In recent years, the Chinese stock market has gone through a complex phase, characterized by volatility, regulatory uncertainties and a changing global economic environment. However, according to Goldman Sachs, this turbulence could hide an important opportunity. Chinese stocks today appear undervalued compared to fundamentals and the recent market correction could represent a strategic entry point for investors with a medium-long term vision.
Why invest in Chinese stocks now
Goldman Sachs recently reiterated that the profitability of Chinese companies and their global revenue sources remain strong, despite the instability that has hit markets in recent months. In an interview, Si Fu, China portfolio strategist at Goldman Sachs, stressed that “the main driver of the market will continue to be earnings growth” and that “investors should buy in times of weakness, because volatility offers an entry opportunity.”
Therefore, despite the perceived fragility of the Chinese market, company data (in terms of profits, liquidity and international presence) do not justify excessive pessimism. Indeed, the growing gap between real economic performance and market valuation could translate into a window of value for those who can look beyond short-term fluctuations.
What the data suggests
In 2025, China is showing signs of macroeconomic stabilization. The latest data indicate a gradual recovery in domestic demand, supported by targeted policies to stimulate consumption and credit. The Beijing government, aware of the risk of prolonged stagnation, has adopted a more flexible approach in fiscal and monetary matters, with interventions aimed at strengthening investor confidence and reviving the domestic stock market.
Added to this is the strategic role of growing sectors, such as green technology, semiconductors, artificial intelligence, electric vehicles and biotechnology. These sectors, which represent the heart of the new Chinese economy, continue to attract capital and generate significant profits, confirming the country’s capacity for innovation.
Ratings and recovery potential
One of the most compelling factors for looking at the Chinese stock market today is the stock market valuation. Chinese indices, including the CSI 300 and the Hang Seng, are at historically low levels relative to expected earnings, with price multiples (P/E) lower than both global standards and the average of the last ten years. For investors with long-term horizons, this means being able to buy solid companies at a discount, with potentially high margins for appreciation once sentiment returns to positive.
Goldman Sachs, in particular, identifies opportunities in sectors more oriented towards exports and global value chains, where profitability remains high and international demand, although slowing, continues to support margins. Technology companies, consumer goods manufacturers and companies related to the energy transition are among the most promising names.
Furthermore, in China, the share of the population investing directly in stocks is still relatively low by Western standards. But it is also true that the spread of online trading platforms, the increase in financial education and the search for alternative returns to the real estate market are rapidly changing savings habits.
In the medium term, therefore, the entry of millions of small investors could increase the liquidity of the stock market, contributing to greater stability and more efficient price formation.
