Expansionary Fiscal Policy Intensifies, Chinese Economic Outlook Improves, CSI 1000 ETF Capitalizes on Mid-Cap Allocation Opportunities

On the morning of March 19, the three major A-share indices all declined, with the Shanghai Composite down 1.02%. As of 11:17, the CSI 1000 ETF (159845.SZ) fell 1.47%. Among other broad-based indices, the SSE 50 dropped 1.23%, the CSI 300 declined 1.03%, and the CSI 500 decreased 1.80%.

In terms of individual stocks, among the top 50 weightings in the CSI 1000 index, the top gainers were Yuanjie Technology up 8.55%, Siwei Tuxin up 6.56%, Yinzhijie up 3.18%, and Huicheng Environmental Protection up 2.01%. However, Daoshi Technology and Demingli performed poorly, with declines of 7.70% and 6.49%, respectively.

Looking at industry performance, among the major sectors heavily weighted in the CSI 1000, electronics fell 1.53%, power equipment declined 0.89%, pharmaceuticals and biology dropped 1.22%, computers decreased 0.80%, and machinery equipment fell 1.81%.

In terms of capital flow, the CSI 1000 ETF (159845.SZ) saw a net inflow of 379 million yuan over the past five trading days, but a net outflow of 1.104 billion yuan over the past ten days. Its latest scale reached 8.918 billion yuan, a decrease of 5.119 billion yuan in the past month. Today’s intraday trading volume was 1.202 billion yuan, with an average daily trading volume of 1.816 billion yuan over the past week, indicating good liquidity.

The Ministry of Finance stated that in 2026, it will continue to implement more proactive fiscal policies, focusing on seven key areas: supporting the development of a strong domestic market; supporting the cultivation and expansion of new growth drivers; accelerating high-level technological self-reliance; increasing efforts to ensure and improve people’s livelihoods; promoting new urbanization and regional coordinated development; accelerating the green transformation; and strengthening scientific fiscal management.

Guotai Haitong Securities on March 18 noted that China’s economy is showing a clear recovery in high-frequency indicators. Over the past week, the Citibank U.S. Economic Surprise Index declined, possibly due to the escalation of U.S.-Iran conflicts and rising oil prices in the Middle East increasing inflation expectations; the European Economic Surprise Index dropped sharply, possibly impacted by NATO’s potential involvement in U.S.-Iran conflicts, rising oil and gas prices in the Middle East, and reversal of monetary policy expectations; meanwhile, Citibank’s China Economic Surprise Index significantly improved, possibly supported by relatively stable geopolitical conditions, the fermentation of policy expectations from the Two Sessions, and negotiations between China and the U.S. trade teams in Paris.

The CSI 1000 ETF (159845) closely tracks the CSI 1000 index. The CSI 1000 index consists of 1,000 stocks with smaller market capitalization and good liquidity, after excluding the constituent stocks of the CSI 800 index from all A-shares. It comprehensively reflects the stock price performance of a group of small-cap companies in China’s A-share market, with its off-market connect funds (Class A: 013922; Class C: 013923).