The Chinese technology sector is experiencing significant growth, attracting foreign investors, particularly from South Korea, who are investing heavily in AI, electric vehicles, and semiconductors. This trend is buoyed by governmental backing and optimistic reports from major investment banks, contrasting with a lackluster performance in the South Korean market.
China’s technology shares are currently thriving, particularly benefiting from advancements in artificial intelligence fostered by companies like Hangzhou-based DeepSeek. As technology markets in New York experience declines, foreign investors are increasingly drawn to China’s dynamic sectors including AI, electric vehicles, and semiconductors, perceiving them as promising investments amidst geopolitical tensions.
Recent remarks by Chinese Foreign Minister Wang Yi, who positioned China as an “anchor of stability,” have bolstered investor confidence further, leading many to view the nation positively. Haitong Securities noted that the tech sector has been booming this year, spurred by innovative companies and governmental support.
International investment banks such as Goldman Sachs and Morgan Stanley have issued favorable reports on Chinese markets, emphasizing the impact of technological advancements. South Korean investors exemplify this trend, significantly increasing their Chinese equities portfolios. They recorded a trading surge, hitting a 30-month high with US$782 million in February, as reported by the Korea Securities Depository & Clearing Corp.
Korean investments in Chinese stock exchanges have surged, with tech stocks leading the charge. Between February 17 and 28, six of the ten most acquired overseas stocks by South Korean investors were Chinese tech shares, including significant players in electric vehicles and AI. Xiaomi Corp notably attracted a net trading value of US$72.4 million, followed closely by BYD and Alibaba.
Alternatively, South Korea’s domestic market has remained subdued, with the Composite Stock Price Index up less than 2 percent since February, contrasting sharply with China’s performance. The Shanghai STAR 50 Index focused on technology has jumped over 15 percent, while the Hang Seng Tech Index soared 43 percent.
According to Edward Cole, an analyst at Man Group Plc, the Chinese stock market is on its path to becoming notably “convincing” by 2025. He observes that the current valuation of China’s market remains comparatively low, presenting foreign investors with substantial safety margins and promising potential returns.
The surge in China’s technology shares underscores a shift in investment trends, driven by advancements in AI and government support. South Korean investors are leading the influx, attracted by promising sectors within China, while their own market shows limited growth. Analysts predict a bright future for Chinese stocks as they offer favorable valuations compared to other major markets, making them an attractive option for foreign investors.
Original Source: www.shine.cn
