February 14, 2025
Tech Giants Lead The Charge
The Hang Seng China Enterprises Index rose 2.7%, nearing its October high, with tech giants Xiaomi, Tencent, and Meituan leading the charge. On the mainland, the CSI 300 Index increased by 0.6%.
The surge follows excitement over AI startup DeepSeek’s rapid progress, prompting investors to reassess China’s AI potential. Bloomberg Intelligence’s Marvin Chen noted that DeepSeek reflects China’s progress on self-sufficiency goals, with tech momentum expected to carry into March, when investors will focus on China’s Two Sessions and corporate earnings.
Cautious Optimism
Further optimism stems from signs that President Trump’s 10% tariffs may have less impact than feared. Global investors, burned by past volatility, are now hopeful for a more sustained rise. Deutsche Bank called China’s tech advances a “Sputnik moment,” and Goldman Sachs noted hedge funds are aggressively buying Chinese stocks.
However, some skeptics, like Helen Zhu from NF Trinity, warn that the enthusiasm around DeepSeek may be overblown, with uncertainty about its long-term monetization potential.
