Geopolitical conflicts disrupt Asia-Pacific markets; institutions: A-shares' "safe haven" attribute is expected to gradually become more prominent

On March 30, the Nikkei 225 and the South Korean KOSPI both fell by more than 2%, and A-shares became a bright spot in the Asia-Pacific market.

In the morning, A-share major indexes opened lower across the board. Near the midday close, the Shanghai Composite Index rallied back into positive territory. By the close, the Shanghai Composite Index rose 0.24%, the Shenzhen Component Index fell 0.25%, the ChiNext Index and the STAR Market Composite Index decreased by 0.68% and 0.18%, respectively, and total market trading value for the whole day was 1.93 trillion yuan.

Data released by the National Bureau of Statistics show that in January to February, industrial enterprise profits accumulated to 1,024.56 billion yuan, up 15.2% year over year, the highest level in the past four months; operating revenue was 2.08 trillion yuan, up 5.3% year over year, reaching a new high since 2023.

Guotai Junan Securities believes that under the “new normal” of geopolitical conflicts, China’s stronger energy security advantages, a complete industrial system and supply-chain resilience, and the improvement of its stable-market mechanisms with Chinese characteristics—among other factors—have made stability the underlying tone of China’s economy and stock market. This means the Chinese market may have a lower risk assessment. In addition, the risk-dispersion value brought by the low correlation between China’s assets themselves and global assets may gradually make its “safe-haven” attribute more apparent.

On the one hand, from the perspective of energy structure, China’s primary energy consumption is mainly coal, and its self-sufficiency rate has remained above 90% for a long time. Oil and natural gas account for less than 30%, which is significantly lower than the global average. On the other hand, with diversified and dispersed sources of crude oil imports, and leading global scale in new energy power installations, China’s energy system has important adjustment flexibility to external shocks.

“Middle East developments highlight the strategic value of China’s ‘coal + new energy’ dual-pillar energy system, which is expected to support A-shares in outperforming globally.” Citic Securities Huaxing said.

Zhang Yu, Chief Economist at Huachuang Securities, said that since 2025, midstream manufacturing has experienced three-layer shocks—tariffs, higher costs driven by rising non-ferrous metal prices, and higher oil prices—but its gross margin has remained stable. Although the impact of the recent oil price increases still needs to be observed, given that non-ferrous metals have a larger weight on the cost side, she believes factors such as China’s electricity prices being affected relatively less by oil prices mean that this round of high oil prices stemming from supply shocks may bring more energy investment and boost midstream demand, and the midstream gross margin may be even more resilient.

Against the backdrop of continuously escalating geopolitical risks, global efforts to advance cutting-edge technologies such as AI and robots have not slowed down.

Guotai Junan Securities believes that in 2026, global AI computing-capacity capital expenditures will have already seen substantial and large-scale continuous upward revisions compared with 2025. In the near term, the incremental rate of capital expenditure growth has slowed, and replacing higher prices for capital expenditure has become the primary driver for the sector. Against the background of an explosive global AI boom, in multiple links of the industry chain, demand and supply remain out of balance, and short-term sector adjustments do not change its long-term favorable trend.

With external uncertainty ongoing, multiple domestic advantages with certainty have become even more prominent. “On the policy front, in the opening year of the ‘15th Five-Year Plan and beyond’ reform measures are being implemented steadily, and policy support is safeguarding the stable and healthy development of the capital market. The resonance between residents moving their wealth and long-term capital entering the market provides certainty for improvements in the supply of long- and mid-term capital,” Galaxy Securities said. The certainty of China’s manufacturing advantage is especially prominent. Leveraging a complete industrial-chain system and continuously upgraded competitive advantages, it has built an endogenous foundation to deal with external fluctuations.

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