BEIJING — China's rapid advancements in the artificial intelligence sector, exemplified by DeepSeek, a cost-competitive newcomer among global AI models, have captured global attention and driven capital inflows into the country's sci-tech capital market.

Since February, following Deutsche Bank's high-profile report declaring that "2025 is the year the investing world realizes China is outcompeting the rest of the world", several international investment banks have upgraded their ratings or raised target prices for the Chinese capital market.

Citi recently upgraded its rating for Chinese stocks to overweight. Chinese shares look attractive even after their recent rally, Citi strategists wrote, citing DeepSeek's AI technology breakthrough, the government's support for the tech sector and "still-cheap valuations".

Goldman Sachs anticipates that the widespread adoption of AI over the next decade could boost the overall earnings of Chinese stocks by 2.5 percent annually. It has also raised its targets for the MSCI China Index and CSI 300 Index to 85 and 4,700, respectively, signaling potential double-digit growth for both indexes over the next year.

CITIC Securities described the current moment as a "pivotal historic opportunity" for global capital to invest in the Chinese stock market. The widespread application of AI across industries has significantly improved the efficiency and profitability of China's real economy.

During China's annual two sessions earlier this month, the rise of DeepSeek and its global impact became a focal point. Wu Qing, head of the China Securities Regulatory Commission, emphasized that DeepSeek's success has not only impressed the global AI industry but also redefined the world's perception of China's capabilities in technological innovation.

This achievement has driven a revaluation of Chinese assets, he noted. China will support the development of sci-tech innovation enterprises — both listed and those in the pipeline — to further enhance the appeal and investment value of the Chinese stock market, according to the CSRC.

"We are optimistic about the medium-term prospects for Chinese equities," stated Morningstar Investment Management research teams in their 2025 Outlook.

They expect stimulus measures initiated in 2024 to continue evolving, while citing a more benign regulatory backdrop, expectations of moderate earnings growth from Chinese companies, and a positive outlook on several of the major technology firms as consumers regain their footing.

Xinhua