Global investors are reassessing China’s stock markets, with equity issuance by Chinese firms reaching US$16.8 billion in the first quarter of 2025. This marks a 119% increase compared to the same period last year, according to data from LSEG.

The Hang Seng Index in Hong Kong has increased by 21% this year, making it the best-performing benchmark among international indices.

Additionally, the MSCI China Index’s 12-month price-to-earnings (P/E) ratio is 11.7. This is notably lower than the MSCI U.S. Index at 20.3 and the S&P 500 at 20.5, indicating potentially attractive valuations.

James Wang, head of Asia ex-Japan Equity Capital Markets at Goldman Sachs, said that investor sentiment is changing. Many investors now view China as a market of opportunities, despite ongoing risks. He noted that the presence of long-only investors is growing.

Eased regulatory pressures on China’s tech sector have been a significant factor in attracting investors. A recent summit led by President Xi Jinping with technology leaders indicated a softer approach to regulation.