Changpeng Wan
The Perfect Storm Igniting Chinese Assets
The gravitational forces aligning behind Chinese equities created an extraordinary market phenomenon this week. Hong Kong’s benchmark Hang Seng Index surged 1.60% to its highest level since March, while tech stocks rocketed even higher with the Hang Seng Tech Index gaining 2.80%. This synchronised rally didn’t happen in isolation – NVIDIA’s sudden announcement of US approval for its China-specific H20 AI chips acted as rocket fuel for computing stocks. Meanwhile, Alibaba’s unprecedented $380 billion commitment to AI infrastructure signaled Chinese tech giants are going all-in on artificial intelligence. Together, these developments have unleashed what analysts are calling ‘the great Chinese asset surge’ – a convergence of pent-up demand, regulatory breakthroughs and historic capital deployment.
Market Mechanics: Anatomy of a Rally
Thursday’s trading revealed fascinating dynamics:
- Hong Kong market turnover exploded to HK$288 billion – highest since January dry spell ended
- US pre-market gains across NASDAQ Golden Dragon China Index (up 3.2%)
- Alibaba (NYSE:BABA) US pre-market surge: +6%
- Computing specialists like Kingsoft Cloud +15%, GDS Holdings +12%
Computing Power Drives Cross-Market Momentum
‘This rally wasn’t speculative – it rode concrete fundamentals,’ notes Phoenix Capital analyst David Li (李大卫). AI infrastructure stocks dominated gains across both Hong Kong and mainland markets with optoelectronic components (CPO), data centers and cloud computing leading the charge.
NVIDIA’s H20 Chip: The Catalyst
US restrictions lifting unleashed pent-up demand:
- H20 chip targeted exclusively for Chinese market
- Based on Hopper architecture with CoWoS packaging
- Specialized for vertical model training/inference (though inadequate for trillion-parameter models)
NVIDIA CEO Jensen Huang (黄仁勋) confirmed shipments would resume immediately: ‘Government approval clears the path for H20 shipments. We’re also launching RTX Pro cards specially created for AI applications.’ Analysts project NVIDIA’s move alone could alleviate 40% of China’s compute shortage within six months.
Domestic Winners Lighting Up Boards
Kingsoft Cloud (+15%), GDS Holdings (+12%) and VST ECS (+10%) emerged as immediate beneficiaries alongside Alibaba’s 7% jump. Open Source Securities forecasts expanding gains across China’s entire AI industrial chain now that NVIDIA’s restricted chips alleviate supply bottlenecks.
Global AI Renaissance Sparks Demand
Three developments reignited the growth narrative:
Breakthrough Capitalization Thresholds
NVIDIA crossing $4 trillion market value psychologically validated AI infrastructure investments globally. Broadcom’s simultaneous record highs signaled sector-wide momentum.
Elon Musk Ups Ante With Grok-4
‘Doctorate-level reasoning capabilities’ claimed for Tesla’s new AI model integration promises advancements in autonomous driving and robotics through Tesla Dojo supercomputer integration.
Alibaba’s $380 Billion Gambit
The Chinese tech leader’s shareholder letter confirmed seismic shifts:
- ‘AI+Cloud’ positioned as primary growth driver
- Three-year investment plan exceeding total 2014-2024 cloud spend
- Prioritizing infrastructure, foundational models and business transformation
Evidence surfaced in their FY2025 results – double-digit cloud revenue growth with AI services delivering seven consecutive quarters of triple-digit expansion.
Where Capital Flows Next
CICC analyst Helen Wang (王海伦) identifies four investment vectors:
- North America’s compute suppliers trading below historical valuations
- Secondary beneficiaries absorbing outsourced demand
- Specialist component manufacturers
- 1.6T optical modules/CPO supply chain
The Computing Infrastructure Imperative
Great Wall Securities emphasizes how intelligent computing centers now function as critical national infrastructure: ‘These facilities aren’t luxury projects – they’re economic accelerators enabling everything from healthcare AI to manufacturing automation’. The validation’s evident in municipal budgets: 23 Chinese provinces now include compute center funding.
Sustaining Momentum Beyond the Surge
The Chinese asset surge represents more than temporary excitement – it’s validation of structural transformation:
- Compute power transitioning from trade battleground to economic cornerstone
- $38 billion+ annual R&D commitments reshaping tech capabilities
- Commercial AI applications outpacing theoretical research
For investors, the path forward involves:
- Tracking domestic chip substitution progress monthly
- Monitoring quarterly enterprise AI adoption rates
- Assessing how quickly computing costs decrease relative to output
The companies winning this new era won’t just ride waves – they’ll build the dams directing where ‘Chinese asset surge’ energy flows next. Now is precisely the moment for decisive evaluation of your portfolio’s tech infrastructure exposure.
