HSBC Asset Management highlights a significant divergence in performance between Chinese onshore and offshore equity markets in 2026, with emerging market equities showing resilience overall [1]. The MSCI China Index, which consists of approximately 80% offshore stocks primarily listed in Hong Kong and the US, is down 7% year-to-date in local currency terms [1]. In contrast, the China A Index, representing 100% onshore stocks, has risen by 10% over the same period [1]. HSBC attributes this outperformance to the China A Index's sector composition, which is more heavily weighted toward technology, industrials, and materials—sectors that are closely linked to the 'hard tech' layers of AI supply chains [1]. Offshore tech stocks, which are more concentrated in e-commerce and internet platforms, have not performed as well this year [1].
HSBC notes that the onshore market's reduced sensitivity to external shocks has provided a buffer against global headwinds, further supporting its resilience [1]. The report also points to several factors that could bolster sentiment toward Chinese assets moving forward, including ongoing policy support from mainland authorities, a diversified energy supply, and the potential for an extended US–China truce [1]. Additionally, a firmer renminbi is cited as a possible catalyst for increased global investor interest in Chinese assets [1].
CONCLUSION
HSBC Asset Management observes that Chinese onshore equities have outperformed offshore counterparts in 2026, driven by strong gains in AI-linked sectors and favorable policy conditions. The outlook remains positive, with policy support and a strengthening renminbi expected to further enhance investor sentiment. Market participants may continue to favor onshore exposure given its resilience and sector advantages.