Anchoring on China's assets with a "safety premium," Korean funds are "buying up" Chinese assets. New energy and hard technology are favored.

Since the escalation of tensions between the U.S. and Iran in March, global financial markets have been thrown into violent swings. Investors are increasingly placing importance on the safety and liquidity of assets.

Meanwhile, Chinese assets are becoming a “safe-haven” option for some investors in the Asia-Pacific region.

According to SEIbro data under Korea Securities Depository (KSD), as of March 22, in the most recent month, Korean investors focused their buying in the A-share market on Sany Heavy Industry, Ganfeng Lithium, Invenics, GoerTek? Wait: 光迅科技, and China Yangtze? Longd? (长电科技、中际旭创). The net buy amounts for each are all over $1 million. Among them, Sany Heavy Industry is especially favored, with Korean investors’ net purchases exceeding $7.78 million.

In the same period, in the Hong Kong stock market, besides high-end manufacturing, Korean investors also重点 allocated to the new energy vehicle industry chain and energy and electricity-related themes.

Overall, there are also signs that foreign capital is returning to the Hong Kong stock market recently.

“A core logic for allocating to Chinese assets right now—whether global funds or Korean funds—is that capital is concentrating on companies with solid fundamentals, reasonable valuations, and global competitiveness.” A person interviewed told the reporter from 21st Century Economic Herald.

What are Korean investors buying?

Recently, Korean investors have shown strong interest in Chinese assets in high-end manufacturing, technology, energy, and electricity, among others.

According to SEIbro data, from February 23, 2026 to March 22, Korean investors’ top five A-share companies by net purchases, in order, are: Sany Heavy Industry, Ganfeng Lithium, Invenics, Fiberhome Optoelectronics? Actually 光迅科技, and Yangtze? Longd? (长电科技). The net purchase amounts are, respectively: $7.78 million, $2.25 million, $1.60 million, $1.54 million, and $1.53 million.

At the same time, Zhongji Axuchuang? (中际旭创) has also drawn considerable attention, with Korean retail investors’ net purchases of $1.47 million. The net purchase amounts for Meihua Biology, Sunlcho? (顺络电子), Zhaoyi Innovation, and Gotion High-Tech? (国轩高科) all exceed $790k, among which Meihua Biology has the highest net purchases at $940k.

While buying individual stocks, Korean investors have also “set their sights on” A-share ETFs, mainly buying products such as the Huaxia Guozheng Semiconductor Chip ETF and the Endeavor? (易方达中证人工智能主题ETF).

In the Hong Kong stock market, Korean investors are even more enthusiastic about ETF products. From February 23, 2026 to March 22, among the top five targets by net purchases by Korean investors, there are three ETFs and two individual stocks.

Ranked by net purchase amount, in order: Global X China Electric Vehicles ETF, China Energy Engineering, Southern Dongying 2x Long SK Hynix ETF, Southern Dongying 2x Long Samsung Electronics ETF, and Jingwei Tiandi. The net purchase amounts are, respectively: $32.05 million, $5.66 million, $5.27 million, $3.66 million, and $2.84 million.

In addition, Korean investors bought a substantial amount of Harbin Electric, Xun Ce, Lantian? Actually 澜起科技, China Resources Power, and Goldwind Technology in the Hong Kong stock market, with net purchase amounts all exceeding $2 million. Among them, Harbin Electric has the highest net purchases, at over $2.79 million.

The above Hong Kong-listed companies are distributed across sectors such as energy, thermal power equipment, wind power equipment, chips, and software services, among others.

Overall, Korean investors’ preference for Chinese assets is becoming increasingly clear.

“Currently, Korean investors are focusing on assets related to China’s ‘new-quality productive forces,’ such as high-end manufacturing, semiconductors, and new energy.” 曾方芳 from PaiPaiWang Wealth’s public fund product operations told reporters. The investment logic is mainly based on two points: first, these tracks are highly aligned with global industrial upgrading and China’s policy orientation, and they have clear long-term growth potential with standout cost-effectiveness for allocation; second, China–Korea industrial complementarity is strong—by investing in these targets, Korean capital can conveniently share the development dividends brought by China’s complete supply chain, the huge domestic demand market, and the energy transition process.

Gao Anjing, a fund manager at Mingze Investment, further analyzed that from recent trading behavior, it can be clearly observed that Korean investors’ layout in the A-share market shows a distinct preference, focusing mainly on leading companies in high-end manufacturing and the TMT sector. In the Hong Kong stock market, in addition to the above areas, they also重点 allocate to the new energy vehicle industry chain and energy and electricity-related themes.

Gao Anjing believes Korean investors prefer this type of assets for two reasons. On one hand, the relevant tracks have strong synergy with Korea’s domestic advantageous industries, and there is an interconnected effect in terms of business-cycle conditions. On the other hand, there are also more universal considerations: whether it is global foreign capital or Korean funds, the core logic for allocating to Chinese assets is currently converging toward targets with solid fundamentals, reasonable valuations, and global competitiveness—this is a typical market environment dominated by structural opportunities.

Foreign capital favors high-end manufacturing and hard tech

In fact, foreign capital as a whole has recently shown signs of returning to the Hong Kong stock market.

A research team from Industrial Securities’ strategy research department noted that, based on data from the HKEX, since early March, international intermediaries have ended the previously one-way outflow trend and have gradually begun a small-scale return, shifting to two-way trading. According to estimates based on data from HKEX custodians, from March 2 to March 18, international intermediaries accumulated net inflows of HK$210 million.

However, unlike the “Middle East capital inflows into the Hong Kong stock market” rumor widely circulated earlier, the Industrial Securities strategy research team believes that foreign capital adding to positions in Hong Kong stocks recently is likely mainly flexible funds in the Asia-Pacific region, rather than long-term capital from the Middle East.

The team specifically analyzed that the foreign capital increasing holdings in Hong Kong stocks in this round may mainly be composed of flexible funds such as overseas hedge funds. From EPFR data, affected by the decline in global risk appetite and tightening expectations for liquidity, overseas long-term active funds representing overseas long-haul capital have gradually flowed out of the Hong Kong market since March; from February 26 to March 18, a total of $550 million was sold.

Gao Anjing also said that since March, foreign capital overall has shown a net inflow trend. In particular, early-month data showed that China’s stock market and bond market simultaneously received net purchases from foreign capital. However, due to fluctuations in the global macro environment, flexible foreign capital has seen a phase of outflows recently, though long-term allocation-oriented funds have remained relatively stable.

“Based on the recent clear optimistic stances expressed by multiple foreign capital institutions regarding Chinese assets, we expect that foreign investors’ long-term confidence in the Chinese market has been restored to some extent,” Gao Anjing said.

On the other hand, recently, there are some differences in foreign capital’s allocation directions between the A-share and Hong Kong stock markets.

Zeng Fangfang pointed out that foreign capital’s allocation between the A-share and Hong Kong markets shows structural differences. Overall it reflects two-way positioning, but with greater emphasis on Hong Kong stocks.

“In the A-share market, foreign capital operations have become differentiated: long-term allocation-oriented funds continue to flow into undervalued core assets, while trading-oriented funds conduct wave-by-wave transactions as the market fluctuates. In the Hong Kong market, foreign capital shows a more continuous and explicit net inflow trend. The core of Hong Kong’s attractiveness is that: valuations are at a significantly low level, providing a higher margin of safety; meanwhile, cyclical sectors such as energy and technology are tightly linked to global industrial trends, giving foreign capital a clear investment mainline.

Zeng Fangfang further explained that in the A-share market, foreign capital mainly focuses on two directions: first, financial blue chips with low valuations and high dividends, to meet its defensive allocation and income needs; second, sectors related to ‘new-quality productive forces,’ with strong expectations for their long-term growth potential supported by policy, which it views as core assets combining both growth and value.

In the Hong Kong market, foreign capital concentrates on adding positions in the energy and technology sectors. “The energy sector directly benefits from the geopolitical situation, while the technology sector moves in sync with global industrial trends, and compared with overseas markets, the related targets have better valuation and cost-effectiveness,” Zeng Fangfang said.

Based on current market performance, Gao Anjing believes foreign capital’s adding-to-positions direction is clear: it mainly focuses on areas with global industrial competitiveness, a high valuation safety margin, and stronger earnings certainty. It places emphasis on high-end manufacturing and sub-segments of hard-tech as well as high-dividend value-type assets, while continuing to make efforts in Hong Kong’s undervalued core blue-chip targets.

“The core logic is that, in the long run, foreign investors are optimistic about the mid-to-long-term competitive strength of China’s related industries, and at the same time the valuations of the related assets are in a reasonable range. In a context of heightened volatility in global markets, these assets have both strong defensive attributes and considerable growth upside, perfectly aligning with overseas capital’s core demand for a margin of investment safety. At the same time, continued policy support for the real economy and new-quality productive forces further enhances the allocation value of such assets,” Gao Anjing analyzed.

It is worth noting that the idea that Chinese assets are gaining a security premium is becoming a consensus.

Orientalhong Asset Management said Chinese assets have logic support for being a “safe haven.” Looking at the medium term, amid the global turbulence pattern, China’s stability and strategic depth could make it the winner.

First, the “firewall” effect of the energy mix: China’s energy transition strategy has shown results in recent years. The stabilizing role of coal and the explosive growth of new energy effectively block the transmission of high oil prices to domestic electricity and industrial costs. This kind of endogenous stability is particularly scarce in the context of global energy inflation.

Second, the “hard-core” repricing of supply-chain capacity: every geopolitical disruption is a “stress test” for China’s manufacturing. In an environment where global uncertainty is increasing, the supply stability provided by China as the “world’s factory” will earn a security premium, and capacity advantages are expected to translate into advantages in the next wave of market share.

Third, the “shock absorber” of counter-cyclical adjustment: the operations of funds of the “national team” type have become more mature. In the current window of abnormal market volatility, its role as a “market stabilizer” may come into play again. With corporate earnings recovering and domestic liquidity remaining reasonably adequate, the full-year win rate for equity assets is still relatively high. Guided by the principle that “price matters more than time,” the current sharp fluctuations may instead provide a golden window for deploying in the second quarter.

(Author: Yi Yunjung; Editor: Bao Fangming)