Surge in Chinese Technology Shares Draws South Korean Investors

China’s technology shares are on the rise, driven by advancements by companies like DeepSeek and resonating confidence from foreign investors, particularly in South Korea. The Korean investment in Chinese tech stocks has reached significant levels due to positive market trends and governmental support for the sector. Analysts foresee China’s stock market becoming increasingly attractive for foreign investments.

China’s technology shares are experiencing significant growth, notably influenced by advancements in artificial intelligence, particularly by Hangzhou-based DeepSeek. While the Nasdaq market in New York faces a downturn, foreign investors are increasingly attracted to China’s opportunities in AI, electric vehicles, and semiconductors, indicating a shift in investment focus.

Support for China’s technological investment landscape has been bolstered by recent comments from Foreign Minister Wang Yi, who characterized China as an “anchor of stability” amid ongoing global tensions. This sentiment appears to resonate with many investors, contributing to a buoyant investment atmosphere.

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.” The government’s emphasis on technology further encourages investor confidence. Major foreign investment banks have released favorable outlooks regarding investments in China, highlighting significant technological advancements.

The trend is evident in South Korea, where investors are significantly increasing their portfolios in Chinese technology stocks. The trading value reached $782 million in February, the highest in 30 months, as reported by the Korea Securities Depository & Clearing Corp. South Korean trading in China surpassed that of European and Japanese shares, tripling from January levels.

Notably, six out of the ten most purchased overseas stocks by South Korean investors were Chinese tech equities, particularly in the electric vehicle, AI, and semiconductor sectors. Xiaomi Corp emerged as the most favored stock, with a trading value of $72.4 million, followed by electric vehicle maker BYD and Alibaba.

In contrast to the lackluster Korean market, which has seen less than a 2 percent increase since February, Chinese indices have thrived. The Shanghai STAR 50 Index gained over 15 percent, with the Hang Seng Tech Index soaring 43 percent.

Edward Cole of Man Group Plc described the Chinese stock market as possibly becoming the most compelling market by 2025, asserting, “Compared with other major markets, the valuation of China’s stock market is still at a low.” This presents foreign investors with a notable safety margin and potential for substantial returns.

In summary, China’s technology sector is seeing a remarkable rise in foreign investment, particularly from South Korean investors who are capitalizing on the growth of companies in AI, electric vehicles, and semiconductors. The optimism surrounding China’s market, particularly following supportive governmental depictions, stands in stark contrast to the stagnation in other markets. As foreign investment continues to flow into China’s promising sectors, analysts predict a bright future for investments in the region.

Original Source: www.shine.cn