Chinese assets gaining favor among foreign investors

Foreign investment institutions are increasingly bullish on Chinese assets, with several investment banks predicting strong growth for the Chinese stock market in 2025. Deutsche Bank believes this is the year investors recognize the competitive advantages of China's manufacturing and service sectors. Chinese companies are offering better value and often better quality, the bank stated in a report on Wednesday. They expect the "China discount" on valuations to vanish and soon turn into a premium as investors acknowledge China's dominance in various sectors. Goldman Sachs echoed this sentiment, citing the rise of DeepSeek as a significant catalyst for Chinese technology stocks. The New York-headquartered investment bank predicted a 14 percent to 28 percent rise in the MSCI China Index, with A-shares also benefiting from advancements in AI software, the Securities Times reported. The recent emergence of Chinese AI company DeepSeek has triggered shockwaves in the global market. DeepSeek's claim, validated by experts in various other markets, that its latest reasoning model R1 rivals OpenAI's o1 in problem-solving ability while being significantly more cost-effective has ignited a wave of bullish sentiments surrounding China's AI sector. HSBC analysts noted recently that "the global attention on DeepSeek can spur investors to reassess China's innovation capacity, which could act as a catalyst for a rerating of the Chinese equity market this year," as reported by Investing.com. Bank of America also favors Chinese equities, recommending investors go long on Chinese stocks while expressing caution about the US stock market, according to Bloomberg. These positive assessments from big investment banks collectively indicate a growing confidence in the Chinese market and underscore the increasing attractiveness of Chinese assets to global investors.

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