China’s technology sector is booming, driven by AI advancements and foreign interest, particularly from South Korea. As stock markets worldwide struggle, South Korean investors have significantly increased their investments in Chinese tech stocks, while investment firms demonstrate confidence in China’s market potential. The Shanghai and Hang Seng indices show remarkable gains, prompting analysts to forecast a robust future for Chinese equities.
China’s technology sector is experiencing significant growth, driven largely by advancements in artificial intelligence from companies like DeepSeek. As the Nasdaq in New York falls into correction, foreign investors are increasingly attracted to promising Chinese industries, particularly in AI, electric vehicles, and semiconductors. Recent affirmations from Chinese officials, such as Foreign Minister Wang Yi, portraying the nation as a stabilizing force amidst global tensions, seem to bolster investor confidence in these sectors.
According to Haitong Securities, “China’s tech share sector has been booming since the start of this year, beginning with the rise of new concepts fostered by star company DeepSeek.” Foreign investment banks, including Goldman Sachs and Morgan Stanley, have also released favorable reports endorsing investments in Chinese markets, particularly due to significant technological breakthroughs.
South Korean investors are notably responding to these trends by increasing their holdings in Chinese tech shares, as evidenced by a trading value surge to US$782 million in February—the highest in 30 months. Trading activity among South Korean investors surged nearly threefold in January, surpassing transactions in European and Japanese equities. Notably, six out of the ten highest overseas stocks bought by South Korean investors in late February were Chinese tech equities related to electric vehicles, AI, and semiconductors.
Among the most purchased stocks, Xiaomi Corp leads with a net trading value of US$72.4 million, followed by electric vehicle manufacturer BYD and the renowned e-retailer Alibaba. Throughout this acquisition period, South Korea’s own market showed minimal growth, with the Korean Composite Stock Price Index increasing by less than 2 percent since February, contrasting sharply with the performance of Shanghai’s STAR 50 Index, which has risen over 15 percent and the Hang Seng Tech Index, which has surged 43 percent.
Edward Cole, an analyst at Man Group Plc, noted, “the Chinese stock market is well on its way to becoming the most ‘convincing’ market of 2025.” He added that the lower valuations compared to other major markets present foreign investors with a significant safety margin and potential for high returns.
The Chinese technology market is thriving, attracting foreign interest, particularly from South Korean investors who have dramatically increased their investments in Chinese tech shares. With emerging advancements in sectors such as AI, electric vehicles, and semiconductors, coupled with favorable sentiments from government officials and investment banks, the outlook for China’s technology sector remains promising. Notably, the stark contrast between the performance of South Korean equities and thriving Chinese indices highlights the shifting landscape of investment preferences.
Original Source: www.shine.cn
