Korean Funds Pouring into China for Safe-Haven Purposes, A-Shares and Hong Kong Stocks Both Receiving Additional Positions, Safety Premium Emerging

Caixin March 19 News (Reporter Li Di) Recently, international situations have been volatile, with fluctuations in many countries’ capital markets intensifying. Global investors are seeking safe-haven assets.

Due to the needs of prudent allocation and capital risk aversion, since the outbreak of the Middle East conflict, South Korean investors have shown a net buying trend in Chinese A-shares and Hong Kong stocks.

In the A-share market, from March 2 to March 18, the top 20 stocks by net purchase amount by South Korean investors totaled $19.1557 million. The top net buy was Sany Heavy Industry, with $5.0174 million; second was Ganfeng Lithium, with $2.524 million.

In the Hong Kong market, from March 2 to 18, the top 20 stocks by net purchase amount totaled $53.6928 million. The top net buy was Global X China Electric Vehicle ETF, with $19.7513 million; second was China Energy Construction, with $5.5352 million.

Overall, South Korean investors have increased their holdings in companies in engineering construction, energy equipment, utilities, and high-end manufacturing. These companies are characterized by heavy assets, stability, and high dividends, making them good choices for risk-averse capital.

Industry insiders say that under the backdrop of escalating geopolitical conflicts and accelerated AI iteration, Chinese assets—with advantages such as complete industrial chains and controllable strategic resources—are attracting offshore risk-averse funds. The “safety premium” of Chinese assets is expected to gradually emerge. Moreover, in the medium to long term, compared to service-oriented markets more vulnerable to AI disruption, China’s real assets—factories, infrastructure, energy, and equipment—possess “uncodifiable” resilience, making them more valuable for medium- and long-term allocation.

South Korean Funds Flow into A-shares and Hong Kong Stocks

Recently, international tensions have increased, global markets have become more volatile, and the South Korean stock market has experienced heightened fluctuations. Since the Middle East conflict erupted, many South Korean funds have been flowing into Chinese assets seeking safety. Since March, South Korean investors have shown net buying in both A-shares and Hong Kong stocks.

Specifically, in the A-share market from March 2 to 18, the top net buy was Sany Heavy Industry, with $5.0174 million; second was Ganfeng Lithium, with $2.524 million; third was Guangxun Technology, with $1.5071 million; the total net purchase of the top 20 stocks reached $19.1557 million.

Sany Heavy Industry is a leading global construction machinery manufacturer; Ganfeng Lithium is a leading producer of lithium compounds and metallic lithium; Guangxun Technology specializes in optoelectronic devices and subsystems. The purchase of these companies by South Korean funds reflects recognition of China’s real economy and high-end manufacturing.

In the Hong Kong market, from March 2 to 18, the top net buy was Global X China Electric Vehicle ETF, with $19.7513 million; second was China Energy Construction, with $5.5352 million; third was Xunce Technology, with $2.54 million; the total net purchase of the top 20 stocks reached $53.6928 million.

Global X China Electric Vehicle ETF tracks China’s new energy vehicle industry chain; China Energy Construction is a state-owned enterprise in power engineering and infrastructure, with stable and high dividend attributes; Xunce Technology focuses on fintech and AI solutions. South Korean funds are concentrated in these three asset types, indicating recognition of China’s new energy vehicle and AI sectors, as well as risk-hedging needs.

South Korean Investors Focus on Stable Assets

Looking at the overall net buying stocks, South Korean funds favor companies with stable and risk-averse attributes.

In the A-share market, besides the top net buy Sany Heavy Industry and Ganfeng Lithium, South Korean investors also bought into companies in engineering construction, energy equipment, and chemical materials with stable risk profiles from March 2 to 18.

For example, China Power Construction, a central enterprise in infrastructure, bought net $563,800; Dongfang Electric, a central enterprise in energy equipment, bought net $537,100; chemical leader Wanhua Chemical and fiberglass leader China Jushi bought net $483,700 and $854,300 respectively.

In the Hong Kong market, besides the top net buy China Energy Construction, South Korean funds increased holdings in utilities, telecom operators, and infrastructure materials.

For instance, China Resources Power in utilities bought net $2.1122 million; China Mobile, a telecom leader, bought net $835,700.

In addition to the top net buys of Global X China Electric Vehicle ETF and China Energy Construction, South Korean funds also increased positions in high-dividend utilities, telecom, and infrastructure sectors, which are heavy-asset industries with stable cash flows and high dividend yields, making them key risk-hedging options.

Chinese HALO Assets Have Unique Advantages

Recently, ongoing escalation of geopolitical conflicts in the Middle East, coupled with accelerated AI technological iteration, has increased global investors’ demand for HALO assets as safe havens. Chinese HALO assets, with their strong resource independence and complete industrial chains, have become high-quality assets in the global HALO market, attracting South Korean investors.

Industry experts point out that current market focus is on how AI-driven changes in industrial organization will reshape the landscape. Industries with weak barriers and high substitutability face valuation pressures, while Chinese assets—thanks to controllable strategic resources, complete supply chains, and tangible attributes—are enjoying a “safety premium.”

Furthermore, this revaluation aligns with global supply chain restructuring and the trend of re-industrialization in emerging markets. As countries seek to “de-risk” and ensure domestic capacity, China’s complete industrial system and resource conversion capabilities make it a prime hub for HALO assets.

It is also noteworthy that industry insiders believe Chinese HALO assets not only serve short-term risk hedging but also hold significant medium- and long-term value.

From a long-term perspective, industry analysts suggest that, amid potential widespread disruption from AI, the overall “fragility” of Chinese markets is much lower than that of the U.S., which is more service-oriented. While U.S. markets worry about AI eroding profits in advertising, customer service, and legal consulting, China’s core assets—factories, mines, power grids, refining units—due to their physical, “uncodifiable” nature, inherently possess greater resilience.