Recent geopolitical and technological shifts have created strong tailwinds for Chinese stocks with notable exposure to the AI sector. While the Nasdaq has delivered a modest +2.7% YTD, the China Tech Index has surged by +22.9%. The overarching narrative remains the ongoing rivalry for global dominance between the world's two largest economies. However, investors are primarily focused on near-term returns. It is well known that the U.S. stock market often outperforms the broader U.S. economy, largely due to two key factors: liquidity injections and the soaring demand for AI-driven stocks. Consequently, the U.S. is unlikely to permit Chinese AI stocks easy access to its capital markets.
