HONG KONG: China is, once again, the hot topic in the world of business and finance.

A lot of the talk has been happening in the Chinese special administrative region of Hong Kong this week, with corporate executives making the rounds at forums exploring where investors are putting their money to work.

These include a finance symposium held on Wednesday (Mar 26) by the World Economic Forum (WEF), in collaboration with Hong Kong Clearing and Exchanges (HKEX) - one of the largest market operators in the world.

"When I went to World Economic Forum last year, people told me that China is ‘uninvestible’," said Hong Kong Financial Secretary Paul Chan in a fireside chat.

“This year, when I went to this forum, meeting the same fund managers … they are afraid that they have been missing out.”

CHINA ON THE RISE

Investment banks, including Goldman Sachs and Morgan Stanley, have raised their target prices for Chinese stocks, with Goldman estimating that AI adoption could boost earnings growth and potentially attract US$200 billion in inflows.

Last September, Chinese stocks saw their biggest single-day gains in 16 years - a searing rally sparked by a raft of stimulus measures unveiled by authorities in Beijing.

Then in January, Chinese artificial intelligence startup DeepSeek released its latest model, DeepSeek R1. It was a much lower-cost challenger to American-made AI models, including OpenAI's ChatGPT.

This triggered a deep shock, resulting in a sell-off that erased about US$1 trillion in value from technology and energy stocks. Chipmaker Nvidia lost nearly US$600 billion in a record one-day loss for any company on Wall Street.

United States President Donald Trump described it as a “wake-up call” for American companies.

A month later, Chinese President Xi Jinping met with tech leaders, suggesting the costly crackdown on his nation's technology sector had ended.

Attendees included big names behind China's biggest companies, from comeback kid Jack Ma of Alibaba to Huawei's Ren Zhengfei, BYD's Wang Chuanfu, and DeepSeek's Liang Wenfeng.

Earlier this month, promises were then made at the Two Sessions political meetings in Beijing to boost confidence and opportunities for foreign investors.

More recently, Chinese officials rolled out the welcome mat for dozens of foreign CEOs, including Apple's Tim Cook, at the China Development Forum that kicked off on Sunday.

“CHINA IS NEVER OUT”

Fred Hu, who is founder, chairman and CEO of Chinese private investment firm Primavera Capital Group, noted: “China might be down, but (it’s) never out. So now, China's making a strong comeback.

"China is not just the flavour of the moment. Given its sheer size, scale and speed of transformation ... China should be a long-term structural opportunity for global investors,” he told CNA on the sidelines of the WEF symposium on Wednesday.

"China is also the undisputed global leader in the energy transition, in renewables, in EVs, in batteries.

"So for global investors, China becomes ... a very large opportunity for diversification, for seeking growth, for diversification of risks," he added.

About a year ago, Hu had said the idea that Asia’s largest economy cannot be invested in “is intellectually just shallow and lazy”.

Diversification has been a recent key theme among business executives, market analysts and investment advisors.

This is in response to Trump administration's move to slap 10 to 25 per cent tariffs on goods coming from China, Canada and Mexico. It has also imposed tariffs on steel and aluminium imports, and vowed to impose reciprocal levies on all US trade partners from Apr 2.

These changes in the US administration has highlighted the benefits of diversification, said Rishi Kapoor, vice chairman and chief investment officer at Bahrain-based alternative investment firm Investcorp.

"This thing that had been shortchanged for a period of time... the value, the merits of diversification, that's now back to the fore,” he told a panel at the WEF symposium.

OPPORTUNITIES IN CHINA

America’s policy moves are also shifting money flows, said Ziad Chalhoub, chief financial officer of Dubai-based Majid Al Futtaim Holding - a conglomerate that owns and operates shopping malls, retail, and hotel establishments in the Middle East and North Africa.

"I think that emerging markets are going to start to grow back up again, and I think that's going to create a tremendous opportunity for a lot of companies globally, especially within Asia," he added.

Many like James Soutar, a partner at Hong Kong-based Pacat Capital Management, now see opportunities in China.

“It has been apparent to us for some time that Chinese stocks offer a much more compelling fundamental investment case than their Western counterparts,” Soutar told CNA.

He noted that across various sectors, the firm has found that Chinese companies are outperforming their global peers in terms of margin, returns on capital and equity, and in earnings per share growth.

“To top it off, the shares of those Chinese companies are also trading at a significant valuation discount to global peers,” Soutar noted.

“The market has started to recognise those attributes in recent months, but we believe there is still a long way to go.”

Industry players said they are bracing for road bumps, given the current geopolitical climate.

Primavera Capital Group's Hu said tit-for-tat tariffs are a real risk, and that China is vulnerable because it is a trading economy.

"But at the same time, China also has an enormous domestic market and a huge middle-class space,” he noted.

“So if China plays it right to lift up the confidence of average Chinese consumers, if they are willing to spend - domestic demand picks up. That will more than offset whatever the drag caused by tariffs.”

Still, he cautioned that tariffs are bad, especially if they stay in place for the long run.

"I hope the two governments (US and China) will still put the highly charged emotions aside, come to the table to negotiate, to strike a deal; to make sure whatever the tariffs - which are very high - will be here temporarily (and be) lifted in time for each other's mutual interest (and) the world.”