Overseas capital has flowed into China's advanced manufacturing and technology sectors at an unprecedented rate, reaching a record 3.13 trillion yuan in mainland equity holdings by the end of Q2 2026. This shift signifies a move away from traditional consumer and financial stocks towards industries supporting Beijing's tech self-sufficiency goals.
Mainland Chinese investors bought a record HK$1.19 trillion (US$151.8 billion) in Hong Kong shares via Southbound Stock Connect in the past year, reflecting strong market confidence driven by a robust IPO pipeline. Average daily turnover of these inflows surged 84% year-on-year.
Mainland Chinese investors have reduced purchases of Hong Kong-listed shares this year to about US$30 billion in southbound inflows, down from US$180 billion in 2025, as more pure-play AI investment options emerge across mainland and Hong Kong exchanges. BNP Paribas strategists say investors remain positive on China's AI story but now have more options to express those views beyond Hong Kong-listed internet stocks, shifting from broad index exposure to selective bets on individual companies.
