An illustration depicting an AI robot interacting with stock market candlestick chart Photo VCG

Chinese stocks have become a hot investment for many foreign investors. 

Lately,mk many foreign institutional investors have moved to raise price targets for various Chinese stocks. For example, Goldman Sachs, Morgan Stanley, and Daiwa Securities increased their price targets for Alibaba's Hong Kong-listed shares. JPMorgan and HSBC also raised price targets for Chinese new-energy vehicle (NEV) manufacturers BYD and Xiaomi - the smartphone maker that successfully transferred itself into an NEV maker- respectively, according to media reports. 

In addition to financial institutions, foreign investors have also stepped up their purchases of Chinese stocks. Latest data from Korea Securities Depository revealed that in February, the monthly trading volume of South Korean investors in A-share and Hong Kong stocks reached $782 million, marking a nearly 200-percent increase compared to the previous month, according to a report on aastocks.com on Monday. 

According to statistics from South Korea's largest securities firm, six of the top 10 overseas stocks bought by South Korean investors during February 17-28 were Chinese, primarily in electric vehicles, artificial intelligence (AI), and semiconductor sectors, according to media reports.

Meanwhile, some US analysts have pointed out that China's tech innovation is reshaping the global investor landscape.

Jeff Weniger, head of stock strategy at New York-based WisdomTree Investments, stated that the rise of the top 10 Chinese tech stocks - Terrific Ten (Alibaba, Tencent, Meituan, Xiaomi, BYD, JD.com, NetEase, Baidu, Geely and SMIC) - poses a challenge to the seven giants in US stocks - known as the Magnificent Seven (Meta Platforms, Microsoft, Alphabet, Amazon, Apple, Nvidia and Tesla), indicating a subtle shift in the market landscape.

Weniger wrote on his X account that "my 'Terrific Ten' term is sticking, replacing the Magnificent Seven as the market's new leaders. The Terrific Ten are the Chinese mega stocks that have collectively risen 101.6 percent since December 31, 2023. The Mag 7 giants are shaking downward."

Improving sentiment

This shift in market sentiment stems from a deeper understanding of the underlying logic of China's economic transformation and reflects growing interest among global investors in Chinese tech stocks, analysts pointed out.

Chinese companies like DeepSeek and Moonshot AI have evolved from "followers" to "leaders" in their respective fields, achieving significant breakthroughs, Wang Peng, an associate research fellow at the Beijing Academy of Social Sciences, told the Global Times on Monday, noting that these advancements are not only driving domestic industrial upgrades but also providing smarter products and services to global users.

Deutsche Bank Analyst Peter Milliken said in a note that the AI product DeepSeek and innovation in EVs will serve as catalysts for global money to return to Hong Kong and A-share stocks, according to a Bloomberg report last month.

"Chinese companies across a range of sectors are delivering products that are often better than those from rivals and aren't sufficiently recognized for it," Milliken said.

Chinese stock gauges will top prior highs in the medium term as the world wakes up to the competitiveness of its companies, according to Deutsche Bank.

The rise of Chinese tech startups on the global stage also reflected the country's growing sci-tech innovation capabilities. This year's Government Work Report released during the two sessions noted that China's economic strength, scientific and technological capabilities, and composite national strength continued to rise, and solid new strides were made in advancing Chinese modernization.

"As economic growth becomes increasingly driven by technological innovation and supportive policies, more exciting innovations are expected to emerge. For global investors, economic rebalancing will create a more favorable environment for Chinese equities, particularly tech stocks," said Wang.

Analysts noted that the surge in the popularity of Chinese tech stocks reflects growing confidence in China's technological advancements and industrial innovation momentum.

China's economy is undergoing a transition, with high-growth sectors primarily driven by scientific and technological innovation. Industries such as humanoid robotics and large AI models exemplify this shift, Yang Delong, chief economist at Shenzhen-based First Seafront Fund, told the Global Times.

"Now we are in the midst of the fourth scientific and technological revolution, the main feature of this round of revolution is that AI will change the way we work and live, and AI will empower many traditional industries. Therefore, the frequency of scientific and technological innovation and AI in the Government Work Report is particularly high this year, reflecting the strong support of the central government for scientific and technological innovation development," said Yang.

Boosting innovation 

The Government Work Report states that the country is committed to developing new quality productive forces in light of local conditions and accelerating the development of a modernized industrial system.

"We should pursue integrated advancements in technological and industrial innovation, press ahead with new industrialization, expand and strengthen advanced manufacturing, and vigorously develop modern services. This will enable us to build up the momentum of new growth drivers while upgrading and reviving traditional ones," reads the report.

"By prioritizing the development of new quality productive forces tailored to local conditions and accelerating the establishment of a modern industrial system, China is laying the groundwork for long-term economic expansion while strengthening the resilience and competitiveness of its industrial and supply chains," said Wang.

China has announced several specific measures to boost scientific and technological development.

On March 6, Pan Gongsheng, governor of the People's Bank of China, announced at a press conference that the central bank, in collaboration with the China Securities Regulatory Commission and the Ministry of Science and Technology, will introduce a "tech board" in the bond market.

Pan welcomed international investors to invest in Chinese tech companies, opposing the politicization of market-driven investment behaviors and the establishment of unfair investment barriers.