WHY CHINA TECH STOCKS ARE RISING LATELY

After several difficult years marked by high volatility and a rising risk premium, Chinese equity markets are experiencing a spectacular rebound in 2025. The Hong Kong Stock Exchange has already gained nearly 30% since the beginning of the year, while Shanghai has recorded a 16% increase. This strong comeback is reviving investor appetite, attracted by the renewed momentum of innovation, brought back to the forefront by DeepSeek and confirmed on several occasions since.

CHINESE SAVERS ARE MAKING A STRONG COME BACK

One of the key factors behind this upturn is the increased participation of local savers. Long-awaited, this mobilization is being driven by the shift in the pension system toward a form of capitalization and the decline in risk-free returns. In a context of few alternatives, many Chinese households are now turning to equities, breathing new life into the markets.

AN ECONOMY ADAPTING TO INTERNATIONAL TENSIONS

Despite persistent trade tensions with the United States and certain tariff barriers, China has successfully redirected some of its exports to other strategic regions such as Southeast Asia and the Middle East. This diversification has enabled the economy to remain resilient and display unexpected strength.

INNOVATION AND STRATEGIC SECTORS ON THE RISE

China’s dynamic is also driven by a sustained pace of innovation. Tech giants such as Alibaba, Baidu, Tencent, and Xiaomi are recording spectacular performances: +32% for Baidu, +70% for Tencent, +200% for Xiaomi, and +75% for Alibaba since January.

Xiaomi, for example, after conquering the smartphone market, is preparing to launch a range of competitive electric vehicles, with international ambitions starting in 2026 and a planned arrival in Europe in 2027. Tencent, for its part, appears particularly well positioned to deploy AI agents within its various platforms and thus improve its customers’ productivity.

Massive investments in artificial intelligence, microchips, and solid-state batteries confirm Beijing’s desire to strengthen its technological and strategic autonomy. The battery sector is dominated by CATL, which supplies approximately one-third of global volumes and continues its expansion into energy storage beyond the electric vehicle market.

Other strategic sectors are also experiencing strong growth: wind power, solar power, data centers, and especially robotics. China aims to produce more than 10,000 humanoid robots by 2025, nearly half of global production. Players such as Sanhua Intelligent Controls, listed in Hong Kong and Shanghai, are already establishing themselves as leaders in industrial automation technologies.

A HIGH RISK PREMIUM, BUT SUSTAINABLE PROSPECTS

While the massive use of leverage by Chinese investors is a risk to monitor, the current environment offers a sharp increase in real equity returns. The risk premium on Chinese markets remains one of the highest in the world, reinforcing their attractiveness.

At the same time, Beijing is continuing its recovery efforts, supporting certain strategic sectors and seeking to curb excess production that was weighing on profitability. Reform and rationalization measures aimed at stabilizing the economic climate and improving corporate competitiveness are currently being implemented.

A KEY ROLE IN THE GLOBAL LANDSCAPE

China’s rise in advanced technologies, combined with its de-dollarization strategy and diplomatic overtures toward India, Central Asia, and the Middle East, confirms its growing role on the world stage.

After years of distrust, international and domestic investors are rediscovering a long-neglected market that now offers growth and innovation potential that is difficult to ignore.