This article explores how the shifting market landscape in China may offer new opportunities for your portfolio in 2026. For investors short on time and looking for quick, actionable ideas, here’s a quick summary of key themes and opportunities:

• Opportunity 1: Focus on growth and profitability  – The government is encouraging companies to move away from "profitless growth" by reducing excessive competition in sectors like solar and batteries.

  • How to trade it: (ASX:IZZ) or (ASX:CETF).
    
    

• Opportunity 2: The next tech wave – China is now a global leader in robotics and "open-source" AI, offering a high-growth alternative to heavily concentrated US tech markets.

  • How to trade it: (ASX:DRGN) or (HKG:3067).
    
    

• Opportunity 3: Growing dividends – Large companies are returning more cash to shareholders through dividends and buybacks, similar to the blue-chip stocks often found in Australian portfolios.

  • How to trade it: (HKG:3110).

Overview: Why China is back on the radar

As we enter the Lunar New Year, the Chinese stock market is stepping into the "Year of the Fire Horse." Following a strong 2025 where a key Chinese benchmark index (MSCI China) jumped approximately 30% – outperforming the US S&P 500 and the Australian market  – investor sentiment has shifted significantly.

For Australian investors, the narrative in China is no longer just about a quick recovery. Instead, the market offers sustainable growth opportunities as it moves into a healthier and more disciplined phase.

Key Takeaways

• Prioritising profitability: Beijing’s new "anti-involution" policy is urging companies to stop aggressive price-cutting and focus on strengthening their profit margins.

• AI and robotics leadership: China has moved incredibly fast in developing AI  with an “open-source” and humanoid robotics, and the companies building these technologies there can be accessed at a lower valuation than many US tech giants.

• Rising shareholder returns: More companies are sharing their profits through dividends and share buybacks. This makes them look more like the stable "Blue Chip" stocks many Australians already own.

• Accessible market entries: These trends can be easily accessed via ETFs on the ASX, US, or Hong Kong markets through the Selfwealth platform - we’ve suggested several options to consider at the bottom of this article.

Theme 1: The move toward profit

In recent years, many Chinese businesses were trapped in a "race to the bottom." They overproduced goods and cut prices just to stay alive, which eroded the profits for everyone in the industry.

Going into 2026, the government has been intervening through "anti-involution" reforms. This policy aims to end price wars by reducing excess supply and encouraging businesses to focus on being financially sustainable.

• What this means for Australian investors: As these big companies move toward healthier competition, they have the potential to become more stable long-term investments.

• How to invest: You can track the companies leading this shift through broad funds like (ASX: IZZ) or the VanEck FTSE China A50 (ASX: CETF).

Theme 2: The next generation of tech – AI and robotics

China is competing with the US on AI by embracing an "open source" model  which speeds up development by sharing the underlying code. This strategy has made Chinese tech firms a major force in the global AI race, powering roughly 30% of open-source AI usage worldwide.

• The shift: Investment is moving beyond traditional internet shopping sites and into "hard tech" companies that build physical products like advanced robots.

• The numbers: China’s human-like (humanoid) robotics market is projected to reach US$77 billion by 2030.

• The opportunity: Many investors feel US tech stocks have become too expensive. China’s tech sector offers similar structural growth but often at a much lower entry price.

• How to Invest: Look toward (ASX: DRGN) or (HKG: 3067) to invest directly in this robotics and tech theme.

Theme 3: The rise of dividends

The most understated trend of 2026 is that companies are paying out more of their excess cash to investors.

As these companies mature, they are moving from aggressive expansion to protecting their position and rewarding their shareholders. Even tech giant Baidu (NASDAQ:BIDU) started paying a dividend (a cash reward for owning the stock) for the first time in early 2026.

• The opportunity: Australian investors who seek regular income from their shares now have an alternative to the ASX. This allows you to earn income from a different part of the world while diversifying your holdings.

• How to Invest: focuses on companies that are increasingly adopting these shareholder-friendly cash payments.

How to access the Chinese market from Selfwealth

On the ASX

• (ASX:IZZ): The 50 largest, most established companies listed in Hong Kong.

• (ASX:CNEW): Higher-growth sectors like healthcare and "new economy" technology.

• (ASX:DRGN): Companies leading the way in robotics, semiconductors, and AI.

On the US and Hong Kong markets

• (NYSE:KWEB): Major Chinese internet and online shopping platforms.

• (NASDAQ:MCHI): A broad fund covering almost the entire Chinese equity market.

• (HKG:3067): The top 30 technology innovators listed in Hong Kong.

The bottom line

The "Fire Horse" in the Chinese zodiac is expected to bring a lot of energy – and volatility. Investors should harness these developing themes in Chinese equities to build a diverse portfolio, which reduces concentration risks while staying invested in some of the most exciting themes of our age.