by Jiang Yiman

South Korean investors are ramping up purchases of Chinese stocks, particularly in the technology sector, as the country’s rapid advancements in cutting-edge industries fuel overseas interest. The trend has drawn widespread attention on Chinese social media, with the topic “South Koreans are buying Chinese stocks in large volumes” generating 1.2 billion views on Weibo as of March 10, according to Jiemian News.

Latest data from the Korea Securities Depository (KSD) show that South Korean investors' monthly trading volume in Chinese stocks surged nearly threefold in February compared with the previous month, reaching US$782 million. This marks the highest level since August 2022 and significantly surpasses their investments in European and Japanese equities over the same period.

According to South Korea’s largest brokerage firm, between February 17 and 28, six of the top 10 most net-bought foreign stocks by South Korean investors were Chinese companies. These were predominantly leading players in the electric vehicle, artificial intelligence, and semiconductor sectors.

Meanwhile, the strong performance of Chinese tech stocks has also boosted interest in China-focused exchange-traded funds (ETFs) listed on South Korean stock exchanges. As of the end of February, there were 44 such ETFs, with the highest-performing fund delivering a staggering 62.8% return in the past month—far outpacing the less than 10% returns seen in U.S. index ETFs over the same period. The robust gains have further fueled South Korean investor appetite for Chinese assets.

The bullish sentiment towards Chinese markets is echoed by major international financial institutions. Morgan Stanley expects global investor attention on Chinese assets to persist in the coming months. Goldman Sachs forecasts that widespread AI adoption could boost the overall earnings of Chinese stocks by 2.5% annually over the next decade and potentially attract more than US$200 billion in capital inflows within the next year. JPMorgan, meanwhile, anticipates a sustained valuation re-rating for Chinese tech stocks, with an average annual return of 7.8% projected over the next 10 to 15 years.

China’s stock market has shown strong performance since the beginning of the Year of the Snake. As of early March, the benchmark Shanghai Composite Index, Shenzhen Component Index, Hang Seng Index, and Hang Seng Tech Index have climbed 3.26%, 6.19%, 18.3%, and 25.92%, respectively.