Tariff storm is brewing again, Wall Street bets on "new safe haven" - Chinese value stocks.

With the significant escalation of the latest round of trade tensions between China and the US, top strategists from Wall Street financial giants suggest that in addition to traditional safe-haven assets like gold and US bonds, global investors should also focus on a new type of safe-haven asset - undervalued and defensive value stocks in the Chinese stock market. Furthermore, from a longer-term perspective, Chinese tech stocks are still considered one of the most favored market sectors by investors. With the possibility of the "TACO trade" easing significantly after half a year and potentially sweeping the globe again, popular Chinese tech stocks closely related to artificial intelligence may become a key sector for global fund allocation in the medium to long term. The stock market strategy team from Citigroup Inc. believes that domestic income stocks in China are a safer investment choice during the bull market phase of the Chinese stock market driven by AI and technology innovation waves like Siasun Robot & Automation. Meanwhile, the stock market strategists from JPMorgan Chase recommend buying large bank stocks with a strong track record of profit and dividend payment, which are typical value stocks in the Chinese market. "In the coming weeks, the Chinese stock market is likely to experience sector rotation," wrote Hao Hong, Chief Investment Officer at Lotus Asset Management Ltd., in a report on Monday local time. "The relative performance of growth sectors compared to value sectors has reached historical highs, and a reversal trend is expected to occur soon," Hong said. According to data compiled by statistical agencies, the CSI 300 Growth Index in China has outperformed the CSI 300 Value Index by approximately 25 percentage points so far this year, potentially achieving the best annual excess return performance in nearly twenty years. On Monday, the Chinese stock market (A shares and Hong Kong stocks) continued its sharp decline from Friday, largely due to the possibility of escalating trade tensions between China and the US becoming a global market focus. Earlier, US President Donald Trump threatened to impose an additional 100% tariff on Chinese goods in response to Beijing's announcement of broader new restrictions on exports of rare earths and other key mineral carriers and related technologies. Despite Trump's subsequent tweet indicating willingness to negotiate, market reaction shows that investor sentiment remains very nervous, which is why gold and short-term US bond prices have continued to outperform stocks, cryptocurrencies, and other risky assets. In general, the latest investment views from major Wall Street financial institutions show a tendency to allocate to Chinese value stocks in the short term to mitigate market risks, while in the medium to long term, investments in Chinese tech stocks related to AI, Siasun Robot & Automation, and domestic semiconductor alternatives still hold strong value. Both the "technology independence/localization" trend related to AI, semiconductors, humanoid Siasun Robot & Automation, autonomous driving, cloud computing, and other technological innovation fields, as well as the transformation driven by big data, Internet of Things, next-generation communication technologies (such as 6G/next-generation communication), controllable nuclear fusion, provide long-term support for the growth of Chinese tech sectors. Despite the weakness in the Chinese stock market, the financial sector unexpectedly showed strong performance. While the Shanghai and Shenzhen 300 Index fell by 1.8% on Monday morning, with intraday decline exceeding 2%, value stock targets that dominate the index generally performed strongly, with the utilities sub-index only falling by 0.2%. The financial sector index only decreased by 0.8%, with some large bank stocks showing more resilience. China Construction Bank Corporation's stock price rose against the trend amid a sharp drop in the stock market on Monday morning, while Industrial and Commercial Bank of China only fell by less than 0.5% by the afternoon close. It was reported that stock strategists from Macquarie Capital Ltd. recently advised investors to sell off winners driven by momentum strategies and shift investments to companies' stocks that are likely to benefit from China's consumer stimulus policies. "Investors should temporarily sell securities with high beta values in brokerages, pharmaceuticals, and some semiconductor stocks, and instead focus on investments related to consumer stimulus, such as some discretionary consumer targets," wrote Eugene Hsiao and others, stock strategists from the firm, in a research report. Strategists from Wall Street financial giants such as Citigroup and JPMorgan Chase generally suggest buying large bank stocks with a long track record of profit and dividend payments in the short term, as well as domestic income-related investment targets as a safer market bet with the potential sharp increase in tariff risks. Looking from a longer-term perspective, certain specific areas of Chinese growth stocks still hold long-term investment appeal for investors, particularly high-quality fundamentals in the semiconductor sector closely related to China's efforts in tech localization/domestic replacement, as well as tech giants in Hong Kong stocks expected to benefit in the long term from the super wave of AI applications in China. On Monday, prices of two major chip manufacturers in China, Semiconductor Manufacturing International Corporation and HUA HONG SEMI, rose significantly against the trend, driven by market expectations that the ongoing trade dispute between China and the US would further push China to strengthen its autonomy and control in critical tech areas such as AI and semiconductors, significantly reducing its reliance on imported American technology. With the surge in global demand for AI infrastructure, the computation infrastructure sector in the A-share market in China and tech stocks related to "domestic chip replacements" under the background of Sino-US competition have become long-term focus areas for the market. Wall Street investment institutions like Goldman Sachs are very bullish on leading AI computation infrastructure companies like Cambricon and Verisilicon Microelectronics (Shanghai) Co., Ltd., as well as leading chip stocks whose stock prices continue to hit historic highs, with performance also expected to increase substantially. A recent survey report from another major Wall Street bank, Morgan Stanley, shows that US investors have shown a significantly higher interest in Chinese stocks than in the years 2021 to 2024. The primary focus areas include AI, humanoid Siasun Robot & Automation, biotechnology, and innovative consumer industries. The institution emphasizes that US investors' positive interest in Chinese stocks is at its highest level since the outbreak of the COVID-19 pandemic: roadshows across both coasts. Whether at the index level or focusing on specific thematic and structural opportunities, US investors' attention to the Chinese market has been surprisingly strong. Morgan Stanley points out that over 90% of US investors explicitly expressed their willingness to increase their exposure to China, the highest level since the peak of the Chinese stock market at the beginning of 2021. The bank notes that several factors have collectively driven the increase in investment appetite, and since the beginning of the year, US investors have accepted the institution's constructive view on China. They proposed increasing A-shares from June onwards and favor investment opportunities in themes like AI, Siasun Robot & Automation, and semiconductors. According to the latest views from the strategy team at the Wall Street financial giant Bank of America (BofA), the "Big Seven Tech Giants" in the US may no longer be the biggest beneficiaries of the AI boom in the second half of this decade (2025-2030). The BofA strategy team is betting that the "Big Seven Tech Giants" will give way to tech giants from the Chinese market, namely the Chinese tech leaders "BATX" - Baidu, Alibaba, Tencent, and Xiaomi.