China’s Technology Shares Draw International Interest, Particularly from South Korea

China’s tech shares are experiencing a boom, influenced by advances from companies like DeepSeek in AI. South Korean investors are increasingly diversifying into Chinese tech stocks, reaching new trading highs. While the South Korean market remains stagnant, Chinese indices demonstrate impressive growth. Analysts predict continued investor interest in Chinese equities through 2025, reflecting favorable valuation opportunities.

China’s technology sector has been experiencing remarkable growth, particularly influenced by advancements from companies like DeepSeek in artificial intelligence. This upsurge has significantly caught the attention of foreign investors, especially as the technology market in the United States faces challenges. Key Chinese industries, such as electric vehicles and semiconductors, are viewed as attractive investment opportunities amidst this shifting landscape.

Recent statements from China’s Foreign Minister Wang Yi, branding the nation as an “anchor of stability” in turbulent global conditions, have further enhanced foreign interest. Reports from notable firms like Haitong Securities indicate that investor confidence has surged, fueled by governmental support for technological advancement.

South Korea serves as a poignant example of this trend, showcasing a marked increase in investment in Chinese technology stocks. The trading volume peaked at a 30-month high of $782 million in February, reflecting a significant uptick in interest compared to previous months. Notably, the participation of South Korean investors in the Chinese market has greatly surpassed that of European and Japanese stocks.

Analysis reveals that six out of the ten most purchased foreign stocks by South Korean investors were Chinese technology shares, highlighting the preference for sectors such as electric vehicles and AI. Xiaomi Corp emerged as the favorite, accumulating a net trading value of $72.4 million, with other contenders including BYD and Alibaba.

While investments in Chinese shares surged, the South Korean market has remained relatively stagnant, with the Korean Composite Stock Price Index recording only a minor increase. In stark contrast, indices reflecting China’s technological capabilities, including the STAR 50 Index and the Hang Seng Tech Index, have demonstrated substantial gains, outperforming several global benchmarks.

Industry analysts, such as Edward Cole from Man Group Plc, express optimism regarding China’s stock market potential, forecasting it to be a prominent market by 2025. With comparatively lower valuations in China, foreign investors are encouraged by a favorable risk-reward scenario.

In conclusion, China’s technology sector is attracting significant foreign investment, particularly from South Korea, driven by positive market sentiment and technological advancements. The contrasting performances of the Chinese and South Korean stock markets underscore the allure of Chinese equities, especially in tech-related industries. Analysts foresee further growth as China’s market presents a compelling opportunity for investors seeking high safety margins and returns.

Original Source: www.shine.cn