BlackRock expects more 'DeepSeek moments' from Chinese tech firms

BlackRock expects more "DeepSeek moments" from China's tech sector, bringing investment opportunities, while the markets may remain volatile in the short term due to global trade and geopolitical tensions.

Lu Wenjie, Greater China investment strategist at BlackRock, projects that some breakthroughs could be seen in China's biotech and autonomous driving sector, which may be parallel to the bomb dropped by Chinese startup DeepSeek with its low-cost artificial intelligence model in January, as they are keen to invest in research and development 

In addition, Lu thinks China's policy environment is very conducive to technological innovation and commercialization and Chinese consumers are still willing to try the innovative products. So if Chinese companies can seize these opportunities in commercialization, it would bring many investment opportunities, Lu said.

Compared with mainland-traded companies, Lu prefers the Hong Kong-listed tech firms, as most of them are software and services-focused and own a more flexible business model, which could keep attracting capital to flow in.

But he reminded that the overall market sentiment remains weak, as the confidence of investors and consumers hasn't come back, adding that the fierce competition among e-commerce platforms is one of the downside factors. 

Meanwhile, BlackRock's head of active investments in Asia Pacific and chief investment officer of emerging markets Belinda Boa projected that the markets will remain volatile in the short term as no one knows how long the ceasefire could last.

While BlackRock sees that the investors' diversification from US dollar assets is still in the early stage, Boa said Asia Pacific and emerging markets will benefit from the flow, naming Japan, India and China.

Boa added that a weak greenback is good for the Asian markets, but Asia would be bitten if the United States fells into recession.

THEMIS QI