companies to rank among the leading contributors to earnings growth across emerging markets in 2026.
Visitors queue up at the 2026 World Artificial Intelligence Conference (WAIC 2026) in Shanghai, China, on July 17, 2026. (Photo: VCG)
Citi Group upgraded its rating on Chinese equities in emerging market allocations to overweight from tactical neutral in its emerging market asset allocation on Monday, signaling a positive outlook for Chinese assets in the second half of the year.
Chinese equities stand to benefit from the global stock market rally and improving growth environment, according to Citi analysts in its latest research report. The report noted structural changes in emerging market opportunities, with further upside possible if geopolitical risks ease, liquidity improves and the macro environment stays favorable.
Citi projected significant earnings growth for MSCI Emerging Markets Index constituents this year, with Chinese and South Korean companies leading in earnings improvement potential. The upgrade comes as AI- and chip-driven rallies in the US and South Korean markets since April have recently seen notable pullbacks.