Australian investors are increasingly focusing on China’s equity markets following the conclusion of the week-long Lunar New Year celebrations. This renewed interest is bolstered by a favourable US Supreme Court ruling that has led to a reduction in tariffs affecting Chinese exporters. Fund managers see this as an opportunity to tap into the potential of China’s onshore share market, especially as the nation seeks to decouple its economy from the largest global market.
On March 7, 2026, China’s mainland equity markets, including the Shanghai Composite Index, opened with gains exceeding 1 percent. This upward momentum mirrored the performance of the Hang Seng China Enterprises Index, which is designed to track major mainland companies listed in Hong Kong. Tech giants such as Alibaba, Tencent, and Meituan were instrumental in driving the index higher, with gains of more than 2 percent.
The Supreme Court’s decision deemed certain tariffs imposed by former President Donald Trump on major economies, including China, as illegal. As a result, analysts at Morgan Stanley estimate that the average tariffs on goods imported from China will decrease from 32 percent to 24 percent. Armina Rosenberg, a fund manager at Minotaur Capital, noted that this ruling represents a significant shift for Chinese markets, which previously faced tariffs as high as 50 percent on some goods.
“China has now transitioned from one of the highest tariff environments to a more favourable global rate of 15 percent,” said Rosenberg. This shift is expected to provide a modest tailwind for Chinese share markets as they recover from the recent downturn.
While the Shanghai stock market recorded only a 1.5 percent increase so far this year, Joseph Lai, chief investment officer at Ox Capital Management, highlighted the recent pullback in Chinese stocks as an opportune moment for investment. Despite a 20 percent decline in exports to the US last year, overall exports from China increased by 5.5 percent, demonstrating the country’s resilience and diversification efforts.
“China has diversified its economy, improved monetary policies, and significantly reduced its dependence on the US for trade,” Lai explained. He emphasised that now is an ideal time to identify quality stocks at attractive prices, naming Ping An, a leading insurance company, as a prime investment target. With a current share price reflecting a 10 percent drop this year, Lai believes Ping An’s valuation of seven times earnings is appealing, given its growth potential.
The technology sector, particularly in artificial intelligence (AI), has also piqued the interest of investors. Following President Xi Jinping‘s endorsement of AI, analysts have noted significant advancements in the field over the past 18 months. DeepSeek, an AI start-up that has generated considerable excitement, is expected to release a next-generation model that could further invigorate China’s tech landscape.
John Stavliotis, a portfolio manager with Antipodes, highlighted the underrepresentation of Chinese tech in global portfolios, suggesting a substantial investment opportunity in this sector. He identified Tencent and Alibaba as key players in the Chinese AI landscape.
Nicholas Yeo, head of China equities at Aberdeen Investments, expressed optimism about several companies, including semiconductor equipment manufacturer Naura, and AI chip designers Cambricon Technologies and Montage Technologies. He also pointed to Yantai China Pet Foods as a strong investment choice, despite a nearly 8 percent drop in its stock price this year.
Minotaur’s Rosenberg mentioned her interest in Xiaomi, which has recently expanded into the electric vehicle market, and WH Group, the world’s largest pork processor. “WH Group’s US division has transitioned from losses to profitability, while falling hog prices in China have positively impacted processing margins,” she noted.
Investors are also eyeing smaller-cap companies, with Trevor Gurwich from American Century Investments highlighting GDS Holdings, a Chinese data centre operator, and Atour Lifestyle, recognized as one of the fastest-growing hotel chains in the country.
Mike Harut from Munro Partners has backed CATL, a prominent player in battery technology. As global demand for electric vehicles continues to rise, CATL stands to benefit significantly.
As Chinese stocks gain traction, investors are poised to explore a range of opportunities across various sectors, from technology to consumer goods, marking a pivotal moment in the nation’s economic landscape.
