China's Crack: A New Variable in the AI and Semiconductor Hegemony Race

Summary

Kim Kyung-hwan, Team Leader at Hana Securities Research Center, analyzes China's growing role in AI and semiconductor competition. He highlights extreme fund concentration in Chinese tech, massive government-driven capex in new economy sectors, and recommends buying Chinese semiconductor equipment stocks while monitoring CXMT's potential inclusion in the STAR 50 index. He also argues that Korean market fears of Chinese competition are overblown and that China's internal capital rotation is fueling its own tech ecosystem.

• Chinese equity funds have allocated a historic 43% to electronics, signaling a strong tech focus.
• Government-backed IPOs are driving capital into new economy sectors like semiconductor equipment, aerospace, and robotics.
• China's new economy capex is rising rapidly, while traditional bank lending stagnates.
• CXMT's possible STAR 50 index inclusion in December could attract passive and pension fund inflows.
• The speaker recommends buying Chinese semiconductor equipment stocks and monitoring CXMT.
• China's yuan strength stems from internal dollar selling, and export competitiveness remains high.
• Korean market sell-off on China fears was sentiment-driven; Chinese tech managers face similar domestic pressures.