China’s Technology Shares Attract South Korean Investors Amid Market Shifts

China’s technology shares are thriving, notably influenced by AI advancements from DeepSeek. As the Nasdaq struggles, foreign investors are focusing on Chinese sectors like AI and electric vehicles. South Korean interest in Chinese tech stocks has surged, with trading volumes hitting a 30-month high. Analysts foresee continued growth and significant returns in the Chinese market.

China’s technology sector is experiencing significant growth, particularly influenced by advancements from Hangzhou-based DeepSeek in artificial intelligence. As the Nasdaq in New York encounters a downturn, foreign investors are increasingly seeking opportunities in Chinese markets, especially in sectors like AI, electric vehicles, and semiconductors.

Recent statements from China’s Foreign Minister Wang Yi have bolstered investor sentiment, as he described the nation as an “anchor of stability” amid geopolitical challenges posed by the U.S. tariff policies. This perception has attracted foreign interest, with Haitong Securities noting the booming tech share sector driven by confidence in governmental support and innovative companies like DeepSeek.

Investment banks such as Goldman Sachs and Morgan Stanley have released positive outlooks on investment in China, highlighting technological advancements fueling this trend. South Korea serves as a key indicator of this shift, with its investors expanding their Chinese equity portfolios, notably in technology stocks.

As trading volumes surged to a 30-month peak of USD 782 million in February, South Korean investments in Chinese tech sectors surged nearly threefold. Six of the ten most purchased overseas stocks by South Korean investors were related to technology, primarily comprising Chinese companies focused on electric vehicles, AI, and semiconductors.

Xiaomi Corp emerged as a favorite, showcasing success in both consumer electronics and electric automotive sectors, recording a net trading value of USD 72.4 million. Not far behind, electric vehicle manufacturer BYD and e-commerce giant Alibaba were also notable acquisitions. Meanwhile, the South Korean stock market has remained relatively flat, contrasting with Shanghai’s STAR 50 Index, which has seen over 15 percent growth, and the Hang Seng Tech Index, which rose by 43 percent.

Edward Cole, an analyst with Man Group Plc, stated that the Chinese stock market is poised to be among the most appealing globally by 2025. He noted that relative to other major markets, China’s stock market remains undervalued, presenting foreign investors with promising opportunities for returns.

In conclusion, the rising interest in China’s technology sector, driven by key advancements and favorable government policies, is evidenced by South Korean investors significantly increasing their stakes in Chinese tech stocks. Despite recent lackluster performance in the South Korean market, the notable gains in Chinese indices highlight the growing appeal of China as a destination for foreign investment, especially in innovative technologies. Analysts believe this trend will only strengthen, positioning the Chinese market as a competitive player on the global stage.

Original Source: www.shine.cn