China-Canada Fund Rights Weekly Report | The Market Needs to Refind the Main Theme

1. Market Review and Analysis

(1) Major Index Overview:
Last week, the main A-share indices all declined, with trading volume decreasing marginally.

(Source: Wind, Data range: 2026/03/02 - 2026/03/06)

(2) Shenwan First-Level Industry Performance

(Source: Wind, Data range: 2026/03/02 - 2026/03/06)

2. Macro Events and Data

Two Sessions “Government Work Report” Commentary

1. Key Task and Indicator Comparison

2. Specific New Measures and Comments on 2026 Industries

1. Technology: Artificial Intelligence + Action Enhancement
The 2025 government work report first proposed the “AI+” initiative, emphasizing R&D, application, and computing power infrastructure. In 2026, the focus is on deepening and expanding AI+, promoting the rapid adoption of new-generation intelligent terminals and agents, pushing for commercial-scale applications, and cultivating new intelligent industries. New infrastructure projects include large-scale intelligent computing clusters and compute-electricity collaboration, supporting open-source AI communities. The plan aims to develop emerging pillar industries such as integrated circuits, aerospace, biomedicine, and low-altitude economy, and to nurture future industries like energy, quantum technology, embodied intelligence, brain-computer interfaces, and 6G, which will continue to receive policy and financial support.

3. Counter-Inner-Loop: Continued Rectification
   Additional measures in 2026: Use of capacity regulation, standards, price enforcement, and quality supervision to deeply rectify “inner-loop” competition, fostering a healthy market environment. Compared to 2025, efforts will intensify, especially in traditional sectors like building materials, steel, and manufacturing, to further eliminate excess capacity, with continued reduction in carbon emission indicators.

4. Domestic Demand: New Urban-Rural Income Increase Plan
   First-time proposal to develop and implement a plan to increase income for urban and rural residents, with practical measures to boost low-income groups, increase property income, and improve salary and social security systems. This is a significant move to realize the concept of “Investing in People” and address fundamental issues of insufficient domestic demand. Follow-up focus will be on tracking progress.

In terms of boosting consumption, the plan includes supporting consumption upgrades through 250 billion yuan in ultra-long-term special bonds for old-for-new exchanges and setting up 100 billion yuan in fiscal and financial coordination funds to stimulate domestic demand.

Regarding consumer scenarios, 2026 will see the implementation of paid staggered leave for employees, support for regions to promote spring and autumn holidays in primary and secondary schools, and support for offline economy to enrich consumption scenarios.

5. Risk Management: More Specific
   Compared to 2025, 2026 emphasizes “proactively and prudently resolving risks”, including enhancing risk disposal resources and methods for small and medium-sized local financial institutions, and resolving non-performing assets prudently. There are plans to issue 300 billion yuan in special bonds to supplement the capital of state-owned banks.

3. Summary
Overall, the policy is pragmatic and aligned with market expectations, reflecting high-level awareness of complex situations. Future policy efforts should be more targeted, focusing on technology and domestic consumption. In the short term, the impact on market structure and style is expected to be limited. In the medium to long term, the implementation of “Investing in People” and technological industry policies will be key.

4. Market Outlook

(1) Last Week Summary:
Market sentiment remained cautious, with risk aversion high, and financing levels continued to decline.

(2) Short-term View:
The main influences are the Iran conflict and the “HALO trade” sentiment (heavy assets, low obsolescence, where companies with low depreciation and high assets outperform in technological progress). Chinese stocks are less affected but not immune. As events unfold, market sentiment remains highly volatile, with increased risk aversion. In the short term, sectors like precious metals, industrial metals, chemicals, oil, shipping, and domestic cyclicals with supply-side logic may see continued momentum. Expect short-term volatility, with markets waiting for related events to settle before identifying main themes.

(3) Medium to Long-term View:
Post Iran conflict and HALO trade stabilization, markets will seek new narratives that can be linearly extrapolated. Earnings season approaching will enhance the influence of financial results on individual stocks. Technology growth remains advantageous, with improving macro fundamentals. The long-term logic of the tech sector persists, making it a priority for increased allocation. Conversely, many dividend and cyclicals face fundamental or long-term narrative challenges, requiring strong catalysts (e.g., export pressure offset by investment and consumption policies, or easing measures amid US rate cuts). The government’s firm stance on boosting domestic demand, improving PPI data, and increasing internal consumption suggests potential for further market inflows supported by ample liquidity and low interest rates.

Long-term perspective:
The ongoing US-China strategic competition continues, with the US’s increasing deficits and policy clarity raising doubts about US governance and credibility. However, the US dollar remains resilient, and US Treasuries pose no immediate risk. Changes in US markets and potential strategic opportunities for China are worth watching. With US economic uncertainty and the Fed’s rate cut cycle, RMB appreciation against the dollar has occurred, and foreign capital inflows could support Chinese equities. Additionally, regulatory policies may further promote passive management, long-term institutional investment, and increased retail participation, as evidenced by rising holdings of large insurance firms and increased retail stock investments. Over the long term, market inflows are likely to continue.

(4) Industry Outlook:
For defensive dividend sectors, moderate increases in allocation are advisable, especially if aggressive sectors remain under pressure and market sentiment worsens.
In aggressive sectors, focus on technology (with ongoing catalysts like Nvidia GTC conference, AI chip development, and aerospace), domestic demand-related sectors benefiting from international tensions and HALO trade (industrial metals, chemicals, oil, shipping), and sectors with supply-side advantages (e.g., certain machinery and new energy segments).
Weak US dollar trades (precious and industrial metals) may see increased volatility due to Iran conflict but remain long-term opportunities.

4. Risk Warning:
All information in this document is sourced from publicly available data. No guarantee is made regarding its accuracy, completeness, or reliability. The opinions and analyses herein represent the research team’s views and do not constitute investment advice or guarantees. Unauthorized reproduction by media, websites, or individuals is prohibited.