Potential fiscal stimulus expected to boost the economy. Foreign investment giants have once again increased their holdings in A-shares.

Fidelity International's George Efstathopoulos successfully caught the significant increase in the Chinese stock market at the end of September and once again increased holdings in the Chinese stock market. The reason is the expectation that fiscal stimulus will boost the economy. The fund management company, based in Singapore, manages around $3 billion in assets. In the recent stock market rebound, he profited from Hong Kong stocks and last week shifted investments to mid-cap stocks listed in the mainland. He is focusing on the SSE 500 Index, which has lagged behind the blue-chip SSE 300 Index this year. Efstathopoulos stated in an interview last week that the Chinese authorities "have the ability and will take necessary measures to ensure decent economic growth domestically." He added that onshore stocks are "less affected by geopolitical issues," and mid-cap stocks should benefit more from stimulus measures. This optimism puts the Fidelity fund manager at odds with some Wall Street strategists, who have become more cautious about the Chinese stock market following Trump's election and disappointing potential fiscal policies. However, Efstathopoulos believes that if the threatened tariffs by the incoming U.S. president become a reality, the Chinese government may have enough policy firepower to deploy. This year, the Chinese stock market has experienced significant volatility, dropping to a five-year low in February and rising by 32% in just six trading days at the end of September due to monetary stimulus measures. For Efstathopoulos, this volatility has been favorable, as he profited from buying during the sharp drop in January. In the summer, he increased his exposure to Chinese stocks in the portfolio to around 4%, but with the surge in the Chinese stock market in September, he reduced his exposure to 1%. With the recent increase in onshore mid-cap stocks, his holdings are now back to around "3-3.5%." Efstathopoulos is responsible for managing Fidelity's Global Multi-Asset Income Fund, which has returned 9.5% over the past year. The company stated that the strategy aims to achieve a yearly return of 7% to 9% throughout the cycle. He has been using derivatives such as contracts for difference to reconfigure Chinese assets, replacing positions in Hang Seng H-Share Index ETF futures. Remaining bullish In a market where bearish views are reemerging, Efstathopoulos' bet on China may seem bold. Since reaching its peak on October 8th, the Chinese stock market has been on a continuous decline. However, for Efstathopoulos, it makes sense to await further clarity on tariff issues before the Chinese government deploys stimulus measures to boost the economy. China's export channels are also diversified compared to the first term of President Trump. He stated: "You want to see what the potential damage might be so that you can bridge the gap. If fiscal stimulus measures drive domestic consumption, the SSE 500 Index could be the biggest winner."