China’s technology shares are attracting foreign interest, particularly from South Korean investors, driven by advancements in AI and optimistic reports from investment banks. As domestic markets lag, Korean investors significantly increase their holdings in Chinese tech stocks, notably Xiaomi and BYD, while Chinese stock indices outperform global counterparts.

China’s technology stocks have gained significant traction, particularly influencing foreign investors. A major catalyst is the innovative strides made by Hangzhou-based DeepSeek in artificial intelligence. While the Nasdaq experiences correction, attention shifts to China’s vibrant sectors such as AI, electric vehicles, and semiconductors, drawing international interest.

Recent comments from Foreign Minister Wang Yi have contributed to a favorable perception of China among investors, portraying the country as a stabilizing force amidst geopolitical tensions. Haitong Securities noted the boom in China’s tech sector and emphasized the investor confidence sparked by governmental support for technological advancements.

Foreign investment banks like Goldman Sachs and Morgan Stanley released promising outlooks for Chinese investment, highlighting significant technological advancements. South Korea exemplifies this trend, as Korean investors have notably increased their investments in Chinese tech stocks, reaching a trading value of US$782 million in February 2023, according to the Korea Securities Depository & Clearing Corp.

Korean transactions in Chinese stocks surged nearly threefold, outpacing investments in European and Japanese shares. From February 17 to February 28, six of the ten most purchased overseas stocks by South Koreans were Chinese tech companies, especially in the electric vehicle and AI sectors. Xiaomi Corp emerged as the top choice, with a net trading value of US$72.4 million.

While South Korean shares stagnate, the Shanghai STAR 50 Index has experienced a robust increase of over 15%, and the Hang Seng Tech Index has soared by 43%. In contrast, the Korean Composite Stock Price Index has only risen less than 2% during this period. Analyst Edward Cole from Man Group Plc has indicated that China’s stock market may soon be the most compelling market of 2025, citing its favorable valuation compared to other major markets, which suggests a promising opportunity for foreign investors.

In summary, China’s technology sector is witnessing a surge in foreign investment interest, particularly from South Korea, driven by breakthroughs in AI and government support. This trend reflects a broader belief in China’s stability amid global uncertainties. With substantial increases in stock performance compared to other markets, investors may find considerable opportunities in Chinese equities moving forward.

Original Source: www.shine.cn

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