Goldman Sachs is maintaining a constructive view on Chinese equities, citing “more fundamental upside” ahead, but cautions that the recent rally may soon lose momentum.

In a note published Wednesday, the investment bank said it expects the bull market to slow in the near term, with profit-taking pressures likely to emerge as U.S.-China policy and geopolitical risks return to the forefront in the coming weeks.

While the firm sees scope for continued gains supported by improving fundamentals, the note highlights the importance of navigating renewed macro and political uncertainty as investors reassess risk sentiment across the region.

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China’s equity markets have rebounded sharply from multi-year lows hit in 2024, buoyed by improving economic data, policy easing measures, and renewed interest from foreign investors.