Foreign financial institutions are seeing a stronger investment case for China's hard-tech industries as breakthroughs in artificial intelligence, semiconductors and advanced manufacturing drive an increase in exports and earnings, resulting in growing interest from global investors.
China's high-tech exports surged over 50 percent year-on-year in July, well ahead of the 17.8 percent growth in total exports, customs data show. The export gains are being mirrored in investment flows, with foreign funds moving into Chinese technology stocks and global indices adding newly listed hard-tech companies.
Rob Subbaraman, head of global macro research and co-head of global markets research at Nomura, said China's low-cost and abundant electricity supply, growing talent pool and early lead in physical AI are driving the rapid development of its AI industry chain.
China's development of open-weight models could accelerate their adoption by businesses, allowing productivity gains from AI as a general-purpose technology to spread more quickly across the economy, he said, citing models from Chinese firms such as Deep-Seek and Moonshot AI.
China's strength in advanced manufacturing has also become increasingly evident, said Robin Xing, chief China economist at Morgan Stanley, pointing to the country's roughly half share of global installed new energy storage capacity and the rapid growth in outbound licensing deals for innovative drugs. These trends, he said, underpin the long-term investment case for China's hard-tech sector and leading manufacturers.
