CITIC Securities: 2026, securing pricing power means securing everything

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Produced by | China Visit Network

Reviewed by | Li Xiaoyan

From March 19 to 20, Beijing—CITIC Securities’ 2026 Spring Capital Market Forum was held as scheduled. This event gathered over 400 listed companies and more than 100 industry experts. At a critical juncture of global geopolitical reshaping and domestic economic transformation, it outlined a clear annual outlook for the market. The forum centered on the theme “Reform Breakthrough, Industry Leap,” covering macroeconomics, investment strategies, and industrial layout, releasing a series of major judgments. Among them, “Reassessment of China’s Manufacturing Pricing Power” became the core logic throughout the event.

Macroscopic Outlook: Recovery Amid Volatility, Precise Policy Efforts

2026 marks the beginning of the “14th Five-Year Plan,” with China’s economy in a key window for structural transformation. Ming Ming, Chief Economist of CITIC Securities, stated in his keynote speech “Global Economic Rebalancing” that China’s economy will continue to recover amid fluctuations, with an expected full-year real GDP growth of about 4.9%, showing a “V-shaped” growth pattern. Rising inflation will effectively boost nominal GDP, and the GDP deflator is expected to shift from negative to positive.

On the policy front, a coordinated pattern of “proactive fiscal policy and flexible monetary policy” is emerging. Ming Ming emphasized that fiscal policy will remain proactive, with a deficit ratio maintained at 4%, focusing special bonds on project construction. 800 billion yuan of policy financial instruments will continue to exert influence, leveraging quasi-fiscal measures to stabilize investment. As for monetary policy, there is room for “flexible and efficient use” of reserve requirement ratio cuts and interest rate reductions—expecting 1-2 rate cuts and one RRR cut throughout the year. Structural tools will play a larger role in supporting technological innovation and green development.

From a global perspective, the economic landscape is rebalancing. The U.S. economy faces structural contradictions, with high inflation and slowing growth exerting dual pressures, leading the Federal Reserve to adopt a cautious approach to rate cuts. In this context, asset allocation logic is clear: equities are more cost-effective than bonds during the cycle of economic recovery and inflation rise; short-term government bond yields may hover around 1.8%, supported by upcoming fundamentals; the RMB is expected to appreciate modestly amid a weakening dollar.

Strategic Focus: A-shares Enter a New Profit-Driven Phase

“Spring is a period for rebuilding confidence and making index decisions,” said Qiu Xiang, Chief A-Share Strategist at CITIC Securities. He pointed out that A-shares are at a critical turning point—valuation repair space is limited, and profit margin recovery will become the core driver of the next bull market. This judgment is driven by the dual effects of global supply chain disruptions and domestic industrial upgrades.

Geopolitical conflicts are key catalysts for market style shifts. Against rising global energy costs and weakening financial conditions, valuation levels and pricing power are two core factors in asset allocation. Qiu Xiang emphasized three key issues facing the market: the upward momentum of A-shares under global supply chain disruptions, the impact of weakening financial conditions on market style, and the restructuring of asset allocation due to AI disruptive innovation. The answers all point to “low valuation + pricing power.”

From an industrial logic perspective, China’s manufacturing sector is undergoing a critical upgrade from “market share advantage” to “pricing power advantage.” Data from 2024 shows China’s manufacturing value-added accounts for 28% of the global total, but net profit share is only 18%, contrasting sharply with the U.S., which accounts for 16% of value-added but 37% of net profits. Under the global supply chain restructuring, China’s manufacturing advantages are presenting an important opportunity for reassessment of pricing power, especially in chemicals, non-ferrous metals, electrical equipment, and new energy sectors.

In terms of allocation strategies, the forum highlighted two main themes: first, focusing on the layout of China’s manufacturing pricing power revaluation, with price increases as the core trading clue—paying attention to sectors with significant market share advantages, limited overseas supply elasticity, and high capacity reset costs; second, increasing exposure to undervalued factors, such as insurance, securities, and power sectors with potential for recovery. Qiu Xiang specifically pointed out that the logic of HALO assets in overseas markets does not fully apply to A-shares. The value of Chinese core assets lies in transforming competitive advantages into pricing power and profit margins.

Deepening Reform: Industry Upgrades and Policy Benefits Resonance

Yang Fan, Chief Macro and Policy Analyst at CITIC Securities, noted that the current macro and policy landscape presents a clear pattern of “reform breakthroughs and industry leaps,” with multi-layered reform advancing to inject lasting momentum into economic growth.

Domestically, demand-side recovery is moderate, with government work report targets stable, and fiscal policies remaining consistent with last year. Under debt reduction efforts, local governments face constraints on leverage, while the leverage effect of policy financial tools is increasingly prominent, becoming key to stabilizing investment. Income distribution reforms continue to deepen, aiming to narrow income gaps and expand the middle-income group; fiscal and tax reforms strengthen central coordination, optimize fiscal resource allocation, and provide institutional guarantees for high-quality development.

Industrial upgrades present multiple opportunities. Traditional industries are being optimized and upgraded, while emerging industries are being cultivated and expanded—accelerating the formation of new intelligent economic models. Focus areas include energy security and space power strategies, with modernization of industrial systems speeding up. Key support directions include integrated energy and electricity, satellite internet, new energy storage, and future energy sectors. The “anti-involution” work balances short-term capacity regulation with long-term systemic reform, helping industries escape difficulties and achieve high-quality development.

From a global perspective, the long-term reshaping of the Middle East geopolitical landscape, U.S. midterm elections influencing policy focus, and intensifying domestic and international engagement are all factors. Post-Q2, election tensions will intensify, likely increasing domestic attention. China-U.S. summit meetings are expected multiple times within the year, maintaining bilateral stability. The strategic resonance of Chinese companies going global and RMB internationalization is opening broad space for systemic valuation reshaping of Chinese assets.

Asset Allocation: Focus on Manufacturing Advantages and Seize Structural Opportunities

Based on macro, strategic, and industrial judgments, the 2026 spring asset allocation should focus on the two core themes of “reassessment of pricing power” and “policy dividends.” In equities, focus on China’s manufacturing advantages, emphasizing leading chemical, non-ferrous, electrical equipment, and new energy companies with global competitiveness, while also allocating to undervalued financial and power sectors to build a balanced “value + growth” portfolio.

In commodities, supply-side risks coexist with demand-side recovery. Gold-oil and gold-copper ratios may decline after reaching historical highs, with physical assets gradually showing cost-effectiveness. Gold remains a valuable safe-haven asset amid rising global geopolitical uncertainties.

In bonds, short-term government bond yields are volatile, with a break below 1.8% needing policy catalysts. Fundamentals will support yields later, so a prudent allocation approach is recommended, capturing rate fluctuation opportunities. In the currency market, RMB is expected to appreciate modestly amid a weakening dollar, presenting cross-border asset allocation opportunities.

Proactively Address Uncertainty with Certainty

In spring 2026, capital markets face external challenges from geopolitical conflicts and weakening financial conditions, but also internal opportunities from China’s economic recovery, industrial upgrades, and reform deepening. The signals from CITIC Securities’ spring forum clearly indicate a shift from valuation-driven to profit margin-driven markets, from stockpile competition to incremental allocation.

For investors, the core strategy should be to focus on China’s manufacturing pricing power enhancement, seize reform-driven industrial upgrade opportunities, use undervaluation as a safety cushion, and leverage pricing power as a growth engine. Building a resilient asset portfolio amid complex environments is key. As Zhu Yexin, member of CITIC Securities’ Party Committee, stated, in the context of a continuously optimized capital market ecosystem and increasing attractiveness of Chinese assets, responding to external uncertainties with high-quality development certainty will be crucial to navigating cycles.