Surge in Chinese Technology Shares Attracts Foreign Investment, Especially from South Korea
China’s technology sector is thriving, driven by breakthroughs in AI from DeepSeek and increased foreign interest, especially from South Korea. Investment banks express optimism for Chinese equities, while domestic market performance lags behind. Major tech stocks like Xiaomi and BYD attract South Korean investors, illustrating the sector’s robust appeal amidst geopolitical uncertainties.
China’s technology shares are currently experiencing a notable surge, driven largely by advancements in artificial intelligence from Hangzhou’s DeepSeek. This positive development is attracting renewed foreign interest in Chinese equities, especially in sectors such as AI, electric vehicles, and semiconductors, as the Nasdaq faces correction. Foreign Minister Wang Yi’s recent remarks, positioning China as an “anchor of stability” amidst global tensions, have further bolstered investor sentiment.
The confidence in China’s tech sector has been reinforced by reports from investment firms like Haitong Securities, highlighting the increase in investments and government support for technology. Notably, foreign investment banks, including Goldman Sachs and Morgan Stanley, have issued optimistic evaluations regarding investment opportunities in the Chinese market.
South Korea serves as a key example of the increasing foreign interest in Chinese technology stocks. In February, investments in Chinese shares surged, achieving a trading value of US$782 million, the highest in 30 months. South Korean investors emphasized tech-related stocks, with transactions in China soaring nearly threefold compared to those in European and Japanese markets.
During the period from February 17 to February 28, six out of the ten most purchased overseas stocks by South Korean investors were Chinese technology equities, including prominent firms in electric vehicles and AI. Xiaomi Corp emerged as the most favored stock, accruing a trading value of US$72.4 million, followed by companies like BYD and Alibaba.
While South Korean investors have been actively engaging with Chinese shares, the domestic market remains relatively stagnant, with the Korean Composite Stock Price Index rising less than 2 percent since February. Conversely, Shanghai’s STAR 50 Index saw over a 15 percent increase, while the Hang Seng Tech Index soared by 43 percent, indicating considerable growth in the Chinese tech sector.
Edward Cole, an analyst at Man Group Plc, asserts that the Chinese stock market is on course to become the most compelling market by 2025, noting its low valuation compared to competing markets. This disparity presents foreign investors with significant safety margins and opportunities for potential returns.
In summary, China’s technology shares are witnessing a significant uptrend, fueled by advancements in AI and strong foreign investment interest, particularly from South Korea. With optimism from major investment banks and a remarkable performance in relevant stock indices, China’s market demonstrates considerable growth potential, making it an attractive option for international investors. The ongoing developments signify a promising trajectory for the Chinese tech sector moving forward.
Original Source: www.shine.cn
