Global banks bet big on China's tech surge
Nomura, Goldman and Morgan Stanley point to AI, chips and robotics as export growth outpaces expectations.
Foreign banks and asset managers are warming to China's hard-technology sector, as breakthroughs in artificial intelligence, semiconductors and advanced manufacturing translate into stronger exports, healthier earnings and rising interest from global funds.
China's high-tech exports jumped more than 50% year on year in July, comfortably outstripping the 17.8% growth in overall exports, according to customs figures. Investment flows have tracked the export boom, with foreign money moving into Chinese technology shares and global index providers admitting newly listed hard-tech firms.
Rob Subbaraman, head of global macro research and co-head of global markets research at Nomura, said cheap, abundant electricity, a deepening talent pool and an early lead in physical AI were propelling the rapid build-out of China's AI supply chain.
He argued that China's push into open-weight models — citing Chinese firms such as DeepSeek and Moonshot AI — could speed up business adoption, letting the productivity gains from AI as a general-purpose technology ripple through the economy more quickly. The lower cost of these models was a further advantage, he added, with the benefits likely to extend beyond China's borders, particularly to emerging markets that could take up cheaper Chinese AI models.
China's manufacturing strength is becoming ever more apparent too, according to Robin Xing, chief China economist at Morgan Stanley. He pointed to the country's roughly 50% share of newly installed global energy storage capacity, plus a rapid rise in outbound licensing deals for innovative drugs — trends he said underpin the long-term case for investing in China's hard-tech firms and top manufacturers.
Those strengths are increasingly showing up in how foreign investors allocate their money. Goldman Sachs has raised its 12-month target for the CSI 300 index twice this year on the back of improving earnings momentum, and has kept an overweight stance on Chinese equities.
Kinger Lau, Goldman's chief China equity strategist, said the bank's bullish view reflected stronger earnings momentum and favourable macroeconomic and liquidity conditions. He added that A-shares offered international investors diversification benefits that remain underappreciated, alongside attractive exposure to hard-tech and AI themes.
Individual firms are attracting overseas attention of their own. ChangXin Memory Technologies soared 465.82% on its Shanghai STAR Market debut last month, taking its market value past 3.2t yuan (roughly $471.28b). US-based Tema ETFs made the chipmaker a top holding, at a 10.56% weighting, on its first day of trading, while MSCI added the firm to its China All Shares Index on Monday under a fast-track rule for large flotations.
Robotics is where the excitement is most visible. Unitree, poised to become the first mainland-listed humanoid robot maker, priced its Shanghai IPO at 150.8 yuan a share — 10% of its post-offering share capital — in an offering expected to raise roughly 6.1b yuan in gross proceeds.
The optimism sits alongside broader economic strains. Nathan Chow, senior economist at DBS Bank, said the mismatch between relatively strong supply and weak demand remained pronounced, with household spending and corporate profitability still under pressure. Infrastructure investment could help offset weak private investment in the near term, he said, while lowering logistics and energy costs and improving resource allocation over the longer run — as well as strengthening supply chains and reducing the economy's exposure to external shocks and geopolitical risk.
Analysts said the way policy measures are implemented would prove crucial to sustaining the recovery through the second half of the year. Song Yu, chief China economist at UBS Securities, said economic management required both "easing the brakes and stepping on the accelerator" — faster fiscal spending, the deployment of bond proceeds, additional policy support and closer coordination between fiscal and financial policy, alongside steps to remove barriers to household consumption and improve the business environment.
"With stronger policy support and measures taking effect, China's economy is expected to maintain a steady recovery in the second half of the year," Chow said.
