August 2025 saw a landmark shift as global investors recorded the largest net purchases of Chinese stocks in both domestic and offshore markets since September 2024. Data from Goldman Sachs shows that hedge funds’ gross exposure to China hit a two-year high, underlining a renewed view of the Chinese market as key to portfolio diversification.
Once tagged “uninvestable,” China’s $19 trillion equities arena is reclaiming the spotlight. Analysts note that flows are no longer chasing short-term swings but signaling a strategic reallocation away from an overconcentration in US assets. Fast-growing tech firms are leading the charge, offering fresh opportunities in areas like AI, semiconductors and green energy.
But this isn’t just about spotting high-growth sectors. The return of foreign capital reflects rising confidence in the predictability of policy on the Chinese mainland. Over the past year, Beijing has rolled out growth-focused measures, aligning fiscal, monetary and industrial tools to stabilize expectations. Clearer market rules and consistent enforcement have helped corporate valuations realign with earnings potential.
As companies with strong cash flows, rising dividends and transparent governance attract long-term funding, global investors are betting on China’s resilience. The shift illustrates how data-driven insights and policy clarity can reshape global asset allocation—and why the world is watching this market rebound.
Reference(s):
cgtn.com
