Zhang Yu, chief economist at Huachuang Securities, said on July 20 that the direct trigger for the recent A-share adjustment is related to overseas. On the one hand, the US-Iran conflict and the risk of transportation in the Strait of Hormuz have once again heated up since July, and rising oil prices have once again boosted expectations of tightening US inflation and monetary policy, and global liquidity and risk appetite have been suppressed as a result; on the other hand, there has been a concentrated correction in overseas equity assets, especially in the AI and semiconductor sectors. Fluctuations in external markets were rapidly transmitted domestically through sentiment, valuation, and capital transactions, thereby amplifying short-term adjustments. Zhang Yu pointed out that the A-share adjustment is more of a sentiment release and valuation rebalancing under external shocks; it does not mean that domestic fundamentals and long-term industrial trends have reversed. In the short term, there are policy tools to maintain market stability; in the medium term, the midstream manufacturing boom provides profit support; in the long term, technological innovation, economic transformation, and industrial upgrading open up room for growth. External disturbances may change the pace of market operation, but it is difficult to change the general direction of China's manufacturing competitiveness and technological progress.

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