The Hang Seng China Enterprises Index jumped 4.1% on Friday to hit the highest since February 2022 — surpassing an October peak spurred by a stimulus blitz. Gains in Alibaba Group Holding Ltd., the biggest boost to the gauge, accelerated in the afternoon session after Bloomberg News reported that its co-founder Jack Ma and other prominent entrepreneurs were invited to meet the nation’s top leaders.
“The Xi-Ma news gave the market another kick and prompted people to look at this ‘widely shunned’ space — Chinese Internet,” said Jian Shi Cortesi, a portfolio manager at Gam Investment Management in Zurich. “Either we see a sustained rally this time, or the government will keep trying until we see that rally.”
The meeting, which President Xi Jinping is expected to attend, has the potential to send a powerful signal that China’s Communist Party is adopting a more supportive stance toward private-sector companies that fuel most of the country’s economic growth. It is likely to take place as soon as next week and may include DeepSeek founder Liang Wenfeng, said people familiar with the matter.
Enthusiasm for the nation’s technology shares has deepened as China is fast catching up with the global AI frenzy after missing out in the past few years. AI startup DeepSeek’s prowess has served as a wake-up call for investors who underestimated the nation’s growth potential in the sector, and led to a broader re-evaluation of the beaten-down equity market.
The DeepSeek revelation “is a reflection that China is making progress on its new productive forces and self sufficiency goals,” said Marvin Chen, a Bloomberg Intelligence strategist. “The tech momentum may carry the market into March,” when attention turns to the Two Sessions meeting and corporate earnings as the next driver, he added.Shares of Tencent Holdings Ltd. were also boosted in the rally, which in turn helped lift its major stakeholder Naspers Ltd. to its highest level on record in South Africa on Friday.Adding to the wave of optimism are signs that Donald Trump’s tariffs on Chinese products — 10% in the initial offensive — may turn out to be less drastic than feared.
Mainland investors have been snapping up Hong Kong shares as the rally extended. They bought HK$7.7 billion ($989 million) of the city’s equities on a net basis on Friday after selling the previous day.
While global money managers have been burnt by the Chinese market’s ups and downs over the past few years, some now see the odds of a more durable rally this time around.
Deutsche Bank called the ongoing tech progress a “Sputnik moment” for the country, while a trader note by Goldman Sachs Group Inc. said hedge funds are purchasing Chinese shares in large chunks, driven almost entirely by long buys.
But skeptics worry that the AI buzz may have taken the rally too far, with stocks that announce any cooperation with DeepSeek seeing knee-jerk gains.
“At the end of the day, you don’t really know what the potential monetization opportunities are over the medium to longer term,” Helen Zhu, chief investment officer for NF Trinity, said in a Bloomberg TV interview. There’s “potential uncertainty on whether what DeepSeek has been able to do can be repeated,” she added.
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Bulls are hoping Beijing will unleash further stimulus at the Two Sessions — the annual meetings of China’s top legislative and advisory bodies — helping to sustain the market’s upward trend. Added policy support is crucial with the property sector still struggling and the economy remaining lackluster.
The Hang Sang China Enterprises Index has gained 14% so far in 2025, making it the best performer in Asia.
