Investors are increasingly turning to Chinese stocks as an alternative to American ones amid Donald Trump's trade war and fears of a U.S. recession, Reuters reports.
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The Hang Seng Index, Hong Kong's main index that tracks many major Chinese companies, has risen 17% since January, when Trump took office as US president.
By comparison, the S&P 500 has fallen about 9%, shedding $4 trillion in market capitalization since hitting record highs last month.
Trump's unpredictable announcements of tariff hikes and moves to cut federal government spending have called into question the appeal of U.S. stocks, which have outperformed most other global stock markets since 2021.
Investors have changed their stance, moving from a “TINA” (There Is No Alternative to US assets) strategy to a “TIARA” (There Is A Real Alternative) strategy, according to Andy Wong, a Hong Kong-based senior executive at Pictet Asset Management.
Tech stocks, which have risen 29% since the start of 2025 and hit their highest level in three years last week, have been the main driver of China's market rally.
Like many other investors bullish on Chinese stocks, Wong said he sees potential in the technology, defense and consumer sectors.
A key reason for the optimism is that Chinese stocks remain undervalued, trading 30% below their 2021 highs.
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