China’s technology sector, led by innovators like DeepSeek, is attracting foreign investors, particularly from South Korea. This surge follows positive government sentiment and reports from major investment banks. South Korean investors are increasingly acquiring Chinese tech stocks, as local markets perform poorly in comparison. Analysts predict the Chinese market could present significant opportunities moving forward.
Chinese technology shares are gaining traction, greatly influencing foreign investment, particularly from South Korea. Breakthrough AI developments by Hangzhou’s DeepSeek have sparked interest in Chinese equities, amidst a downturn in New York’s Nasdaq market for tech shares. This interest signals confidence in China’s commitment to advanced technologies, especially in sectors like AI, electric vehicles, and semiconductors.
Comments from Foreign Minister Wang Yi have strengthened this positive outlook, labeling China as an “anchor of stability” amid global tensions. Investment firms like Goldman Sachs and Morgan Stanley, highlighting technological advancements, have released favorable reports on investing in China’s markets, aligning with the optimistic sentiment expressed by investors.
The trend is evident in South Korea, where investors have actively increased their holdings in Chinese technology stocks. The trading value of these shares surged to a 30-month high of $782 million in February, as reported by the Korea Securities Depository & Clearing Corp. Notably, South Korean trading in Chinese stocks has increased nearly threefold compared to transactions in European and Japanese stocks.
During the period from February 17 to February 28, six of the ten most purchased overseas stocks by South Korean investors were tech-related Chinese equities, particularly in electric vehicles and AI. Xiaomi Corp emerged as the top pick, with a net trading value of $72.4 million, followed by BYD and Alibaba, significant players in the tech sector.
While South Korean investors capitalized on Chinese stocks, their local market remained stagnant, with the Korean Composite Stock Price Index showing minimal growth. In contrast, Chinese indices like Shanghai’s STAR 50 Index surged over 15% and the Hang Seng Tech Index climbed 43%, demonstrating the robust performance of China’s technology sector.
Analyst Edward Cole from Man Group Plc suggests that the Chinese stock market could become one of the most appealing investments by 2025. He notes the low valuation of China’s shares compared to other major markets, which presents foreign investors a significant chance for returns, along with a robust safety margin.
The surge in China’s technology shares is attracting increased foreign investment, particularly from South Korea, as investors seek opportunities in rapidly advancing sectors like AI and electric vehicles. Positive commentary from Chinese officials and investment firms bolsters this trend, showcasing the potential for high returns amid low valuations in the Chinese market compared to its global counterparts. As South Korean investors take interest, this may signify a broader shift in investment focus toward Chinese technology stocks.
Original Source: www.shine.cn
