--- title: "\"20260513 Morgan Stanley Cycle Sword Conference\": In-depth explanation of current investment strategy analysis for specific important sectors" type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/40725035.md" description: "An in-depth analysis of the core themes of China's macroeconomic trends in 2026, providing the latest investment strategy recommendations for key sectors such as financial bonds, communications (optical communications), non-ferrous metals (lithium, copper, aluminum), and ferrous metals. Key area 1. Finance and the bond market: Interest rate volatility and policy logic Interest rate divergence phenomenon: Despite strong exports and a rebound in inflation, government bond interest rates remain fluctuating at low levels of 1.7%-1.8%. Core reasons: The appreciation of the RMB has led to high enthusiasm for foreign exchange settlement, increasing passively injected liquidity; coupled with the second quarter being the traditional off-season for loan issuance, banks are actively increasing their allocation to bonds..." datetime: "2026-05-13T13:23:33.000Z" locales: - [en](https://longbridge.com/en/topics/40725035.md) - [zh-CN](https://longbridge.com/zh-CN/topics/40725035.md) - [zh-HK](https://longbridge.com/zh-HK/topics/40725035.md) author: "[Ludwig（磕CFA/FRM](https://longbridge.com/en/profiles/16989760.md)" --- # "20260513 Morgan Stanley Cycle Sword Conference": In-depth explanation of current investment strategy analysis for specific important sectors Core Theme In-depth analysis of China's macroeconomic trends in 2026, providing the latest investment strategy recommendations for key sectors including financial bond markets, telecommunications (optical communication), non-ferrous metals (lithium, copper, aluminum), and ferrous metals. Key Areas 1\. Finance & Bond Markets: Interest Rate Volatility and Policy Logic Interest rate divergence phenomenon: Despite strong exports and rebounding inflation, government bond interest rates remain fluctuating at a low level of 1.7%-1.8%. Core reasons: The appreciation of the RMB has led to a surge in enthusiasm for foreign exchange settlement, increasing passively injected liquidity; coupled with the second quarter being a traditional off-season for loan issuance, banks are actively increasing bond allocations. Policy direction: The central bank maintains interest rate stability by absorbing liquidity, no longer emphasizing "interest rate cuts to reduce losses," and instead requires banks to enhance their independent pricing capabilities to prevent excessively low loan pricing. 2\. Telecommunications Industry: The "Golden Cycle" of Optical Communication Zhongtian Technology's analysis: Has repeatedly raised its profit forecasts and target prices, with the core driver being the rise in fiber optic prices. Three pillars of demand: AI data centers: Cloud providers like ByteDance and Alibaba have seen a surge in bidding volume, approaching the scale of operators. Low-altitude economy: Drones are creating explosive demand for fiber optics. Overseas exports: North American companies are directly bypassing intermediaries to sign long-term agreements with leading Chinese fiber optic manufacturers. Supply side: The expansion of optical fiber preform (raw material for fiber optics) production is restrained (about 20%-30%), and industry gross profit margins have soared to 70%-80%. 3\. Non-ferrous Metals: Price Game under Supply Disruptions Lithium (Bullish): The implementation of the new "Regulations on the Collection and Administration of Mining Right Transfer Proceeds" has led to mine shutdowns for license renewal in places like Yichun, causing a continuous decline in supply. Prices within 250,000 yuan/ton are not expected to suppress energy storage demand. Copper (Shortage): Global copper mine supply has not recovered, and domestic crackdowns on "circular trade" and "reverse invoicing" have tightened scrap copper liquidity, posing a risk of declining electrolytic copper production. Aluminum (Premium): Exports are restricted by tariffs. While Chinese inventories are high, global supply (especially in Europe) is extremely tight, and the sense of physical shortage will be transmitted to end-users in the coming months. 4\. Ferrous Metals & Energy Return of ferrous metals: Funds are beginning to flow from high-priced non-ferrous metal sectors to bottomed-out rebar and hot-rolled coils, mainly due to strong manufacturing exports and signs of a bottoming out in the real estate sector. Coal/Power: Affected by El Niño, high summer temperatures in 2026 will push up electricity loads. Power plant restocking demand is the main support for coal prices. 2026 China Macroeconomic Outlook Economic Growth and Structure GDP Outlook: China's real GDP is expected to grow by 4.5%-5.0% in 2026 (median 4.8%), showing a pattern of "low first, high later." Growth Engines: Export resilience (especially with AI hardware and new energy exports growing over 20%) and infrastructure investment are the core driving forces. Corporate Profits: It is expected that Chinese corporate profit growth will reach 14% in 2026, significantly accelerating compared to 2025. Macro Policy Mix Fiscal Policy: The deficit ratio remains at a high level of 4%, with special bonds primarily directed towards new infrastructure and technological breakthroughs. Monetary Policy: There is still room for 10-20 basis points of interest rate cuts and 50 basis points of RRR cuts, with a focus on targeted and precise structural easing. Major Risks and Challenges Domestic Demand Recovery: There is still a gap in household consumption confidence. Although the decline in real estate investment has narrowed, its drag effect on upstream and downstream industries persists. External Environment: Escalating global trade protectionism, US tariff policies, and geopolitical tensions (Middle East situation) continue to disrupt global supply chains and energy costs. 2026 is a year of both "transformation and harvesting." On a macro level, the Chinese economy is moving away from a singular reliance on real estate towards an AI-driven manufacturing upgrade and transformation. On a micro level, core assets with global competitiveness in optical communication, new materials, and energy security will become the main investment theme for navigating through cycles. ### Related Stocks - [600522.CN](https://longbridge.com/en/quote/600522.CN.md) - [09988.HK](https://longbridge.com/en/quote/09988.HK.md) - [BYTED.NA](https://longbridge.com/en/quote/BYTED.NA.md) - [89988.HK](https://longbridge.com/en/quote/89988.HK.md) - [BABA.US](https://longbridge.com/en/quote/BABA.US.md) - [KBAB.US](https://longbridge.com/en/quote/KBAB.US.md) - [BABO.US](https://longbridge.com/en/quote/BABO.US.md) - [BABX.US](https://longbridge.com/en/quote/BABX.US.md) - [HBBD.SG](https://longbridge.com/en/quote/HBBD.SG.md)