This article discusses the resurgence of interest in Chinese technology shares among foreign investors, particularly those from South Korea, driven by advancements in AI and government support. Key stocks include Xiaomi, BYD, and Alibaba, with a substantial increase in trading activity noted. Analysts suggest that the low valuations of Chinese equities present a strong opportunity for foreign investment, predicting continued growth in the sector.
China’s technology shares are currently attracting significant foreign investment, particularly from South Korean investors. This surge is primarily attributed to advancements in artificial intelligence developed by DeepSeek, which has rekindled interest in Chinese equities viewed as promising due to the nation’s commitment to innovative technologies.
As the Nasdaq market in New York experiences a downturn, investors are increasingly drawn to the potential of China’s sectors such as artificial intelligence, electric vehicles, and semiconductors. Recent comments by Foreign Minister Wang Yi, who characterized China as an “anchor of stability” amidst global geopolitical tensions, have further enhanced its investment appeal.
Haitong Securities notes that the Chinese tech sector has thrived this year, initially spurred by new innovations from DeepSeek. The firm indicated that there is growing investor confidence boosted by the government’s focus on technological progress. Foreign investment banks, including Goldman Sachs and Morgan Stanley, have also released positive reports on opportunities within the Chinese market due to these technological advancements.
The trend of increased investment can be vividly observed in South Korea, where investors have elevated their purchases of Chinese shares, particularly within the tech domain. The trading volume surged to a 30-month high of $782 million in February, showing a stark rise in engagement with China’s markets compared to European and Japanese equities.
Notably, six of the top ten foreign stocks acquired by South Korean investors from mid to late February were tech-related Chinese firms such as Xiaomi, BYD, and Alibaba. Xiaomi stood out with a net trading value of $72.4 million, demonstrating its successful diversification into electric vehicles alongside its consumer electronics business.
In contrast to the quiet performance of the Korean Composite Stock Price Index, which increased less than 2 percent since February, China’s STAR 50 Index rose by over 15 percent, and the Hang Seng Tech Index saw a remarkable 43 percent increase, outpacing other global indices. Edward Cole, an analyst from Man Group Plc, remarked that the Chinese stock market’s current evaluation positions it for substantial growth and presents foreign investors with a promising opportunity.
Cole pointed out that China’s stock market valuations remain relatively low compared to other major markets, creating a favorable environment for foreign investors seeking safety and potential high returns.
In summary, China’s technology sector is witnessing a revitalization driven by foreign interest, particularly from South Korean investors drawn to the prospects of artificial intelligence, electric vehicles, and semiconductors. Enhanced government focus on these sectors, coupled with positive sentiments from leading investment banks, has significantly boosted confidence. As South Korean investors pivot towards Chinese equities amidst a lackluster home market, the performance disparity underscores the potential of China’s tech sector, with analysts predicting further growth in the coming years.
Original Source: www.shine.cn
