Global investors bullish on China's tech sector

Global investors remain optimistic about China's technology sector, citing attractive market valuations and continued advances in artificial intelligence, while stressing that careful stock selection remains key.

The UBS Chief Investment Office stated Wednesday that China's policy support is accelerating rotation within the technology sector. It noted China's plans to invest roughly 2 trillion yuan ($295 billion) over the next five years to build a nationwide network of AI data centers, with the goal of sourcing at least 80 percent of its core infrastructure, including AI chips, from domestic suppliers.

"This should support demand in areas such as semiconductor equipment, foundry services, packaging and testing, as well as servers, memory and networking equipment," the UBS statement read.

"We believe this suggests that the current trend is more likely to be a structural uptrend rather than a mere cyclical rebound."

Within the global AI landscape, UBS is bullish on Chinese semiconductor equipment manufacturers and semiconductor companies — its top two priority sub-sectors within the Chinese technology sector — followed by hardware. The bank believes these sectors should continue to benefit from increased investment in AI infrastructure and the policy-driven trend toward domestic substitution.

In a report released on June 19, Standard Chartered's wealth solutions global chief investment office said it favors China for the valuation re-rating potential.

"China continues to be attractively valued, as tech innovation there keeps up with AI developments. The country's 15th Five-Year Plan (2026-30) has identified 'AI plus' as a priority, empowering all sectors of the economy," said David Leung, head of wealth solutions at Standard Chartered China.

"At the same time, China's successful shift toward renewable energy in recent years, combined with ample energy capacity, provides a reliable energy supply for data centers — which consume vast amounts of electricity — thereby giving the country a competitive edge in the AI race," Leung added.

Standard Chartered is shifting to a more pro-risk stance in China, given the broader market re-rating potential. Technology and communication services remain overweight, driven by domestic chip self-reliance and AI monetization.

According to the report, utilities has been upgraded to neutral on improving power demand dynamics and policy support.