From exiting U.S. treasuries to betting on East Asian technology innovation: global investment giants are looking to increase their investments in Chinese technology.

According to the latest "Global Sovereign Asset Management Research" released by the American asset management giant Invesco Ltd., global sovereign asset management institutions are showing a significant increase in interest in allocating assets to China. The majority of funds are expected to increase their investments, seizing the opportunity of historic technological change driven by Chinese technology, and are inclined to provide funding support by reducing the size of their holdings of long-term US treasuries. Invesco's survey shows that since the emergence of DeepSeek and Alibaba's launch of open-source AI models with low cost and high performance attributes that shook Silicon Valley and Wall Street, sovereign wealth funds managing approximately $27 trillion in assets are increasingly optimistic about the Chinese technology industry, as they do not want to miss the next wave of super innovation. Among the surveyed global sovereign asset management institutions, the proportion considering China as the second largest economy in the world as a "high priority" or "medium priority" in the next 5 years has increased from 44% last year to 59% this year. Most institutions prefer the "stock market" as the preferred entry path into the Chinese market. Invesco's research covers 83 large sovereign wealth funds and 58 central banks, with a total of approximately $27 trillion in assets under management. The survey shows that sovereign investment institutions are formulating their investment strategies for the Chinese market around specific technology ecosystems, including semiconductors, cloud computing, artificial intelligence, electric vehicles, and renewable energy infrastructure. "Including large sovereign wealth funds from Saudi Arabia, the UAE, and other institutions are increasingly convinced that China holds a leading position in global major technology fields such as artificial intelligence, nuclear fusion, and quantum computing, and they do not want to miss the opportunity," said Martin Frank, CEO of Invesco Asia Pacific (excluding the Japanese market). The increased interest of the world's largest sovereign wealth funds and central banks in investment indicates a significant shift in the market narrative logic surrounding Chinese assets this year. While investors still have concerns about the global economic outlook and potential trade conflicts between China and the United States, the breakthrough in AI technology led by the DeepSeek startup earlier this year has ignited optimism for Chinese tech stocks, driving up the stock prices of Chinese technology companies. The Hang Seng H-Share Index ETF, a trend indicator for Chinese companies listed in Hong Kong, has risen by about 20% so far this year. This optimistic sentiment, driven by the "AI application wave" brought about by DeepSeek, has spread to other technology industries such as humanoid Siasun Robot & Automation, biotechnology, advanced manufacturing, electric vehicles, and other technology sectors. Invesco's survey shows that approximately 78% of surveyed global sovereign asset management institutions expect that China's technology and innovation-driven industries will rank among the top globally in terms of competitiveness. Most traditional asset management institutions surveyed expect to increase their allocation to Chinese assets in the next five years, including 88% of Asian funds and 73% of North American fund management institutions. The most favored areas include digital technology and AI application software, advanced manufacturing and automation, clean energy, and green technology. Fear of missing out on "the next Silicon Valley!" Sovereign wealth funds may flock to China "Sovereign wealth investors managing $27 trillion in assets globally are increasingly optimistic about the Chinese technology industry, as they do not want to miss the next wave of innovation," according to Invesco's annual survey. In the first quarter of 2025 survey of 83 sovereign wealth funds and 58 central banks, 59% of respondents said they viewed China as a high priority or medium priority target for allocation in the next 5 years, far higher than the 44% figure from last year. "There is a 'fear of missing out' (FOMO) bullish sentiment, as the boom in Chinese technology development is seen as the next Silicon Valley," said Rod Ringrow, head of Invesco's official institutions department. "Sovereign assets generally believe that Chinese technology companies will be highly competitive globally in the future, and they want to ensure they are involved now." The survey cited attractive local investment returns as the primary driver of future capital inflows, reflecting investment institutions' confidence in the industry's valuations and profit potential compared to other developed markets such as the United States. The shift, especially in the face of rising tensions in US-China relations. The survey also indicates that this trend comes at the expense of reducing investments in long-term US bond assets due to concerns among institutions about the sustainability of US finances and policy volatility after the passage of the "Build Back Better" bill. Sovereign asset managers are also reevaluating passive index strategies, particularly those focused on US stock ETF exposures. The report also notes that global central banks are building larger, more diversified reserves to mitigate market volatility risks. While the US dollar still dominates, the role of gold and sovereign currencies such as the renminbi as defensive assets is increasing. "Central banks continue to buy gold, in part due to concerns about US financial sanctions," Ringrow said. "Gold is a core component of reserves, not only because of its inflation resistance, but also because it is less likely to be confiscated or easily isolated by other institutions." Ringrow stated that market surveys show that many US asset management institutions are bullish on China, targeting sectors in which China is expected to take a leading global position in technology fields supported by market momentum and strategic policy. This means that sovereign investment institutions and traditional asset management giants are formulating their investment strategies for the Chinese market around specific technology ecosystems, rather than relying on broad macro exposures. The report highlights ecosystems including semiconductors, cloud computing, artificial intelligence, electric vehicles, and renewable energy infrastructure. Invesco quoted a leader of a sovereign wealth fund in the Middle East as saying that China is likely to dominate the solar energy, wind energy, electric vehicle, and battery markets in the coming decades. An investment strategist from the Asia-Pacific region stated that due to the actual resources and policy support invested by the Chinese authorities, it is only a matter of time before China overtakes the United States in cutting-edge technology fields such as semiconductors, cloud computing, and artificial intelligence. "The Chinese can be briefly summarized as saying they have such a great product as the 'AI model of all AI' and that they have the ability to replace all those. They are more and more innovative and really want to push the US aside," said Frank. "The Chinese can summarize that they have the 'AI model of all AI' and they really want to push the US aside," Frank said. "The Chinese can summarize that they have the 'AI model of all AI' and they really want to push the US aside," Frank said. "The Chinese can summarize that they have the 'AI model of all AI' and they really want to push the US aside," Frank said. "The Chinese can summarize that they have the 'AI model of all AI' and they really want to push the US aside," Frank said. "The Chinese can summarize that they have the 'AI model of all AI' and they really want to push the US aside," Frank said. "The Chinese can summarize that they have the 'AI model of all AI' and they really want to push the US aside," Frank said. "The Chinese can summarize that they have the 'AI model of all AI' and they really want to push the US aside," Frank said. "The Chinese can summarize that they have the 'AI model of all AI' and they really want to push the US aside," Frank said.