Chinese technology shares are booming, driven by AI advancements from DeepSeek and a positive perception of China’s market stability. South Korean investors significantly increased their holdings in Chinese tech stocks, while their domestic market lagged. Analysts predict that China’s stock market could emerge as a leading investment opportunity by 2025.
China’s technology shares are experiencing remarkable growth, particularly influenced by advancements in artificial intelligence by companies like DeepSeek. With the U.S. Nasdaq market facing a downturn, international investors are increasingly attracted to the Chinese sectors focusing on emerging technologies such as AI, electric vehicles, and semiconductors.
The recent portrayal of China as an “anchor of stability” by Foreign Minister Wang Yi likely bolstered foreign interest in its markets amidst global tensions. This perspective seems to resonate with many investors, contributing to a vibrant tech stock sector that has thrived since the start of the year, according to Haitong Securities.
Prominent investment banks, including Goldman Sachs and Morgan Stanley, have released optimistic evaluations regarding investments in China’s markets, citing significant technological advancements. Observations from South Korea exemplify this trend, as investors have considerably increased their holdings of Chinese technology shares, reaching a trading value of US$782 million in February.
The trading volume of South Korean investors in Chinese markets surged nearly threefold from January, surpassing transactions made in European and Japanese equities. Notably, six out of the top ten overseas stocks acquired by South Koreans were Chinese tech companies, specifically in sectors like electric vehicles, AI, and semiconductors, with Xiaomi Corp leading the charge.
While South Korean investors actively accumulated Chinese shares, their domestic market lagged, with the Korean Composite Stock Price Index experiencing a mere 2 percent increase since February. In contrast, China’s STAR 50 Index and the Hang Seng Tech Index have gained over 15 percent and 43 percent, respectively, showcasing their robust performance.
Edward Cole, an analyst at Man Group Plc, emphasized the appealing valuation of the Chinese stock market, indicating that it is on track to become the most compelling market by 2025. He noted that the low valuation in comparison to other major markets provides foreign investors with a significant safety margin and potential returns.
China’s technology sector demonstrates substantial promise, attracting increased foreign investments, particularly from South Korean investors. With significant gains in indices related to technology and a favorable investment climate, analysts predict that China’s market could become notably attractive in the coming years. This trend highlights an evolving perception of China’s technological advancement and stability in contrast to struggling markets elsewhere.
Original Source: www.shine.cn
