Market Update: China’s ‘smart economy’ push spurs hunt for new stock winners – Full Analysis

Published Mon, Mar 9, 2026 · 09:08 AM

INVESTORS are growing more upbeat about China’s push to build a “smart economy”, with artificial intelligence (AI), semiconductors and a range of frontier technology sectors emerging as beneficiaries of the policy drive.

The latest signals from Beijing’s political gathering have reinforced the view that tech self-reliance and industrial upgrading will anchor economic growth in the years to come. Analysts at Citigroup and Morgan Stanley say they are favouring tech and innovation sectors, expecting further policy support to follow.

China’s new economic blueprint signals a shift in AI strategy from a phase centred on technological breakthroughs towards commercialisation. For equity investors, that would widen the pool of beneficiaries beyond the earlier favourites such as chipmakers to sectors including humanoid robots, brain-computer interfaces, biomanufacturing and future energy.

Policymakers’ “focus on hard core tech and innovation stands out”, Morgan Stanley strategists, including Laura Wang, wrote in a note. “Upcoming future industries are also clearly laid out for growth and development transition” they said, citing a focus on quantum tech, embodied intelligence, brain-machine interface and 6G.

Shares of AI chipmakers, as well as quantum computing and brain computer-related stocks, jumped after the government report’s release. A gauge of humanoid robot stocks rose 1.4 per cent on Thursday (Mar 5), snapping an eight-day losing streak, and extended gains on Friday.

More broadly, Chinese markets have held up better than their Asian peers amid the global sell-off caused by the war in Iran.

Smart economy

In a sign of the tech sector’s rising importance to the economy, “artificial intelligence” was mentioned seven times in Premier Li Qiang’s report to the National People’s Congress, up from three a year earlier. Beijing also set a target of increasing the value added of core digital economy industries to 12.5 per cent of gross domestic product by 2030, from 10.5 per cent last year.

“We will create new forms of smart economy,” Li said on Thursday. That phrase, along with references to “satellite Internet”, “future energy” and “new types of energy storage” has sent investors on a hunt for fresh stock winners.

To some onshore market watchers, the first-time inclusion of “smart economy” in the work report signals more than a short-term boost for related stocks.

AI is likely to move into a broader commercial rollout, creating opportunities in infrastructure such as chips, computing power and cloud services, as well as in applications such as robotics and intelligent driving, China International Capital analysts, including Li Qiusuo, wrote in a note.

Beyond the well-known technology winners, analysts at China Galaxy Securities and GF Securities see fresh opportunities emerging in energy, after Beijing elevated “future energy” to the top of its emerging-industry agenda.

That shift “underscores the strategic importance of energy technologies in the new round of industrial competition” analysts, including Zhang Jun at China Galaxy, wrote. Priority areas include hydrogen, advanced energy storage and controllable nuclear fusion, they added.

Stocks related to wind, nuclear and pumped hydro power climbed after the government unveiled a plan to expand capacity in those sectors by 2030.

Concrete measures

Some investors remain cautious, viewing the latest policy plan as largely repackaging themes promoted in recent years and saying they want to see a more detailed roadmap.

“The continued focus on tech and innovation is in line with market expectations and while staying the course is commendable, nothing new in terms of direction or specific support was announced,” said Vey-Sern Ling, managing director at Union Bancaire Privee.

Still, renewed pursuit for beneficiaries may inject fresh energy to Chinese stocks, which have lost momentum since February. The tech-focused Star 50 Index is down 9.1 per cent since a January high, while the onshore benchmark CSI 300 has been rangebound.

Citigroup expects that more concrete measures to support new growth drivers could emerge in 2026. Beyond sectors such as aerospace, biomedicine, and quantum technology, the bank is also positive about healthcare.

“Technology and healthcare feature within key work tasks, placed as high priorities that we think will get policy support in 2026,” analysts, including Pierre Lau, said, describing the government’s agenda as “more than old wine in a new bottle”. BLOOMBERG