China's Stock Market Split: Company Morgan Stanley and Company JPMorgan Asset Management Back Exporters Riding the AI Infrastructure Wave

China's equity market is undergoing a clear bifurcation driven by the global rollout of artificial intelligence infrastructure on one side and a still-fragile domestic consumption recovery on the other. Investors are increasingly favoring industrial, materials, and technology names that benefit from cross-border demand, while retailers and consumer-facing companies continue to lag amid lingering property-sector weakness.

At the center of this shift are export-oriented manufacturers and tech firms that are directly exposed to the global push to build AI data centers, power grids, and factory automation. Company China XD Electric has surged this year as demand for ultra-high-voltage grid equipment has climbed, and Company TBEA is likewise benefiting from strong orders for electrical components. These winners are being singled out by large asset managers: Company Morgan Stanley and Company JPMorgan Asset Management are among the major institutions that have tilted portfolios toward industrials and technology, deliberately underweighting consumer and retail exposure.

Voices from the sell-side and buy-side reinforce the same message. Mr. William Bratton of Company BNP Paribas Exane summed it up: "There are clearly two very different Chinas at the moment." That perspective is echoed in analyst calls and portfolio shifts by firms who point to observable earnings upgrades in export-heavy indices. Company UBS's Mr. Min Lan Tan highlighted the structural nature of the growth, arguing that industrial outperformance should continue as countries race to scale AI infrastructure and advanced manufacturing capacity.

Concrete stock moves underline this trend. Company China XD Electric is up roughly 75% year-to-date, while Company TBEA has advanced about 28%. Company Morgan Stanley's buy lists include construction and heavy-equipment names such as Company Sany Heavy Industry, Company Jiangsu Hengli Hydraulic, Company Han's Laser, and Company Wuxi Lead Intelligent—companies that stand to benefit from both domestic recovery cycles and robust export demand.

By contrast, consumer-linked names show minimal earnings revisions and weaker share-price performance. Company Fuyao Glass Industry and Company Great Wall Motor illustrate the point, with declines this year as property-sector stress continues to weigh on household spending and vehicle sales. The CSI 300 Industrials Index has seen a roughly 10% increase in earnings expectations over the past six months, while the consumer index recorded only about a 5% upgrade, a divergence that explains a lot of investor behavior.

Portfolio managers are not blind to the risks. Export-oriented winners could face setbacks if trade frictions increase or buyers impose restrictions on imports of low-cost Chinese goods. Still, current policy signals from Beijing—favoring advanced manufacturing and technology—support the rotation into exporters and industrials. Mr. Chaoping Zhu of Company JPMorgan Asset Management noted that large investors are increasingly focused on the "going global" earnings story rather than waiting for a broad-based domestic recovery.

What this means for investors: tactical and strategic allocations are likely to favor industrials and technology exposure tied to AI-capex and infrastructure. Opportunistic investors may also monitor beaten-down consumer names for value plays if and when policy or macro data shows a tangible pickup in household consumption. In the near term, watch for earnings revisions, export order books, and policy statements from Beijing to continue driving market differentiation between the export winners and domestic-facing laggards.