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China stocks hit 10-year high on tech gains, policy support and foreign inflows

抖音推荐 2025年10月28日 22:05 1 admin

by CHEN Jing

China stocks hit 10-year high on tech gains, policy support and foreign inflows

China's benchmark Shanghai Composite Index climbed above 4,000 points on Tuesday for the first time in a decade, reaching its highest level since August 2015 amid a tech-led rally and sustained policy support. The index has gained nearly 19% so far this year.

Daily turnover has exceeded 2 trillion yuan ($275 billion) for more than a month—roughly double last year's average—signaling broad participation across institutional and retail investors.

Tech rally drives milestone

Chipmakers, AI-computing and memory stocks extended gains, fueling optimism that China's "new economy" sectors could offset weakness in traditional industries. Semiconductor shares jumped 18% in September, while AI and computing leaders rose more than 20%, according to Wind data.

The Shanghai benchmark has broken successive resistance levels since August, crossing 3,900 earlier this month before breaching 4,000. Analysts say the rally remains orderly, underpinned by earnings momentum rather than speculative trading.

Outstanding margin trading in China has climbed to 2.45 trillion yuan, reflecting higher leverage but manageable risk. Foreign investors have also increased holdings in SMIC, NAURA Technology, CITIC Securities and Ping An Insurance, aligning with the market's dominant tech and finance themes.

Global capital turns back to China

Morgan Stanley said in a note that U.S. investor interest in China has reached a five-year high, with more than 90% of clients planning to raise exposure. WANG Ying, the bank's chief China equity strategist, said optimism toward Chinese equities "has risen significantly compared with 2021–2024."

Goldman Sachs added that China's main stock indexes could rise about 30% by 2027, driven by 12% annual earnings growth and a 5–10% valuation re-rating. The bank cited improving profitability and investor confidence in China's innovation capacity—from robotics to advanced manufacturing.

The momentum has also spilled over to offshore markets, with U.S.-listed Chinese companies and China-focused ETFs rallying in recent weeks—another sign that global investors are re-rating Chinese assets after years of caution.

ZHAO Xijun, co-dean of Renmin University's Capital Market Research Institute, said China's capital market is becoming increasingly attractive within the global landscape. He noted that international investors are gradually boosting allocations to renminbi-denominated assets, reflecting a clear shift in global capital flows.

Analysts see extended bull run

Strategists at China Galaxy Securities said in a note that the upcoming Fourth Plenum of the Communist Party's 20th Central Committee—a key policy meeting expected later this year—could reinforce reform and investment signals under the "15th Five-Year Plan," boosting market confidence.

YANG Delong, chief economist at First Seafront Fund, said the rally marks a structural "tech bull" driven by innovation and capital-market reforms. "Technology self-reliance will remain the core growth driver, with sectors like semiconductors, humanoid robots, solid-state batteries and innovative drugs attracting strong capital inflows," he said.

Analysts at CITIC Securities said the market has likely entered the "second stage" of a bull run—steady and liquidity-backed rather than speculative. Huaxi Securities' LI Lifeng described the cycle as a "slow bull," driven by growing household participation through ETFs and public funds.

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