China's technology shares are sizzling. Just ask South Korean investors

This year's breakthrough in AI development by Hangzhou-based DeepSeek is apparently having a deep impact on foreign interest in Chinese equities perceived to be good bets on the nation's commitment to cutting-edge technologies.

As New York's Nasdaq market for technology shares tanks into correction territory, foreign investors are flocking to dazzling prospects in Chinese sectors such as artificial intelligence, electric vehicles and semiconductors.

China's investment aura was perhaps enhanced last week by comments from Foreign Minister Wang Yi, who portrayed China as an "anchor of stability" in a world of tensions created by US tariff and geopolitical policies. Many investors apparently agree with him.

"China's tech share sector has been booming since the start of this year, beginning with the rise of new concepts fostered by star company DeepSeek," Haitong Securities said in a note. "Investor confidence has also been boosted by the government's stated focus on the sector."

Foreign investment banks, including Goldman Saches and Morgan Stanley have issued optimistic reports on investing in China markets, citing technological breakthroughs.

Look no further than South Korea to see the trend lines.

Investors in that nation have increased their portfolios of Chinese shares, particularly tech-related stocks. Trading value hit a 30-month high of US$782 million in February, according to the Korea Securities Depository & Clearing Corp.

Korean trading in China's mainland and Kong Hong bourses increased almost threefold from January, exceeding transactions in European and Japanese shares.

Indeed, six of the top 10 overseas stocks purchased by South Korean investors between February 17 and February 28 were tech-related Chinese equities in electric vehicles, AI and semiconductors.

The most popular stock, according to the South Korean report, was Xiaomi Corp, a consumer electronics brand that has successfully expanded into electric automaking. Xiaomi posted a net trading value of US$72.4 million, followed by electric vehicle maker BYD and Hong Kong-listed Alibaba, one of the world's largest e-retailers and a big player in artificial intelligence.

While South Korean investors were snapping up Chinese shares, their home market was lackluster. The Korean Composite Stock Price Index has risen less than 2 percent since February.

By contrast, Shanghai's STAR 50 Index, which is primarily geared to science and technology companies, has risen over 15 percent, and the Hang Seng Tech Index soared 43 percent increase, far exceeding the performance of other indices.

Edward Cole, an analyst with alternative investment firm Man Group Plc, said the Chinese stock market is well on its way to becoming the most "convincing" market of 2025.

"Compared with other major markets, the valuation of China's stock market is still at a low," Cole said. "The gap offers foreign investors a high safety margin and potential returns."