高盛-中国宏观洞察中东石油冲击下的十点思考 10 reflections so far on the Mideast oil shock

PortfolioStrategyResearch29March2026|10:36PMHKT

CHINAMUSINGS

10refiectionssofarontheMideastoilshock

ThewarwithIranisnowamonthold,spotBrentoilpricehassurged+50%inthe

pastmonthtoUS$110/bblattimeofthiswriting,thegrowthandinfiationtrade-o仟hasworsenedgloballyperlatestGSmacroforecastrevisions,andChinesestocks

havecorrected4-6%alongsidetheirDMandEMequitypeerssincethewarstartedonFebruary28.InthisChinaMusings,wetakestockofthedevelopmentsinthe

MiddleEast,summarizeourkeymarketthoughtsandobservations,andaddressinvestorFAQsregardingChineseequitiesasthelargestoildisruptioninhistorycontinuestounfold.

1.Chinalooksbetterplacedthanmostinthisoilshock

2.ModeratelylowerfairvalueforChineseequities

3.Adebatablerefiationstoryforthestockmarket

4.China’senergypolicyispayingdividends

5.AIhaschangedthe(geopolitical)game

6.Plan“A”stillworks

7.Earningsandcashreturnsshineatuncertaintimes

8.IsMiddleEasterncapitalcomingtoHK?

9.Aspeedbump,notadetourofChina’s“GoingGlobal”journey

10.Oilhasstolenthethunderfromthe“Claw”

KingerLau,CFA

+

852-2978-1224|kinger.lau@

GoldmanSachs(Asia)L.L.C.

TimothyMoe,CFA

+

65-6889-1199|timothy.moe@

GoldmanSachs(Singapore)Pte

SiFu,Ph.D.

+

852-2978-0200|si.fu@

GoldmanSachs(Asia)L.L.C.

KevinWang,CFA

+

852-2978-2446|kevin.wang@

GoldmanSachs(Asia)L.L.C.

Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.ForRegACcertificationandotherimportantdisclosures,seetheDisclosureAppendix,orgoto

/research/hedge.html

.

GoldmanSachsChinaMusings

29March20262

1.Chinalooksbetterplacedthanmostinthisoilshock

TheChineseeconomyappearsbetterpositionedamidtheoilsupplyshockthanitsglobalpeers,owingtoits:a)strategicenergydiversificatione仟orts,withcrudeoilandLNGaccountingfor28%ofChina’sprimaryenergyconsumptionin2024,oneofthe

lowestintheworld.Onthefiip-side,alternative/renewableenergy,notablynuclear,

wind,solar,andhydro,nowrepresents40%ofChina’selectricitygeneration,upfrom

26%adecadeago;b)risingoilreserves,encompassingstrategicandcommercial

stockpiles,arecloseto1.2bnbarrelsbasedonofficialstatistics,sufficientfor+110daysofoilconsumptionassumingtheentirecrudeimportsfalltozero;and,c)continued

accesstooilandgassupplyfromenergyproducingnationsoutsideoftheMiddleEastregion,Russia,Australia,andMalaysiainparticular.Duetotheoilshock,our

economistshavetrimmedChina’srealGDPgrowthforecastby20bps,comparedto40bpsfortheUS,and70bpsfortheEMAsiaex-Chinaeconomicbloc.

Exhibit1:China’senergyandpowerrelianceonoilandgasismuchlowerthanitsglobalpeers

Percent

80

70

60

50

40

30

20

10

Percent

80

70

Shareinprimaryenergyconsumptionin2024

Naturalgas

Petrolandotherliquids

60

50

40

30

20

10

00USEUJapanTaiwanKoreaASEANWorldIndiaChina

Source:EIA,GoldmanSachsGlobalInvestmentResearch

Russia

Malaysia

Brazil

Indonesia

Australia

Angola

US

Turkmenistan

Mongolia

Congo

SaudiArabia

Iraq

UAE

Oman

Qatar

Kuwait

Iran

18%

16%

14%

12%

10%

8%

6%

4%

2%

0%

Exhibit3:China’senergyimportsarefairlydiversifiedgeographically

Chinaenergyimportsbycountry(as%oftotal)

20252017

Non-MiddleEastMiddleEast

^Note:EnergyimportsfromIranaremuchlowerinChinaofficialcustomdataasmediareportedthattheyarenowmostlyrebrandedasimportsfromMalaysia,SaudiorOmansinceUStightenedrestrictionsin2019

Source:CEIC,Customsdata,GoldmanSachsGlobalInvestmentResearch

Exhibit2:Alternativeandrenewableenergysourcesmakeupfor40%ofChina’selectricitygeneration

Others

Wind

Solar

Hydro

Nuclear

Coal

Oil

Natural

gas

Chinaelectricitygenerationmixbysource

100%

90%

80%26%Renewables(incl.Nuclear)40%70%

60%

50%

40%

30%

20%

10%2%Oil&Natualgas3%

0%

20142015201620172018201920202021202220232024

Source:EIA,GoldmanSachsGlobalInvestmentResearch

Exhibit4:Oureconomistshavetrimmed2026ChinarealGDPgrowthby20bpsbecauseoftheoilshock,oneofthelowestintheregion

%

0.0

Philippines

Thailand

India

Singapore

HongKong

Malaysia

Australia

Indonesia

Japan

Taiwan

China

Korea

AsiaEx-Japan

GSForecast:Changesto2026ERealGDP

GrowthsinceJan

-0.4-0.8-1.2-1.6

-2.0

Source:GoldmanSachsGlobalInvestmentResearch

29March20263

2.ModeratelylowerfairvalueforChineseequities

WhilethedirectimpactsofhigherforlongerenergypricesarelikelymoremanageablefortheChineseeconomy,thespillovereffects/concernsaboutglobalstagfiation,

morestickyUSratesandastrongerDollar,andsustainedgeopoliticalriskpremiacouldhurtChinaequitiesviatheearnings,valuation,andmoneyfiowschannels.

IncorporatingGSlatestmacroforecastchangesinthepastmonthtoourtop-down

marketframeworks,weestimatethattheincrementallylessfriendlyglobalbackdrop

couldreduceChinaequity’sfairvaluebyabout5%,attributableto2ppearningshitand3-4%fairPEreduction.Hence,wehaveloweredourindextargetforMSCIChinaandCSI300by5%and4%,nowimplying24%and12%12mpricereturnsrespectively.A

full-blownglobalrecessionand/orstagfiationscenarioisadmittedlynotfullypricedinyet,butwestayOverweightA-andH-sharesintheAPxJcontextgiventheirfavorablerisk/rewardprofiles,andwe’drecommendinvestorstobuildstrategicexposuresatcurrentpricesbarringthematerializationofleft-tailevents.

Exhibit5:Alessequityfriendlyglobalbackdropcould

moderatelyreducetheequilibriumvalueofChinaequity

Source:MSCI,FactSet,GoldmanSachsGlobalInvestmentResearch

Exhibit6:OurVARimpulseshockanalysissuggestsa6%cumulativeearningsimpactfromtheoilpricechangessincethestartoftheMiddleEastconfiict

Thailand

Australia

Indonesia

Taiwan

Singapore

Korea

China

HongKong

Malaysia

India

Philippines

MXAPJ

Impacton2026Eearningsbyoilpriceshock

Positivesectors(US$30/bbl+US$15/bblshock)

Negative/othersectors(US$30/bbl+US$15/bblshock)Netimpactonmarket(AdditionalUS$15/bblshock)

Netimpactonmarket(Overall)

6%

4%

2%

0%

(2%)

(4%)

(6%)

(8%)(10%)

(12%)

Note:EstimatesbasedonregionalVARmodel'ssensitivitytoimpactedMXAPJsectors

Source:GoldmanSachsGlobalInvestmentResearch

Exhibit7:WeremainoverweightmostNorthAsianmarkets,butreduceIndiatoMWandPhilippinestoUW

Source:GoldmanSachsGlobalInvestmentResearch

29March20264

3.Adebatablerefiationstoryforthestockmarket

Oureconomists’mostupdatedinfiationprojectionssuggestthatChinacouldendits

41-monthPPIdefiationasearlyasinMarchprimarilybecauseofsurgingglobal

energyprices,6to9monthsearlierthantheirpriorforecast.Whileinvestorsare

generallyskepticalaboutthepositiveimpactsofcost-pushinfiationonthestock

market,risingPPIhashistoricallybeenassociatedwithrobustcorporateprofitsand

decentequityreturns,evenduringperiodswheninfiationarypressuresweremostly

instigatedbyhigherinputcosts(e.g.2011,2017/18,and2021).Infact,Chinese

nominalGDPgrowthhasbeenrevisedupby0.8pp(perGSestimates)sincetheIranwarstarted,arguablyamoderatetailwindforcompanies’revenuegrowthandupstreamsectors’profitability.Thiscouldalsohelpalterthedisinfiationarycorporatebehavior

andconsumermindset,withlowerrealinterestratelikelysupportiveofcorporatecapexandassetreallocationfiowsfromcash/savingstotheequitymarket,everythingelse

beingequal.

Exhibit8:ChinacouldcomeoutofthedisfiationarycycleasearlyasinMarchduetosurgingenergyprices

Pre-IranWar

LatestForecasts

ChinaPPIinflation(%yoy)

16

16

Actual

12

12

8

8

4

4

0

0

-4

-4

-8

-8

070809101112131415161718192021222324252627

Source:CEIC,GoldmanSachsGlobalInvestmentResearch

Exhibit10:HigherPPIistypicallypositivelyassociatedwithcorporateprofitandequityreturns

Energy

ConsStap

Materials

Banks

Industrials

Aggregate

Financials

CommSvcs

Utilities

ConsDisc

Insurance

RealEstate

HealthCare

IT

0%

PPIcorrelationwithGICSsectorreturn&earnings

60%

Note:ReturnbasedonmonthlydataforMXCN

50%

40%

sectorsandearningsbasedonannualdataforallChinalisteduniverse;bothoverpast20years

30%

PPIxreturn

20%

10%

PPIxearnings

-10%-20%

-30%

Source:MSCI,Wind,FactSet,GoldmanSachsGlobalInvestmentResearch

Exhibit9:NominalGDPgrowthistightlylinkedwithcorporaterevenuegrowth

(yoy)

(yoy)

30

25

20

15

10

5

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

revenueyoygrowth

ChinanominalGDP&listedcompanies

30

NominalGDP

25

Alllistedcompaniesrevenue

20

15

10

5

0

-5

0

-5

Note:revenueandearningsasof9M25(Q3)asFY25reportingseasonisstillinprogressandwilllastuntilend-Apr

Source:GoldmanSachsGlobalInvestmentResearch

Exhibit11:RealratesarealsowellcorrelatedwithequityvaluationsinChina

mneacrangeoreayeean

MXCNCSI300Note:monthlydatasinceJan2005excludedperiodsduringGFC/COVIDwhenP/Ewasdistorted;realyieldiscalculatedby10YCGBnominalyield

-1/2x(CPIyoy+PPIyoy)

<-2%-2--1%-1-0%0-rren1t-2%2-3%>3%

RangeofCGB10Yrealyield

16

14

12

10

8

12fP/Eihflild(Mdi)

Source:Wind,FactSet,GoldmanSachsGlobalInvestmentResearch

GoldmanSachsChinaMusings

29March20265

4.China’senergypolicyispayingdividends

Chinaistheworld’slargestimporterofoilandLNGbyvolumebutalsoisthelargestinvestorinalternativeenergy,spanningpowergenerationsourcesandtechnology,

energyinfrastructure(VLCC,powertransmission,equipment,andstorage),andmodernpetrochemicalfacilities.ThedisruptionsintheStraitofHormuz,throughwhich

20%/25%ofcrudeoil/LNGandmanycriticalinputstotheagriculturaland

manufacturingsupplychainsaretransportedgloballyinnormaltimes,haveelevated

energyindependence,supplychainresiliency,andsocialstabilitytothenationalsecuritylevel.ThiswillmostlikelyintensifyChina’scommitmentandsupporttoitsalternative

energypolicyorientation,potentiallycreatingnewrevenueandprofitpools

domesticallyandabroadforrelevantChinesecompanies.Inthisvein,wereiterateourstrategicoptimismonourChinaSelectAIPortfolioandourChina15thFYP

PortfoliowhereselectproxiesfromtheAIpowerandalternativeenergyvaluechainsareheavilyfeatured.

Exhibit12:SecurityandEnergywereheavilyfeaturedinthe15thFYP

Source:DatacompiledbyGoldmanSachsGlobalInvestmentResearch

Exhibit14:ThePowercohortintheChineseAIsupplychainhascontinuedtotradewellsincethe“DeepSeekmoment”

Source:FactSet,GoldmanSachsGlobalInvestmentResearch

Exhibit13:Chinesemanufacturersholddominant

positionsintheglobalsupplychaininvariousconsumer,industrialandcommoditysectors

Chinaas%ofglobalsupplyinkeysectors

190%86%80%74%68%

57%55%54%

33%28%

37%36%

30%

20%

10%

0%

Source:Companydata,Reuters,GoldmanSachsGlobalInvestmentResearch

Exhibit15:Investorscouldgainexposurestothe

new/alternativevaluechaininourAISelectPortfolioandthe15thFYPPortfolio

2024

180%

160%

SelectAI

Jan-24

Mar-24

May-24

Jul-24

Sep-24

Nov-24

Jan-25

Mar-25

May-25

Jul-25

Sep-25

Nov-25

Jan-26

Mar-26

Note:Solidlinesrepresentperformanceafter

thematicportfolioinception,dottedlinesrepresentperformancebeforeinception.Totalreturnsappliedduringcalculation.

Prominent10Inception

15FYP

GoingGlobalLeaders

ShareholdersReturn

PerformanceofTopChinaThemessince

144%

113%

79%

64%

47%

140%

120%

100%

80%

60%

40%

20%

0%

-20%

Source:FactSet,GoldmanSachsGlobalInvestmentResearch

GoldmanSachsChinaMusings

29March20266

5.AIhaschangedthe(geopolitical)game

TheIranwar,andtoalesserextenttheUS’soperationinVenezuela,arewidelyregardedbymilitaryexpertsandgeopoliticalcommentatorsasthenewtemplateofmilitary

confiictsinthemodernera.TheyshowcasetheascentandimportanceoftechnologyandAIinnationaldefenseandwarfarestrategy,notablytheadoptionofAI-poweredintelligenceanalysis,precisiontargeting,andautonomousweaponsystemssuchas

dronesandunmannedvessels.Notonlyhasthewarpromptedsovereignnationstolifttheirdefensespending,butithasalsopivotedtheirfocusonAIinvestmenttobeefup

theirdefensecapabilityandcapacity,inourview.ThishasfurthercementedourstrongbeliefthatAIwillremainadominantthemeintheChineseequityuniverse,especiallyinareaswhereChinaisenjoyingcomparativeandcompetitiveadvantagesoveritsglobalpeers,thePower,Infra,andPhysicalAIcohortsinparticular,andthosethatare

relatedtonationalsecurity,namelythesemisupplychainandLLMs.

Exhibit16:TechnologyandAIarewidelyusedintheongoingIranwar

Source:WashingtonPost,EuroNews

Exhibit17:Risingdefensebudgetsgloballycould

increasinglygravitatetowardsAI/technologyinvestments

1970

1973

1976

1979

1982

1985

1988

1991

1994

1997

2000

2003

2006

2009

2012

2015

2018

2021

2024

MilitaryExpenditure

ChinaEUMiddleEastUS

(US$bn)

2000

1800

1600

1400

1200

1000

800

600

400

200

0

(as%ofGDP)

997(3.4%)

201

(5.1%)

369

(1.9%)

314(1.7%)

Source:WorldBank,GoldmanSachsGlobalInvestmentResearch

Exhibit18:ChinaisakeyplayerintheglobalAI

value-addedchain,notablyPower,Infra,andPhysicalAI

45%47%

17%

45%38%

8%

49%94%

26%

4%

10%25%

44%

75%29%

27%

16%

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

ChinaUS

Others

GlobalAIrevenueshare

AI+includesAIadopterssuchasMedia&Entertainment,E-commerce,AIplatform&Software,BusinessServices,etc.PleaserefertoAIchangesthegame(Part2)formoredetails

Source:FactSet,MSCI,GoldmanSachsGlobalInvestmentResearch

29March20267

6.Plan“A”stillworks

WhileChinesestockshavecorrectedalongsideglobalequitiessincetheoutbreakofthewar,theirdiversificationbenefits,especiallythosefromAshares,areonfulldisplaysofarinthisoilshock.CSI300andMSCIChinahavefallen4%and7%sinceFeb28(3%and8%ytd),largelyinlinewithMSCIallcountryworldindexandbutmodestlybetter

thanex-Chinaemergingmarkets.Importantly,AandHshareshavemeaningfully

outperformedtheirpeersonavolatility-adjustedbasis,achievingaSharperatioof-0.7and-0.6inthepastmonthandexhibitinga52wrollingreturncorrelationwithSPXof0.2and0.3respectively.Thedemandforidiosyncrasyand“lowvol”shouldriseas

growthandgeopoliticalrisksrise,addingtotheinvestmentappealofAshareswhereforeigninvestorownershipmerelystandsat3%,equityvaluationsseeminexpensive

versusdomesticrates,andthepolicyputunderwrittenbythegovernment(e.g.the

NationalTeam)remainsvalid,inourview.Allthesehelpreinforceour“slowbull”thesisforChinaA,whichcontinuestoo仟erstrongalphaopportunitiestoinvestorsacross

mandatesandstrategies.

Exhibit19:Chineseequitieshavebeenmoreresilientsofarinthisoilshock

MSCIindexreturns

40%

30%

20%

10%

0%

YTDSinceIranWarReturnsinUSD

AsofMar27,2026

-10%-20%

-30%

Source:FactSet,MSCI,GoldmanSachsGlobalInvestmentResearch

Exhibit21:ThelowFINIownershipintheonshoreequitymarketaddstotheidiosyncrasyofAshares

50

Taiwan

Korea

Japan

Thailand

China

(onshore+

offshore)*

Philippines

India

China

onshore

46Equityforeignownership(%)

33

40

29

30

30

18

17

15

20

3

10

0

*calculatedassumofonshoreforeignownerhsipandoffshorefree-floatcap,dividedbysumofonshoreandoffshoremarketcap.AsofDec31,2025

Source:LocalStockExchanges,Wind,GoldmanSachsGlobalInvestmentResearch

Exhibit20:ChinaAshareshaveoutperformedtheirEMcomparablesonarisk-adjustedbasisinthepastmonth

ReturnsinceFeb28

S&P500

Europe

India

EMexChina

Japan

Korea

0%

-2%

-4%

Lowervolatility,higherreturn

CSI300(1.2%,-4%)

MSCIChinaNASDAQ

(1.6%,-7%)

Taiwan

-6%

-8%

-10%-12%-14%-16%-18%

-20%

0.5%1.5%2.5%3.5%4.5%5.5%

DailyreturnvolatilitysinceFeb28

Source:FactSet,GoldmanSachsGlobalInvestmentResearch

Exhibit22:OurETFfiowtrackerindicatesthatthe

“NationalTeam”hasturnedintoabuyerinpastweeksaftersellingdownitsequityexposuresearlierthisyear

Jan-23

Apr-23

Jul-23

Oct-23

Jan-24

Apr-24

Jul-24

Oct-24

Jan-25

Apr-25

Jul-25

Oct-25

Jan-26

Apr-26

NTbuyingsignal:Netsubscriptionoftop5NTholdingsETFs(as%oftotal)>2s.d.Cumulativeflowstotop5NTholdingChinaA-shareETFs(RMBbn)

CSI300index-RHS

700

600

500

400

300

200

100

0

5000

4800

4600

4400

4200

4000

3800

3600

3400

3200

3000

Source:Wind,GoldmanSachsGlobalInvestmentResearch

29March20268

7.Earningsandcashreturnsshineatuncertaintimes

Besidesthe(upstream)energysector,whichhasunderstandablybenefitedfromthe

tightoilsupply,theotheroutperformingthemesandfactorsinthischallengingbeta

environmenthavebeen(high)cash/dividendreturns,andtoalesserextent,earningsdelivery.ThisstylisticdivideispartlysupportedbythecontinuedfocusbyChinese

corporatestoraiseROE/cashreturnsforshareholders,theimprovingEPSrevision

momentuminAshares,andourexpectationthatprofitgrowthacrosstheA-and

H-shareuniversecouldreachlow-teenlevelsin2026,underpinnedbyAI,“Going

Global”,andChina’santi-involutionpolicybias,withthelastdriverprobablyalready

manifestinginthefooddelivery,logistics,andautossectors.AsChinesecompaniesarescheduledtoreporttheirFY25and1Q16financialsinthecomingweeks,webelieve

sectors/stocksthataremorelikelytobeatconsensusexpectationand/orsurprisethemarketontheupsideontheirshareholderreturnspolicycouldgeneratealphaforinvestors,especiallyagainstthosethataremorepronetomissinthisreporting

season.

Energy

Banks

Utilities

Financials

Industrials

CommSvcs

ConsDisc

ConsStap

InfoTech

HealthCare

RealEstate

DivFins

Insurance

Materials

ChinaStylePerformance(%)sinceFeb-end

Value(CheapvsExpensive)

Dividend(HighvsLow)

Earningsrelease(BeatvsMiss)

BalanceSheet(StrongvsWeak)

ROE(HighvsLow)

GARP(HighvsLow)

DividendGrowth(HighvsLow)

EPSRevision(HighvsLow)

Momentum(HighvsLow)

Growth(HighvsLow)

-5%0%5%10%

Exhibit23:Dividendsgrowthandearningssurpriseshavegeneratedalphainthepastmonth

MSCIChinaSectorPerformance(LOC,%)sinceFeb-end

10%

5%

0%

-5%

-10%-15%-20%

-25%

Source:FactSet,MSCI,GoldmanSachsGlobalInvestmentResearch

Exhibit24:AnimprovingconsensusearningsrevisiontrendforAshares

Sep-24

Dec-24

Mar-25

Jun-25

Sep-25

Dec-25

102

2025/26EIndexEarningsRevision

CSI30026E

25E

MSCIChina26E

25E

101

96

92

90

100

98

96

94

92

90

Source:FactSet,CSI,MSCI,GoldmanSachsGlobalInvestmentResearch

Exhibit25:WethinkTechHWandMaterialsaremore

likelytosurprisemarkettotheupsidewhileStaplescouldmissinthisreportingseason

Source:FactSet,IBES,CSI,MSCI,NBS,GoldmanSachsGlobalInvestmentResearch

8.IsMiddleEasterncapitalcomingtoHK?

ThisisaFAQbymarketwatchers,whoarekeentounderstandthecapitalfiow

implicationstotheAsiafinancialhubifgeopoliticalconcernsstayelevatedintheMiddleEast.Wethinkit’stooearlytotellasstrategicinvestmentdecisionsusuallytakemore

than1monthtoconclude,butsomesignssuggestthatinternationalmoneymay

haverecentlyfiowedtoHongKongwhereHIBORhasallento7-monthlows,HKEx

turnoverhasstrengtheneddespitesteadySouthboundtradingrepresentationposttheIranwar,andthelocalhousingmarketisstagingurtherrecovery,ledbythehigh-end

segment.WecontinuetoenvisageaconduciveliquiditybackdroporHK-listed

stocksin2026,anchoredbythelikelyDollarweakeningtrendoverthemediumterm,anactiveIPOcalendar,strongSouthboundfiows(GSeor2026:US$200bn),and

still-conservativepositioningbyoreigninvestorsinChinesestocks.But,prolonged

economicdisruptionsinthatregioncouldimpedetheinvestmentcapacityandappetitetowardsChineseassetsbyMiddleEasterninvestors,whohavebeenkeycapitalsponsorsinboththeprivateandpublicequitydomainsinrecentyears.

Exhibit26:InterbankinterestratesinHKhavedroppedtorecent-yearlows

Exhibit27:CashturnoveratHKExhasrisendespitemoderatingSouthboundtradingrepresentation

GoldmanSachsChinaMusings

29March202610

9.Aspeedbump,notadetourofChina’s“GoingGlobal”journey

Therisingglobalgrowthrisk,andthesupplychain/logisticsdisruptionshavecastdoubtontheresiliencyofChineseexports,whichrose22%inthefirst2monthsof2026,

accountedfor16%ofglobalsharein2025,andhavebeenabrightspotofmacrogrowthinrecentyears.WeremainconstructiveaboutChinesecompanies’potentialof

expandingoverseasandgainingmarketshareglobally,considering:a)China’sstrongmanufacturingcapabilityandsupply-chaindiversity,especiallyforproductsandcriticalminerals(e.grareearths)thataredifficulttosubstituteinthenearfuture;b)a

competitivecurrency(theRmbhasweakenedby15%inreale仟ectivetermssince2021);c)diversificationofexportmarkets,notablyEMswheretradepolicytowardsChinastayslargelyaccommodative;d)Chinaisnotonlyexportingtradablegoods,butincreasinglysellingservices,withthelicensingouttrendbybiotech/pharmafirms,risingtoken

exports,andthegrowinginboundtourismbeingtheprimeexamples;e)continuing

outboundFDIsbyChinesecompanies,and,f)still-favorablebasee仟ect:listedChinesecompaniesgenerated16%oftheirrevenuesfromoverseasmarketsin2024,vs.25%forS&P500constituents.

Exhibit30:ChineseexportssurgedinJanuary-February,ledbydevelopingeconomiesglobally

ChineseexportstotheUS/EU/Japan/ASEAN/LatAm/Africawerearound14.7%/14.4%/

4.3%/16.4%/7.7%/5.0%oftotalexports.Overalltheyaccountedfor63%ofChineseexports.

Source:ChinaCustoms,GoldmanSachsGlobalInvestmentResearch

Exhibit32:ChinesecurrencylooksverycompetitiveonaREERbasis

USDCNYvsCNYGSDEER

USDCNY(reversed)GSDEER[RHS]Moreovervaluedvs

GSDEER

MoreundervaluedvsGSDEER

2014201620182020202220242026

15%

10%

5%

0%

-5%

-10%-15%-20%-25%-30%

-35%

6.0

6.2

6.4

6.6

6.8

7.0

7.2

7.4

Source:GoldmanSachsGlobalInvestmentResearch

Exhibit31:TransportationcostshaverisenacrosstheboardasthedisruptionsintheMiddleEastcontinue

(Rebasedto

100)

1-Oct

15-Oct

29-Oct

12-Nov

26-Nov

10-Dec

24-Dec

7-Jan

21-Jan

4-Feb

18-Feb

4-Mar

18-Mar

800

700

600

VLCC(MiddleEasttoChina)ProducttankerBulkerContainer

Airfreight

Shippingcostpriceindex

+369%

500

400

+201%

+53%

+16%

+5%

300

200

100

0

Source:Clarksons,TAC,GoldmanSachsGlobalInvestmentResearch

Exhibit33:China’soverseasrevenueexposureisstillbelowmajorDMandEMcountries

Germany

France

UK

Japan

Australia

US

Taiwan

Korea

India

China

80%

70%

60%

50%

40%

30%

20%

10%

Note:MSCIACWorlduniverseapplied.

71%68%

51%

20%

74%65%

49%

39%

25%

OverseasRevenueShareofKeyMarkets

16%

0%

Source:FactSet,MSCI,GoldmanSachsGlobalInvestmentResearch

GoldmanSachsChinaMusings

29March202611

10.Oilhasstolenthethunderfromthe“Claw”

TheMiddleEastconfiicthasarguablymaskedanotherAIdevelopmentmilestonein

China—theriseofagenticAI.Ifthe“DeepSeekmoment”wasagamechangerwhich

provedthatChinaiscapable