Surge in Foreign Investment in China’s Technology Sector

China’s technology sector is witnessing significant foreign investment, particularly from South Korea, fueled by advancements in AI and government backing. As other markets lag, Chinese stocks are increasingly seen as prime investment opportunities. Major foreign institutions have expressed optimism about the long-term potential of Chinese equities. Analysts foresee strong future performance for China’s stock market.

The sharp rise in China’s technology shares is attracting substantial foreign investment, particularly from South Korea. The advances in artificial intelligence by DeepSeek, based in Hangzhou, have bolstered foreign interest in Chinese equities, seen as promising due to China’s focus on technological innovations.

Amid a downturn on New York’s Nasdaq, which fell into correction territory, many investors are gravitating toward Chinese sectors like artificial intelligence, electric vehicles, and semiconductors. Comments from Foreign Minister Wang Yi positioning China as a stable economic anchor amid global tensions have further fueled this sentiment.

Haitong Securities remarked on the significant growth within China’s tech sector, with investor confidence rising due to the government’s dedication to advancing technology. Major foreign banks like Goldman Sachs and Morgan Stanley have also produced positive analyses focusing on Chinese market investments due to notable technological advancements.

The trend of increasing investment is evident in South Korea, where investors have heightened their holdings in Chinese tech stocks, as trading values reached a 30-month peak of $782 million in February. Transactions made by South Korean investors in China’s stock exchanges have risen dramatically, far surpassing trading volumes in Europe and Japan.

Particularly notable are the top purchases among South Korean investors: Xiaomi Corp, BYD, and Alibaba, all leading players in the tech space. These investments are occurring in the context of a subdued performance in the South Korean market, with the Composite Stock Price Index rising less than 2% since February, contrasted with robust growth in China’s indices.

Edward Cole from Man Group Plc commented on the promising outlook for China’s stock market, suggesting it could be the most compelling market by 2025 due to favorable valuations when compared to other major economies. The low valuation offers a significant safety margin for foreign investors seeking potential returns.

China’s technology sector is experiencing a notable surge in foreign investment, particularly from South Korean investors. This growth is driven by advancements in artificial intelligence, electric vehicles, and governmental support for technological innovation. Despite a lackluster performance in the South Korean market, investments in Chinese equities are increasingly viewed as a strong and stable opportunity. Analysts predict a bright future for the Chinese stock market, positioning it favorably for foreign stakeholders.

Original Source: www.shine.cn