CSRC Foreign Investment Roundtable Signals: Foreign Investors Say Goodbye to Caution on Chinese Assets, Actively Increasing Holdings! AI Investment Hides New Logic

On February 27, the China Securities Regulatory Commission held a symposium with foreign institutions on the “14th Five-Year Plan” for the capital market. Participants believe that since the implementation of the new “National Nine Rules,” foreign investment and foreign institutions’ willingness and enthusiasm to participate in China’s capital market have significantly increased.

Since the beginning of 2026, global capital has been actively deploying in China. Materials technology company Wolong Nuclear Materials recently listed on the Hong Kong Stock Exchange, with top global quantitative trading firm Jump Trading among its cornerstone investors. Prior to this, LANXING Technology’s Hong Kong IPO also attracted long-term funds from both domestic and international investors, including UBS Asset Management, J.P. Morgan Asset Management, and abrdn.

Meanwhile, foreign institutions are conducting intensive research. Wind data shows that over 230 foreign institutions have researched A-share listed companies this year. Leading firms such as Morgan Stanley, BlackRock, Goldman Sachs, and Citibank have frequently appeared, and foreign investors have also increased their holdings in Hong Kong stocks.

“Foreign capital still has a low allocation to Chinese assets,” said a senior executive at a foreign institution in an interview with Caixin. He noted that international attention to China’s market has significantly increased, and many global investors are reassessing and reallocating Chinese assets.

Regarding China’s capital market in 2026, foreign institutional respondents told Caixin that the market does not lack potential liquidity. As household wealth continues to shift into the capital market and foreign inflows persist, market funding is well supported. For conservative investors, it is recommended to focus on high-dividend sectors. Overall, a “barbell” allocation strategy is advised—allocating stable assets on one end and innovative productivity sectors on the other.

Frequent Moves: Foreign Investment Has Shifted from Observation and Low Allocation to Active Increase

Since 2026, global capital has shifted from mere positioning to substantive deployment in China. Major foreign firms like J.P. Morgan have invested over 1 billion HKD early in the year to increase holdings in leading Hong Kong stocks such as CATL and Cinda Biotech, covering new energy and biopharmaceutical sectors.

At the same time, foreign investors are actively participating in cornerstone investments in Hong Kong IPOs. Since January, prominent cornerstone investors in newly listed companies like Bairun Technology, Dongpeng Beverage, Jingfeng Medical, LANXING Technology, Lead Intelligent, and Muyuan Foods include Temasek, BlackRock, UBS Asset Management, J.P. Morgan, and Fidelity.

Additionally, data shows that foreign research activity on A-shares has increased markedly. Wind statistics indicate that in January 2026, 220 foreign institutions conducted 526 research visits to A-share companies, compared to only 129 institutions and 237 visits in December 2025.

“Currently, foreign investment in Chinese assets has shifted from observation and low allocation to active increase; China’s economic policies (such as expanding domestic demand and infrastructure investment) and its comparative advantages over other global markets are key drivers of capital inflows. Overseas investors are increasingly interpreting and paying attention to China’s policies,” said Deng Jianan, Vice CEO of Oriental HuiLi Asset Management Hong Kong.

Another foreign CEO in China echoed this sentiment, revealing to Caixin that international attention to China’s market has significantly increased, prompting many global investors to reassess and reallocate their Chinese holdings.

Standard Chartered told Caixin that China may introduce more decisive but targeted stimulus measures in 2026. The release of the “14th Five-Year Plan” emphasizes accelerating investment in advanced technologies to enhance self-sufficiency and productivity. The bank remains overweight on Chinese stocks, expecting targeted policy support and strong earnings growth related to AI themes to bolster the Chinese economy.

Yao Yuan, Senior Investment Strategist at Oriental HuiLi Asset Management Asia, also told Caixin that China’s market does not lack potential liquidity in 2026. As household wealth shifts into the capital market and foreign inflows continue, market funding remains robust.

Technology, Biomedicine, and Other Sectors Are Favored; AI Is Not a Bubble, but Market Valuations Show Signs of Bubbles

In foreign research, sectors like semiconductors, AI, biomedicine, and new energy are highly favored. Wind data shows that companies like Huaming Equipment, Yingstone Innovation, and Huichuan Technology have each been researched by over 50 foreign institutions.

Among Hong Kong IPO cornerstone investors, many are industry leaders in AI, chips, and semiconductors, also covering consumer, medical, and high-end manufacturing sectors.

Most foreign institutions expressed optimism about technology and healthcare sectors. Yao Yuan also mentioned the investment potential in Europe and emerging markets. Focus areas include AI, finance, industry, and healthcare.

Yao Yuan stated that AI aligns with the global technological revolution, benefiting from industry upgrades and productivity improvements with long-term logic, not short-term market hype. However, some AI stocks are overhyped with inflated valuations, showing signs of bubbles.

Based on this, Yao Yuan highlighted three major risks for investors: first, profitability risk—some companies have not yet established stable earnings; second, liquidity risk—if market liquidity tightens, high-valuation AI stocks may face valuation corrections; third, regulatory risk—widespread AI application may lead to tighter regulations on data security and ethics, constraining industry development.

(Source: Caixin)