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 Articles,” foreign capital and 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, the Hong Kong IPO of Lankit Technology also attracted long-term funds from domestic and international investors, including UBS Asset Management, J.P. Morgan Asset Management, and Aberdeen.

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 like Morgan Stanley, BlackRock, Goldman Sachs, and Citibank have frequently appeared, and foreign investors have also increased their holdings in Hong Kong stocks.

“Foreign investment in Chinese assets remains underweighted,” said a senior executive at a foreign institution in an interview with Caixin. “Global attention to the Chinese market has significantly increased, and many international 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—balancing stable assets on one end and innovative productivity sectors on the other.

Frequent Moves: Foreign Capital Has Shifted from Observation and Underweight to Active Increase in Chinese Assets

Since 2026, global capital has shifted from mere allocation to substantive deployment in China. Major foreign firms like J.P. Morgan have invested over HKD 1 billion 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, cornerstone investors for new listings like Biren Technology, Dongpeng Beverage, Jingfeng Medical, Lankit Technology, Lead Intelligent, and Muyuan Foods include international giants such as 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 underweight 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 paying attention to China’s policies,” said Deng Jianan, Vice CEO of Oriental Heritage Asset Management Hong Kong.

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

Standard Chartered told Caixin that China may introduce more decisive targeted stimulus measures in 2026, especially following the release of the “14th Five-Year Plan,” which 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 economy.

Yao Yuan, Senior Investment Strategist at Oriental Heritage 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.

Tech and Biomedicine Are Favored; AI Is Not a Bubble, But Market Vehicles Show Signs of Bubbles

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

In Hong Kong IPOs, foreign investors are concentrated in companies focused on 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 mentioned the investment potential in Europe and emerging markets, focusing on four core areas: 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. The industrial sector is also poised for opportunities amid global manufacturing recovery, especially in European defense and infrastructure. The healthcare sector is expected to grow steadily driven by consumption upgrades and aging trends. These four sectors form the core of diversified allocations.

From a technological development perspective, Yao Yuan believes AI is central to the new wave of technological revolution, with long-term potential to drive industry upgrades and efficiency. However, some AI stocks are overhyped, showing bubble signs due to excessive speculation.

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

(Source: Caixin)