Thanks to DeepSeek, the Chinese Stock Market is Revitalized... Will the Departed Investment Return?

Korea Economic Daily

Summary

Thanks to DeepSeek, the Chinese stock market has regained vitality, with high expectations for the growth of the AI industry.
Bloomberg News reported that DeepSeek will act as a catalyst for global funds to return to the Chinese stock market.
Chinese authorities have announced their intention to support the capital market through accommodative financial policies.

Thanks to the Chinese AI startup DeepSeek, the Chinese stock market is regaining its vitality. Although there is a growing movement from various countries to contain DeepSeek, which has showcased low-cost, high-performance capabilities, it is acting as a boon for the Chinese stock market.

On the 7th, the Shanghai Composite Index closed at 3,303.67, up 1.01% from the previous trading day. Despite various international issues during the holiday period, the Shanghai Composite Index showed an upward trend in the reopening week. Before the market reopened on the 5th after the Chinese New Year holiday, investors were quite anxious. However, once the market opened, the response to China's innovation potential confirmed by DeepSeek was greater than the concerns over the tariff war with the United States.

In particular, as expectations for the growth of the Chinese AI industry increased, funds continued to flow into AI-related stocks. Financial companies like Hapo Fund Management have rushed to predict that "the Chinese AI industry will enter a period of prosperity this year."

As a result, there is analysis that the sluggish Chinese stock market since 2022 will quickly normalize this year. This is based on the judgment that the gap between the U.S. and China in advanced fields will narrow with the emergence of DeepSeek, and the investment perception of Chinese big tech companies will change positively.

In this regard, Bloomberg News stated, "DeepSeek will act as a catalyst for global funds to return to the Chinese stock market," adding, "Chinese companies have introduced innovative products in various fields but have not been recognized."

Meanwhile, on the 10th, China's new loans for January will be announced. According to the People's Bank of China, new yuan loans in December last year exceeded market expectations. The Chinese authorities also stated their position to implement appropriately accommodative financial policies and support the capital market.

Beijing = Kim Eun-jung, Correspondent kej@hankyung.com