China’s technology shares are witnessing significant growth, particularly due to advancements in AI by DeepSeek. Foreign investors, particularly from South Korea, are increasingly investing in Chinese tech stocks, with notable trading increases. The favorable perception of China’s market and valuation advantages present an attractive opportunity for investors amidst global uncertainties.
China’s technology shares have experienced remarkable growth this year, significantly influenced by the advancements in artificial intelligence (AI) by DeepSeek in Hangzhou. As the technology sector in New York’s Nasdaq faces a downturn, investors are increasingly drawn to the vibrant opportunities within China’s AI, electric vehicle, and semiconductor industries, underscoring their commitment to innovative technologies.
Recent remarks by China’s Foreign Minister Wang Yi, who characterized China as an “anchor of stability” amid global tensions stemming from U.S. policies, appear to have enhanced foreign investment sentiment. This view seems to resonate with many investors, as reflected in a recent note from Haitong Securities, which highlighted the sector’s expansion driven by DeepSeek’s innovative concepts.
Reports from prominent foreign investment banks, including Goldman Sachs and Morgan Stanley, project an optimistic outlook for investment in Chinese markets, particularly due to its significant technological advancements. South Korean investors exemplify this trend, having boosted their portfolios with Chinese tech stocks, with trading values reaching a 30-month high of USD 782 million in February, as reported by the Korea Securities Depository & Clearing Corp.
Trading activity among South Korean investors in Chinese markets surged nearly threefold since January, surpassing transactions in both European and Japanese shares. Notably, six out of the top ten foreign stocks purchased by South Korean investors in late February belonged to the Chinese tech sector, focusing on electric vehicles, AI, and semiconductors.
The leading stock among these investments was Xiaomi Corp, which has diversified successfully into the electric vehicle market, amassing a net trading value of USD 72.4 million. Following Xiaomi were BYD, another electric vehicle manufacturer, and Alibaba, a significant e-retail player in AI.
While South Korean investors are eager to purchase Chinese equities, the performance of their domestic market has been underwhelming, with the Korean Composite Stock Price Index up by less than 2 percent since February. In contrast, the Shanghai STAR 50 Index, which emphasizes technology companies, experienced over a 15 percent increase, and the Hang Seng Tech Index surged 43 percent, significantly outperforming other benchmarks.
Edward Cole, an analyst at Man Group Plc, asserted that the Chinese stock market presents itself as a compelling investment opportunity for 2025, stating, “Compared with other major markets, the valuation of China’s stock market is still at a low.” He further noted that this valuation disparity provides foreign investors with a robust safety margin and potential for high returns.
The surge in China’s technology shares reflects a strong investor confidence driven by technological breakthroughs, particularly in the realm of AI. The favorable perception of China as a stable investment environment, alongside the notable increase in South Korean investments, reinforces the attractiveness of the Chinese tech market. As traditional markets falter, investors may find promising opportunities in China’s evolving landscape, supporting expectations of robust future growth in this sector.
Original Source: www.shine.cn
