“This year, China’s high-tech sector has been closely watched by overseas investors, and the enthusiasm of Korean investors to buy Chinese stocks is rising,” Korean media dspdaily reported on the 9th, monthly trading volume in Chinese and Hong Kong stocks by Korean investors reached $782m in February, up nearly 200 per cent month-on-month, according to Korea Securities Depositary Clearing. Not only did the volume hit its highest level since August 2022, but it also dwarfed the amount of money South Korean investors put into European and Japanese stocks over the same period. Notably, China accounted for six of the top 10 foreign stocks bought by Korean investors between February 17 and 28, mainly for electric vehicles, artificial intelligence, chips and other fields.
South Korea’s Asia daily newspaper reported that with the launch of a large model of artificial intelligence developed by Chinese company DeepSeek and the continuous improvement of JÁDY’s self-driving technology, korean investors have regained their enthusiasm for the Chinese market. Xiaomi, Alibaba, BYD Company, Baekje Shenzhou, smic, Ubisoft and Tencent were among the top 30 Chinese companies that Korean investors bought on a net basis. China index etfs (exchange traded funds) , which are listed on the Korean stock exchange, have enjoyed strong gains as technology stocks have performed strongly. By the end of February, the biggest gainer among the 44 China index etfs listed on the Korean exchange had returned 62.8 percent in the past month, the data showed, this has further attracted the attention of Korean investors to china-related stocks.
According to an analysis by the Asia daily, investors have increased their allocation to Chinese stocks as Chinese technology companies continue to make breakthroughs through technological innovation in the face of widening global economic risks. These stocks have also delivered significant gains for investors, with Alibaba up 44.39% in February, Xiaomi up 35.97% and BYD Company up 33.06% . By contrast, South Korea’s economic downturn and political situation, the recent overall performance of the Korean stock market is flat, since February, the Korean composite stock index rose less than 2% . US technology stocks have also been falling.
Bloomberg reported this week that an index of seven Chinese tech giants, including Alibaba and Tencent (Société Générale called the“Big Seven”) , has risen more than 40 per cent this year. That compares with a 10 per cent fall in the index of the seven biggest tech companies, including Apple, Microsoft, Google, Tesla and Nvidia. ‘few on Wall Street expected such a reversal of fortunes, and the outperformance of China’s tech giants is far from over, ‘ the report said.
For all the global capital pouring into Chinese assets, Gurufocus believes the trend is driven by global economic uncertainty and China’s strong technological progress. Korean investors are also bullish on China’s post-npc stimulus policies and support for industries such as robotics, semiconductors and autonomous driving. “Asia Daily” analysis, especially as China continues to make breakthroughs in advanced technology such as AI, is expected to further strengthen the trend of Korean capital flows to overseas stock markets in the future.
Xiang haoyu, a research fellow at the asia-pacific Institute of the China Institute of International Studies, told the global times on Monday that the phenomenon reveals a major change in global industrial competition and capital flows. China’s technological breakthroughs in artificial intelligence, electric vehicles, semiconductors and other fields have not only profoundly changed the global industrial technology competition pattern, but also significantly boosted the confidence of the international capital market in China. Chinese technology stocks are attracting more investor attention because of policy support, valuation advantages and growth potential. This phenomenon also reveals the trend of global industrial chain reconstruction: as China forms a new growth pole through independent innovation and domestic demand, South Korea, as a manufacturing power, is facing the pressure of industrial chain transfer, they also hope to find new business opportunities in China. In the future, the performance of China’s technology stocks will continue to be affected by policy implementation, technological breakthroughs and international developments. South Korean investors may also become an important indicator of the direction of global capital flows.