Global investors increasingly bullish on Chinese stocks after DeepSeek’s rise

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(Global Times) 10:33, February 10, 2025

Goldman Sachs expects Chinese breakthroughs in AI development and application "could materially alter" the stock market trajectory, estimating that AI-enabled efficiency improvement could increase earnings by 2 percent for Chinese equities, while brighter growth prospects could lead to a 20 percent valuation uplift for Chinese firms, narrowing the gap with US peers, according to Reuters.

At the World Economic Forum in Davos in January, the head of Norway's $1.8 trillion sovereign wealth fund Nicolai Tangen said that "the best thing to do is always to do the opposite of everybody else… it would be to sell the US tech stocks, buy China, sell private credit, just buy stuff that is out of fashion," Bloomberg reported.

"Foreign investors are pouring real money into the Chinese market," said a report published by China Merchants Securities Co on Sunday.

As of the close on Friday, Hong Kong stocks had rebounded to their highest level since October 8, 2024, while the Nasdaq Golden Dragon China Index, which tracks US-listed Chinese companies, is approaching its second-highest level since December 9. Meanwhile, exchange-traded funds listed overseas that track A shares and H shares have ended a three-month period of slow outflows and are now seeing renewed inflows into the Chinese market, according to the report.

Whether from the perspective of the macroeconomic landscape or A-share valuations, the Chinese market has emerged as a more attractive option for long-term foreign capital allocation, Yang Delong, chief economist at Shenzhen-based First Seafront Fund, told the Global Times on Sunday.

"Compared with US equities, Chinese assets - particularly A shares, Hong Kong stocks, and US-listed Chinese stocks - are trading at a valuation trough, offering strong investment appeal. This presents new opportunities for investors positioning themselves in A shares and Hong Kong stocks," Yang said.

(Web editor: Tian Yi, Zhong Wenxing)