Middle East Turmoil! "Black Swan" Takes Off, Global Stock Markets Plunge! Where Are the Advantages of A-shares?

Will the A-shares go where? In the short term, market sentiment will impact A-shares; but in the long run, in a turbulent world, physical assets are the ark, confidence is the valuation, and strength is the backing.

Since this year’s Spring Festival, the “Cool China” phenomenon has become popular. China’s efficient infrastructure, cheap water, electricity, and gas, safe and clean living environment, black-lit factories, cool robots, large AI models, and more have all become hot topics in Western countries. This cognitive revolution about China is undoubtedly changing global perceptions of China’s asset valuations.

China has always been the most stable force in a turbulent world. Its 16-year streak as the world’s second-largest economy ensures stable valuations for stocks, bonds, and currencies. The institutional advantages, scale, complete industrial chain, and talent pool behind Chinese assets are increasingly recognized by global investors amid global instability.

Guojin Securities’ strategy team believes that Chinese assets possess the strongest physical attributes globally, making their valuations worth paying attention to during turbulence. Financial and tech bubbles are more vulnerable to shocks, but A-shares are undervalued, with prominent manufacturing traits, and shareholder returns are at an all-time high. Their solid return capabilities are especially valuable in a volatile financial world.

Warren Buffett has experienced many wars in his over 60-year investment career, but his results show that the fundamental principle of “buying high-quality assets at reasonable prices” remains unchanged despite major historical events.

China’s Asset Ship Steady Sailing

China’s stock, bond, and currency markets remain stable. This week, the renminbi continued to strengthen, approaching the 6.9 level against the US dollar, maintaining near a three-year high. The RMB/USD central parity rate has appreciated 2.22% since 2025 and another 1.8% this year.

Our interest rate market has eased, with major bond yields in the interbank market generally declining. The 7-day Shanghai Interbank Offered Rate (SHIBOR) closed at 1.412% on March 6, down 8.8 basis points this week. When panic strikes, risk-averse funds are reluctant to lend, causing rates to spike. The US 10-year Treasury yield rose nearly 20 basis points this week, breaking 4%. Recently, domestic money market rates have fallen across the board, driven by both ample liquidity and stable expectations.

A-shares have also withstood the test. As of this Friday’s close, the Shanghai Composite was at 4,124.19 points, down 0.93% this week; the Shenzhen Component was at 14,172.63 points, down 2.22%; and the ChiNext Index was at 3,299.3 points, down 2.45%.

What is the Ark?

China’s economy has delivered results beyond market expectations: during the 14th Five-Year Plan, the total economic output surpassed 110 trillion, 120 trillion, 130 trillion, and 140 trillion yuan, achieving four consecutive jumps, with an average annual growth of 5.4%, leading major economies worldwide.

As noted in the 2026 government work report, “We plan for the worst and strive for the best. Not only have we stabilized the macroeconomic landscape and achieved new results in high-quality development, but we have also greatly boosted societal morale and confidence.”

Confidence equals valuation. In 2026, the term “Cool China” became popular, symbolizing a cognitive revolution in the West. China’s efficient infrastructure, cheap water, electricity, and gas, and clean, safe living environments have sparked global discussion.

Strength equals confidence. In fact, China has maintained its position as the world’s second-largest economy and consumer market for years, the largest trading nation, manufacturing powerhouse, and foreign exchange reserve holder. It boasts the world’s most complete and largest industrial system, with robust supporting capabilities; over 170 million highly educated or skilled professionals; and a massive domestic market of over 1.4 billion people, including more than 400 million middle-income earners.

China’s institutional, scale, industrial chain, and talent advantages support each other and work together. By 2025, China will further consolidate its position as the world’s leading manufacturing power, with industrial added value reaching 41.7 trillion yuan and contributing 35% to economic growth. New energy vehicle production and sales have ranked first globally for 11 consecutive years, industrial internet covers all 41 major industrial categories, and progress in smart factories continues.

The more turbulent the world, the more favored are assets with stable fundamentals. China remains the most stable, reliable, and proactive force in a turbulent world—like a rock standing firm amid rising waves of uncertainty. The long-term positive trend of China’s economy remains unchanged, and its institutional and major country advantages continue to be evident. This is the confidence behind the stability of A-shares.

For investors, as Buffett’s lifelong experience shows, major global events do not alter Benjamin Graham’s investment principles or the practice of buying quality assets at reasonable prices.

Buffett once said: “Imagine how much we would pay if we let unknown fears defeat us, delaying or changing capital allocation. In fact, we often find the most advantageous buy and sell points at the peak of panic caused by major events. Panic is the enemy of thrill-seekers but a friend to those who follow market fundamentals.”