The China onshore rally (stocks listed in mainland China) is gaining momentum. The Shanghai Composite Index recently climbed to a 10-year high.

In this PERSPECTIVES Viewpoint Equity – China: Riding on supportive policies and tech optimism, we examine the recent outperformance of China’s onshore equities (A-shares) relative to offshore equities (H-shares), explore the key drivers behind the A-share rally, and assess its sustainability.

Key takeaways:

  • China A-shares (onshore market) are catching up with H-shares (offshore market) that rallied following the DeepSeek event in early 2025.

  • The recent outperformance of A-shares reflects domestic sentiment and policy shifts. Fiscal expansion, adequate liquidity, anti-involution policies, improved global sentiment and rising domestic retail flows are the key drivers.

  • We suggest buying on dips to ride the China tech and policy wave, while also enhancing portfolio diversification with exposures to both China A and China H markets. 

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