China's financial markets are witnessing a robust resurgence of foreign investment, with August 2025 marking the highest net purchases in domestic and overseas stock markets since September 2024. Analysts attribute this trend to renewed confidence in Asia's largest economy, driven by strategic policy reforms and emerging opportunities in high-growth sectors.
Tech Sector and Portfolio Rebalancing Drive Momentum
Goldman Sachs reports global hedge funds' exposure to Chinese assets hit a two-year peak, while Reuters notes international capital is returning to China's $19 trillion stock market after previous skepticism. Experts suggest investors are diversifying portfolios amid concentrated U.S. market risks, with China's technology innovation ecosystem offering fresh potential for long-term returns.
Policy Reforms Anchor Investor Confidence
The capital inflow reflects growing recognition of Beijing's coordinated approach to economic stabilization. Recent fiscal and industrial policy packages have enhanced market predictability, with clearer regulatory frameworks allowing corporate valuations to align more closely with fundamental performance. Companies demonstrating strong governance and sustainable dividend policies are particularly attracting institutional interest.
Yang Hangjun, professor at the University of International Business and Economics, observes: "This isn't speculative trading but a structural recalibration. Global capital recognizes China's critical role in balanced asset allocation as markets normalize."
