According to Dahe Cai Cube News, on the evening of September 11 Beijing time, after the U.S. stock market opened, Chinese assets experienced a full-scale surge. The Nasdaq Golden Dragon China Index once soared nearly 3%, and by the close, it had gained 2.89%.
Popular Chinese concept stocks collectively rose sharply. By the close, Century Internet surged nearly 15%, GDS Holdings gained nearly 15%, Zai Lab rose over 14%, Alibaba jumped nearly 8%, BeiGene, NIO, and Tuya Smart each gained over 6%, Kingsoft Cloud increased over 5%, Trip.com Group, JD.com, and Baidu each rose over 3%, while NetEase, Futu Holdings, XPeng Motors, and others gained over 2%.
Morgan Stanley stated in its latest report that U.S. investors' attention to the Chinese market has reached its highest level since 2021.
Professor Li Huihui of Management Practice at École de Management de Lyon recently analyzed in an interview with 21st Century Business Herald that this round of rebound in Chinese assets is driven by the mutual reinforcement of three pillars: external factors, internal factors, and micro factors.
First, the weakening U.S. dollar and the Federal Reserve's entry into the "eve" of interest rate cuts have simultaneously reduced the discount rates and risk premiums of non-U.S. assets, leading to capital flowing back into emerging markets, which benefits Chinese concept stocks primarily represented by ADRs.
Second, China's policy mix has shifted toward "stabilizing expectations, stabilizing cash flow, and stabilizing capital returns." Regulators are encouraging dividends and buybacks, with central state-owned enterprises and large platform companies increasing shareholder returns, thereby repairing the long-discounted corporate governance premium. The surge in buybacks by Chinese companies so far this year is evidence of this.
Third, the marginal improvement in the profitability of leading companies, especially the better-than-expected Q2 reports of some overseas-expanding and platform economy companies, has offset weak domestic demand, forming a fundamental foundation.
In the short term, Li Huihui predicts that the Nasdaq Golden Dragon China Index may enter a phase of "stepwise increase + high volatility." Against the backdrop of a weak U.S. dollar and the first interest rate cut, there is still a probability of the index reaching 8,500 to 9,000 points, but pullbacks will become more frequent due to options unwinding and event-driven disturbances. The key to whether the index can achieve a second phase of gains in the medium term does not lie in capital flows but in fundamental, macro, and micro aspects. In terms of interest rate differentials, focus on the pace of the Fed's rate cuts and the path of the U.S. dollar; in terms of gains, focus on the sustainability of profits from leading companies, including platforms, e-commerce expansion overseas, and AI application realization; in terms of institutional factors, focus on the "steady stream" of dividends, buybacks, and capital market reforms, rather than one-time impacts.
Wang Xinjie, Chief Investment Strategist of Standard Chartered China's Wealth Solutions Department, expects that more catalysts will further enhance the value of Chinese assets in the future. Currently, the proportion of overseas capital allocated to China remains low, and the trend of buying into China will continue. As the narrative of "American exceptionalism" continues to converge, global investors' consensus on allocating to Chinese assets increases; potential changes in excessive savings may also occur.
