FINANCE

Analysis: Foreign Investors Are Returning to Chinese Stocks, but Will They Stay?

Published: Oct. 10, 2025 3:40 p.m. GMT+8

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Global funds are tip-toeing back into Chinese equities, drawn by depressed valuations in some sectors and a technology narrative that has gained traction this year.

Evidence of this shift is emerging. Chinese private fund Springs Capital said in a Sept. 24 commentary that “foreign inflows are still in their initial stages,” pointing to further potential for inflows.

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Global investors are cautiously returning to Chinese equities, attracted by low valuations and growth in technology sectors.
Most US investors now show renewed interest, with over 90% willing to boost China exposure, the highest since early 2021.
Long-term foreign inflows depend on China’s domestic economic recovery, with challenges like weak property and consumer demand requiring stronger policy support.

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Who’s Who

Springs Capital: Springs Capital (景林资产) is a Chinese private fund that commented on foreign inflows into Chinese equities. In a September 24 commentary, they stated that "foreign inflows are still in their initial stages," suggesting further potential for increased investment. This aligns with a broader trend of growing optimism among global investors regarding the Chinese market.

Morgan Stanley: According to recent meetings held by Morgan Stanley, over 90% of U.S. investors have indicated a willingness to increase their exposure to China. This represents the highest level of investor interest since early 2021.

Deutsche Bank: Huang Fan, formerly the head of Deutsche Bank's China wealth management business, emphasized that for international investors, China's domestic factors, such as growth prospects and policy effectiveness, are more critical than anticipated U.S. rate cuts for sustained inflows.

AI generated, for reference only