The foreign investment 'team' that is optimistic about Chinese assets is constantly growing. Since February, several foreign institutions have raised their ratings on Chinese stocks. Foreign investors generally believe that the market's optimism towards AI and China's breakthroughs in technology, coupled with the just concluded National People's Congress and Chinese People's Political Consultative Conference to solidify the policy tone of stable economic growth, will help steadily increase the valuation of Chinese stocks. Multiple foreign institutions have upgraded the ratings of Chinese stocks, and technological breakthroughs in AI and other areas have supported China's asset revaluation. More and more foreign institutions are optimistic about China. After the sharp decline in the US stock market since March, several foreign institutions have downgraded their US stock ratings. According to Wind Information data, as of March 13th, the Nasdaq index has fallen 11.84% and the S&P 500 index has fallen 5.97% since March. Recently, Citigroup analysts downgraded their US stock rating from "overweight" to "neutral", believing that the growth rate of the US economy in the coming months may not exceed that of other regions in the world. At the same time, Citigroup analysts have upgraded the rating of the Chinese stock market from "neutral" to "overweight". Analysts also believe that even after recent gains, Chinese technology stocks are still relatively "cheap" compared to their global counterparts. HSBC recently downgraded its US stock rating to 'neutral', stating that 'there are better opportunities in other markets'. In mid February of this year, HSBC raised its investment rating for Chinese stocks from "neutral" to "high" in a report. In addition, since February, Morgan Stanley has upgraded the rating of Chinese stocks from "low allocation" to "balanced allocation", while Goldman Sachs still maintains its high allocation recommendation for Hong Kong stocks and A-shares in its latest research report on March 9th. Foreign institutions are not only bullish, but also starting to long Chinese assets. From the perspective of financial trends, overseas passive funds are accelerating their inflow into A-shares. According to a research report by CICC, global fund flow monitoring agency EPFR data shows that as of March 5th, passive funds from overseas have been flowing in for 9 consecutive weeks, and passive foreign capital inflows have accelerated from February 26th to March 5th. The active foreign capital outflow from A-shares was 140 million US dollars, while the passive foreign capital inflow was 570 million US dollars. Overall, the net foreign capital inflow was 430 million US dollars. Since the Spring Festival, China's A-share market has attracted $3 billion in overseas capital inflows. Due to the valuation gap between Chinese and American technology stocks, Asian stock funds and emerging market stock funds have also adjusted some of their positions from the United States to China Kuang Zheng, Chief Investment Officer of HSBC Global Private Banking and Wealth Management China, said. Stabilize the real estate and stock markets to boost investor confidence. The government work report has identified the main economic and policy goals for 2025. Regarding this, Liu Jinjin, Chief China Equity Strategist at Goldman Sachs, believes that China's main economic and policy goals for 2025 reflect a clear signal of the government's tendency to promote growth and low tolerance for systemic risks. Specific support measures for the stock market are also further clarified, which are crucial for anchoring growth expectations and controlling risk premiums. Wang Xinjie, Chief Investment Strategist of Standard Chartered China Wealth Solutions, stated that implementing more proactive fiscal policies will effectively enhance the expected return rate of the entire society and promote the stable development of the stock market. Boosting domestic demand is an urgent task, including the demand for consumption and investment, and it is expected that there will be more policy support for this. By cultivating and strengthening emerging and future industries, stimulating the innovation vitality of the digital economy, the profitability level of related industries can be effectively improved, further enhancing the driving force of economic growth. Meng Lei, China stock strategy analyst at UBS Securities, stated that "stabilizing the real estate and stock markets" has been included for the first time in the overall requirements of the government work report. At the macro policy level, further reserve requirement ratio cuts and interest rate cuts have been implemented, and the fiscal deficit ratio has increased to 4%, all of which have a positive impact on the capital market. The policy focus will further tilt towards boosting consumption and promoting technological innovation, which will help to continue the momentum of China's asset revaluation. Kuang Zheng stated that the Government Work Report emphasizes "vigorously boosting consumption and improving investment efficiency" and "promoting the integrated development of scientific and technological innovation and industrial innovation", focusing on enhancing domestic demand and exploring new growth engines. He expressed support for HSBC's recent decision to upgrade the rating of Chinese stocks and investment grade Chinese offshore US dollar bonds to "high" from an asset allocation perspective. According to data from Wind Information, the MSCI China Index has risen 16.28% since the beginning of this year, indicating an upward potential for the Chinese stock market. Foreign investors believe that with the deepening of the capital market reform, more medium and long-term funds are expected to enter the market, coupled with the improvement of corporate fundamentals, which will further promote the upward trend of Chinese stocks. From a valuation perspective, currently, Chinese stocks still have attractiveness. Kuang Zheng stated that the 12-month P/E ratios of the Hang Seng Index and MSCI China Index are at 11 times and 11.9 times, respectively, still with discounts of 49% and 45% compared to the S&P 500 Index's P/E ratio of 21.5 times. Meng Lei stated that Chinese A-shares are currently discounted by about 20% compared to global emerging markets, but before 2022, A-shares are generally valued at a premium compared to emerging markets. If more overseas investors enter the stock market this year, the discount rate will further narrow, and may even become parity or premium, further opening up the space of the stock market. Since last year, the China Securities Regulatory Commission has taken improving the investment value of listed companies as an important lever, promoting listed companies to strengthen investor returns, and has successively issued guidance and implementation plans in conjunction with relevant parties to promote the entry of medium and long-term funds into the market, continuously promoting the entry of medium and long-term funds into the market. At the press conference on the economic theme of the third session of the 14th National People's Congress held on March 6, Wu Qing, chairman of the CSRC, said that the blocking points of social security, insurance, wealth management and other medium and long-term funds entering the market were opened one by one, and the source of fresh water was constantly introduced. Kuang Zheng stated that regulatory authorities are actively promoting the entry of medium - and long-term funds into the market, requiring public funds to hold A-shares with a circulating market value that will increase by at least 10% annually in the next three years. At the same time, efforts are being made to allocate 30% of the annual premium increase for large state-owned insurance companies to invest in A-shares starting from 2025. This will provide approximately $150 billion in incremental funding for the A-share market, and liquidity in the A-share market will remain abundant. In the future, the improvement of corporate profit margins and the upward adjustment of profit expectations may be important factors driving the further upward trend of Chinese stocks Liu Jinjin believes that A-shares still have the potential to further rise. Currently, technological innovation and domestic demand recovery are still likely to be the main focus of investors' attention Bi Kai, the manager of BlackRock's Excellent Far Eastern Hybrid Fund, told reporters that he is particularly optimistic about investment opportunities with significant long-term growth potential in the field of technological innovation, as well as investment opportunities in the domestic demand direction that are expected to see significant recovery growth in performance by 2025. (New Society)