As geopolitical tensions, diverging economic policies and rapid advances in artificial intelligence reshape global markets, senior economists said that Chinese assets are emerging as a key anchor, with the country's cost-effective AI ecosystem well positioned to support a new round of manufacturing upgrading.
With China pushing ahead with financial opening-up, economists said the case for including Chinese assets in global portfolios is likely to strengthen further, even as US equities continue to play an important role in global asset allocation.
Despite persistent uncertainty, global cross-border capital continued to expand in 2025, with the United States, the United Kingdom and China remaining among the world's major destinations for international capital, said Zhang Xiaoyan, associate dean at Tsinghua University's PBC School of Finance.
"The core logic of global capital allocation is simple: Investors seek better returns with lower risks," Zhang said. "Chinese assets could offer both."
On the return side, Zhang pointed to strong growth potential in China's emerging sectors such as digital technology and software, advanced manufacturing, automation, clean energy and green tech. In terms of risks, Chinese assets have low correlation with European and US markets, making them "effective diversifiers", she added.
In particular, the AI revolution is a key driver of the shifting global investment landscape.
Despite mounting risks from geopolitics, tariffs, energy shocks and inflation, new opportunities are emerging in AI infrastructure, energy transition and supply chain restructuring, said Shane Zhang, chairman of Morgan Stanley Securities (China).
Zhang said that Asia, and China especially, may be entering what he described as an investment- and manufacturing-led "super cycle". "China's supply chain resilience, high-end manufacturing, materials and AI industrial chain are drawing growing international attention," he added.
Dismissing AI bubble fears, he highlighted China's cost advantage, noting that achieving comparable model inference performance — the point at which a trained AI model processes new data in real time and produces output — in the country costs just 15 to 20 percent of the figure for the US. "That will drive broader AI adoption across China's economy," he added.
Miao Yanliang, chief strategist at China International Capital Corp, also said the AI revolution is no speculative bubble so far. "The technology is indeed boosting productivity, there's no heavy use of leverage, and valuations are not excessive by historical standards."
Miao said the adoption of AI is approaching an inflection point where gradual growth turns to exponential acceleration. "The winner won't be just one; it could be both China and the US, and the rest of the world could also benefit from this technological revolution," he added.
In the new landscape, investors can no longer rely on a single anchor. The US remains a vital component, but ignoring China is no longer an option, according to economists.
"Global capital is moving from an overweight position in US assets toward more diversified allocation," Miao said, noting that China's current weighting in global portfolios remains below the country's economic strength and corporate performance.
As central banks diversify reserves and investors seek alternatives to dollar-centric holdings, renminbi-denominated assets are gaining attention, Miao said, adding that China's continued financial opening and the steady internationalization of its currency support this shift.
China's financial opening is gathering pace, with easier market access for qualified foreign institutional investors and improved cross-border investment mechanisms, which is expected to give Chinese assets more weight in global portfolios, experts said.
"Investors need to adapt their strategies to changing market environments," said Zhang Xiaoyan, the Tsinghua associate dean. "With China's high-level opening-up and the implementation of favorable policies, the domestic capital market will welcome more development opportunities, offering long-term investment potential for investors at home and abroad."
Despite the growing appeal of Chinese assets for global investors, economists said the pace and momentum of domestic demand recovery remain a key factor for investors to watch.
Chinese enterprises' innovation and production capabilities are highly competitive, said S&P Global Ratings' Asia-Pacific chief economist Louis Kuijs, noting that the challenge lies in domestic demand and consumption.
In Kuijs' view, stimulating consumption hinges on addressing households' worries about income and job stability, and increasing the availability of public services such as healthcare and education for the country's urban migrant population.
