China’s technology sector is attracting foreign investors, particularly from South Korea, following advances in AI by DeepSeek. The market has shown remarkable growth, with trading in Chinese tech stocks hitting a 30-month high. Analysts express optimism for China’s investment landscape due to low valuations and potential returns, positioning it as a key market for future investment.
China’s technology sector is witnessing significant growth, largely sparked by advancements in artificial intelligence from the company DeepSeek, based in Hangzhou. This uptick has attracted foreign investors who are keen to capitalize on China’s dedication to advanced technologies.
As technology shares in New York’s Nasdaq plummet into correction territory, investors are increasingly drawn to promising Chinese industries such as AI, electric vehicles, and semiconductors. The recent perception of China as a stabilizing force, reinforced by Foreign Minister Wang Yi’s remarks, has further solidified foreign interest in Chinese equities.
According to Haitong Securities, the flourishing of China’s tech sector began earlier this year, fueled by innovative concepts introduced by DeepSeek, which have significantly enhanced investor confidence as a result of government support for technology growth.
Foreign investment institutions, including Goldman Sachs and Morgan Stanley, have provided positive assessments of investing in China’s markets, attributing their optimism to recent technological breakthroughs. The trends are particularly evident among South Korean investors, who have notably increased their holdings in Chinese tech stocks.
In February, South Korean trading in Chinese shares reached a 30-month high at US$782 million, mostly in the tech sector, as per the Korea Securities Depository & Clearing Corp. The volume of transactions nearly tripled from the previous month, surpassing investments in European and Japanese equities.
From February 17 to February 28, six of the ten most popular foreign stocks purchased by South Korean investors were related to China’s technology sector, particularly in electric vehicles and AI, with Xiaomi Corp leading with a net trading value of US$72.4 million.
In contrast, while South Korean investors showed enthusiasm for Chinese markets, their domestic market, indicated by the Korean Composite Stock Price Index, performed modestly, rising less than 2 percent since February. Comparatively, Shanghai’s STAR 50 Index surged over 15 percent, and the Hang Seng Tech Index soared by 43 percent, significantly outperforming other benchmarks.
Edward Cole from Man Group Plc noted that China’s stock market is progressively positioning itself as a compelling investment opportunity by 2025. He emphasized that the current low valuation of the Chinese market presents foreign investors with a favorable safety margin and prospects for high returns.
In summary, the burgeoning technology sector in China is drawing substantial interest from foreign investors, particularly from South Korea, as evidenced by rising trading volumes in technology stocks. The alignment of technological advancements with favorable governmental support has increased investor confidence, contrasting sharply with the more stagnant performance of South Korean equities. As forecasts remain optimistic regarding China’s market potential, investors are recognizing the significant investment opportunities available in this sector.
Original Source: www.shine.cn
