According to Financial Association on March 14 (Editor: Xiaoxiang), on one side is $S&P 500 Index (.SPX.US)$ on Thursday officially entered the technical correction zone of 10%, while on the other side is $SSE Composite Index (000001.SH)$ on Friday, after two and a half months, it soared past the 3,400 points milestone again. Undoubtedly, the "East Rising and West Falling" trend in the global market continues to unfold...

In this regard, many overseas investment bankers said that with the comprehensive trade war launched by President Trump raising concerns about an economic recession, many global investors unexpectedly found a new safe haven: Chinese Stocks.

Some institutional investors mentioned the "irony" of Chinese Stocks and European Stocks in the face of a continuously weakening US stock market—Trump has consistently listed these two regions as geopolitical rivals before and after taking office. However, his series of wavering tariff policies have not made "America great again," but instead have allowed markets like China to regain their former glory.

Ross Mayfield, an investment strategist at Baird in the USA, stated that the pressure exerted by the Trump administration on foreign governments... has, in many cases, actually led to outstanding performance of these countries' (assets).

TINA has become TIARA.

Trump's erratic statements on tariff issues and measures to cut federal spending have clearly shaken many market participants' inherent perceptions of US Stocks. Since 2021, the performance of US Stocks has far exceeded that of most global stock indices.

Andy WONG, a senior Fund manager at Pictet Asset Management in Hong Kong, stated that investors are shifting from believing in "TINA" (There Is No Alternative for US assets) to "TIARA" (There Is A Real Alternative). As investors adapt to this narrative shift, funds will flow out of the previously crowded winning Sector.

Market data shows that since Trump took office in January, Hong Kong$Hang Seng Index (800000.HK)$has accumulated a 17% increase.$Hang Seng TECH Index (800700.HK)$The increase reached approximately 30%. $SSE Composite Index (000001.SH)$ The increase was also about 5%.

The rise in Chinese Stocks is mainly driven by Technology Stocks, with the Hang Seng TECH Index having reached its highest level in over three years last week. Similar to many new bullish investors in Chinese Stocks, Wong sees opportunities in Technology, Defense, and Consumer sectors.

A key reason for this optimism among Institutions is that Chinese Stocks are very cheap— for instance, the Hang Seng Index is still 30% lower than its peak in 2021. According to LSEG, the forward PE of the Hang Seng Index for the next 12 months is approximately 7 times, while the S&P 500 Index is about 20 times.

After the AI startup DeepSeek grandly launched its R1 inference model before the Chinese New Year this year, Chinese Technology Stocks rebounded significantly as investors saw enormous upside potential. Fiscal stimulus policies are also expected to continue boosting Consumer spending, which is another bullish factor.

In contrast, Trump's refusal over the weekend to rule out the possibility of recession for the USA, the world's largest economy, has heightened market concerns. Investors also reacted negatively to the instability of White House decisions, as tariffs on Canada and Mexico were postponed at the last minute.

Additionally, the continuously slowing economic data from the USA raises doubts about whether the country's economic growth can outpace that of other major developed countries for a longer period. Given the overvaluation of the US stock market, it is easily influenced by any fluctuations.

Positively position the Chinese market.

According to industry media interviews with more than a dozen Fund managers and strategists, global funds have rekindled interest in Chinese Stocks, though to some extent at the expense of US Stocks—some funds are pulling out of the US stock market, and there is also capital leaving troubled markets like South Korea and India.

Serene Chen, the sales director for Crediting, Forex, and Emerging Markets at Morgan Stanley, revealed that in the past few weeks, the scale of the US dollar exchanged for the Hong Kong dollar reached a record high, indicating that significant funds are flowing into Hong Kong Stocks, although she did not disclose the specific amounts or time periods.

Gao Yuncheng, a partner and fund manager at one of Asia's largest hedge funds, Jinglin Asset Management, stated that he cleared all his US stock Holdings in early February after DeepSeek emerged. This experienced fund manager also informed investors that he is particularly bullish on Chinese Technology companies and those adapting to changes in Consumer habits.

In his view, with the changing global geopolitical and industrial landscape, the competitive strength of Chinese companies is undergoing a transformation from being significantly undervalued, to gradually being re-recognized, and is expected to attract global funds for reinvestment. He summarized his recent investment insights as "find and Hold China’s ‘MCGF 10’.” The term "MCGF" is actually a term he created, which stands for "Make China Greater Future."

Data from Morgan Stanley shows that after three consecutive months of capital withdrawal, foreign funds had a net purchase of 3.8 billion dollars in Chinese Stocks in February.

Kamal Bhatia, Chief Executive Officer of Principal Asset Management based in New York, stated that long-term investors prefer predictability. Even large mature institutions are unwilling to see fundamental changes in investment logic over three years.

Bhatia revealed that clients are inquiring more about tactical allocation issues, a strategy aimed at capitalizing on trends and economic changes through short-term bets.

Lilian Haag, a senior portfolio manager at DWS, stated, "The past ten days have clearly shown that a regionally diversified asset allocation strategy will ultimately pay off."

Editor/Rocky