Foreign investors are increasingly optimistic about Chinese assets, with major investment banks predicting significant growth in the Chinese stock market this year.
Deutsche Bank recently reported that investors are recognizing the competitive advantages of the Chinese mainland’s manufacturing and service sectors. The bank highlighted that Chinese companies are offering better value and often superior quality, expecting the longstanding “China discount” on valuations to disappear. They foresee a potential premium as investors acknowledge China’s dominance in various sectors.
Goldman Sachs echoed this positive outlook, citing the rise of Chinese AI company DeepSeek as a key catalyst for technology stocks. The investment bank predicted a 14% to 28% increase in the MSCI China Index, noting that advancements in AI software could also benefit A-shares, according to the Securities Times.
DeepSeek has made headlines globally after announcing that its latest reasoning model, R1, rivals OpenAI’s o1 in problem-solving ability while being significantly more cost-effective. Experts across various markets have validated DeepSeek’s claims, igniting bullish sentiments around China’s AI sector.
Analysts at HSBC noted that global attention on DeepSeek may prompt investors to reassess the innovation capacity of the Chinese mainland. “This could act as a catalyst for a revaluation of the Chinese equity market this year,” they stated, as reported by Investing.com.
Bank of America also expressed confidence in Chinese equities, recommending investors to go long on Chinese stocks while advising caution towards the U.S. stock market, according to Bloomberg.
These positive assessments from major investment banks underscore a growing confidence in the Chinese market, highlighting the increasing attractiveness of Chinese assets to global investors.
