iQiyi Inc. (IQ), a leading Chinese online entertainment service provider, witnessed a significant pre-market surge of 5.26% on Wednesday. This upward movement can be attributed to the broader rally in Chinese American Depositary Receipts (ADRs) and Exchange-Traded Funds (ETFs) observed in overnight trading.

The Chinese tech sector has regained favor among global investors, as a correction in major US tech stocks has prompted a rotation towards their Chinese counterparts, which trade at relatively cheaper valuations. Analysts suggest this rebalancing trend is driven by the valuation edge that China's markets offer compared to other key global stock markets.

Investor optimism has been fueled by expectations that Beijing will allocate more resources this year to support innovation and technological breakthroughs, amid the ongoing China-US rivalry. Premier Li Qiang's recent visit to the nation's largest state-owned telecoms operators, where he called for more technological advancements, further reinforced this sentiment.