Since the beginning of July, the A-share market has experienced a noticeable round of volatile adjustments, leading to a rise in market apprehension.

In my view, the factors currently causing fluctuations in the A-share market, whether it's the weakening of the global technology sector or the digestion of valuations in previously hot investment themes, are essentially short-term variables. The fundamental factors that determine the long-term trajectory of the stock market have not undergone a directional change.

First, the "Stability" and "Resilience" of the Macro Economy Fortify the Foundation for the Capital Market's Steady Operation.

The "mid-year report" for the Chinese economy, released on July 15th, shows that the gross domestic product for the first half of the year reached 69.6 trillion yuan, a year-on-year increase of 4.7%.

More noteworthy is the "optimization" of the economic structure. In the first half, new growth drivers represented by high-end manufacturing, the digital economy, and modern services contributed over 40% to economic growth. The trend towards a newer and better-quality economy is very distinct, and the overall developmental momentum continues to accelerate. For instance, the added value of high-tech manufacturing grew by 13.3% year-on-year, with sectors related to artificial intelligence, such as integrated circuit manufacturing and intelligent vehicle equipment manufacturing, maintaining growth rates above 30%. The macro-economic trend of "stable progress and structural optimization" lays a solid foundation for the long-term positive development of the capital market.

Second, the Hard Strength of Listed Companies' Profitability is the "Anchor" Influencing the Capital Market's Long-Term Direction.

As the most active "microscopic cells" of the Chinese economy, the profitability of listed companies directly affects the overall market's "quality." In the first half of the year, despite ongoing challenges in the macro environment, many leading enterprises have reaped significant "rewards" from their sustained deep cultivation in technological R&D and market expansion.

Data shows that as of July 17th, a total of 1,722 A-share companies have released their performance forecasts for the 2026 interim period. Sorting by the lower limit of the expected year-on-year growth rate in net profit, 937 companies anticipate varying degrees of growth in net profit attributable to shareholders. Among these, 463 companies expect their net profit to grow by more than 100%. In terms of sectors, AI computing power, robotics, and innovative drugs are leading in growth rates, presenting distinct structural highlights. The high growth expectations of listed companies in these sectors for first-half performance stem from the substantive pull of downstream demand and the entry of industrial cycles into an upward phase. Simultaneously, new economic drivers, represented by new quality productive forces, are gradually becoming a crucial pillar supporting the performance growth of listed companies.

Third, the Sustained Inflow of Incremental Funds is the Most Plentiful Source of Vitality for the Capital Market.

During the market adjustment, capital has not receded. According to calculations, in the week from July 13th to July 17th, equity ETFs collectively saw a net inflow of 2036.41 billion yuan. Extending the timeframe, since the beginning of July (up to the 17th), the total net inflow into equity ETFs has exceeded 3200 billion yuan, indicating a clear trend of capital entering the market.

At the same time, several major foreign institutional investors have recently frequently expressed optimism about Chinese stocks, believing valuations are attractive and accelerating their pace of market entry. Regulatory data indicates that as of the end of May, various types of overseas investors held A-share tradable market capitalization exceeding 4 trillion yuan, having become significant participants in the Chinese capital market. As of July 12th, since the beginning of the year, over 570 foreign institutions have conducted nearly 3,900 research visits to A-share companies, with integrated circuits, electronic equipment, and instruments being key areas of focus.

The shared optimism from both domestic and foreign capital is also accumulating a continuous stream of energy for the market's development. As long as this vitality maintains its liquidity and sustainability, the resilience of the Chinese capital market will continue to strengthen, and the long-term positive trend will become increasingly solid.

Short-term volatility is a normal state of the market, whereas long-term resilience is the inherent quality of Chinese assets. The core factors supporting the medium-to-long-term positive outlook for the market have not fundamentally changed. Short-term storms are inevitable, but long-term investment returns ultimately depend on the deep-seated resilience of the Chinese economy and the continuous creation of value increments by high-quality enterprises.