Global Institutions Bullish on Chinese Assets Amid DeepSeek Launch and Market Recovery

 

Major global institutions, including Goldman Sachs, Bank of America, and Deutsche Bank, have recently expressed a positive outlook on Chinese assets, signaling a potential revaluation. Deutsche Bank highlighted that with the successful launch of DeepSeek, China's dominance in high-value industries and global supply chains is expanding at an unprecedented pace. The bank predicts that 2025 will mark the rise of Chinese companies on the global stage, potentially eliminating the valuation gap in Chinese equities.

 

Goldman Sachs emphasized that DeepSeek and other Chinese AI innovations have shifted focus from infrastructure to software applications in the AI sector. According to its analysis, software technology accounts for 37% of earnings in the MSCI China Index and 32% of its market value. Goldman forecasts a 14% potential rise in the index by the end of 2025, driven by supportive policies and around 7% corporate earnings growth, expecting the price-to-earnings ratio to reach a balanced level of 11x.

 

Meanwhile, HSBC believes DeepSeek represents a breakthrough for China’s large language models, marking a step toward advanced reasoning capabilities. This milestone may prompt a global reassessment of China’s innovative strength, especially in digital communication, semiconductors, and new energy technologies.

 

Bank of America predicts a relative decline in U.S. market leadership, recommending an increased allocation to Chinese stocks as trade and tech tensions ease. Similarly, BlackRock described Chinese equities as still being undervalued, noting that consistent policy support could attract more foreign capital back into the market.