The United States and China announced a surprising tariff agreement the day before, easing concerns about tariffs that had been weighing on the Chinese stock market since the beginning of the year. The two countries agreed to reduce tariffs imposed on each other by 115 percentage points over the next 90 days. The U.S. lowered the tariff on Chinese imports from 145% to 30%, while China reduced the tariff on U.S. products from 125% to 10%.
As a result of this news, the Shanghai Composite Index rose by 0.82% the day before, and the ChiNext Index, known as the 'Chinese Nasdaq,' surged by 2.63%.
The Chinese stock market has experienced a pattern of rapid rebounds followed by declines. Among domestic investors, the perception was strong that 'holding onto Chinese stocks will ultimately lead to losses.' However, the recent tariff agreement is renewing market optimism. Reflecting this sentiment, domestic asset management companies are also rolling out products related to Chinese technology stocks.
On this day, four exchange-traded funds (ETFs) related to Chinese technology stocks will be listed on the stock market. These include the active product 'TIMEFOLIO China AI Tech Active' from Timefolio Asset Management, 'TIGER China Tech TOP10' from Mirae Asset Global Investments, and 'China AI Tech TOP10' from Hanwha Asset Management. Samsung Asset Management will launch the 'KODEX China Humanoid Robot' ETF, which contains only stocks related to humanoid robots in China.
Interest in the Chinese market among asset managers is closely related to the 'Terrific10,' which emerged at the end of last year. The Terrific10 is a list of 10 representative Chinese technology corporations presented by Jeff Weniger, the stock strategy chief of U.S. asset management firm WisdomTree, in response to the Magnificent7 (M7) of major U.S. technology stocks. Since September of last year, he has been stating that 'the Terrific10 will topple the M7.'
With the emergence of DeepSeek earlier this year, attention to artificial intelligence (AI) in China has been increasing, even as the U.S. stock market exhibits sluggish performance, leading to a reevaluation of Chinese technology stocks. The Terrific10 includes Xiaomi, Alibaba, BYD, Tencent, Meituan, SMIC, Geely, Baidu, NetEase, and JD.com.
Director General Kim Nam-ho said, 'The DeepSeek case presents an alternative of low-cost and high-performance in the high-cost structure of the AI industry, creating a crack in the U.S.-centric technology hegemony,' and noted that 'the Chinese tech industry is once again rising to the center of the global AI paradigm.'
The day before, China's successful negotiations regarding tariffs significantly alleviated concerns and increased expectations for a rise in the stock market, and the fact that the Chinese government is introducing large-scale liquidity supply measures this year in defense of the economy is seen positively.
However, some expressed opinions that the trends in the stock market should be monitored further. Hana Securities projected that the reevaluation of Chinese and Hong Kong stocks will continue until 2026. Researcher Kim Kyung-hwan of Hana Securities stated, 'In the second half of the year, the Chinese economy will inevitably experience short-term weakening of elasticity amidst the ongoing cycle of escaping long-term recession and recovering domestic demand,' and adjusted the outlook for this year's growth rate downward from 4.8% to 4.5%, evaluating that 'the economic pattern may take on a U-shape with a soft landing focused on domestic demand.'
Following this, Researcher Kim advised, 'In the Chinese stock market, it is recommended to invest in large indices and blue-chip stocks over the long term,' noting that 'the mid-to-long-term supply cycle is still valid, and Hong Kong technology stocks that have resolved supply overheating should be recommended.'