Sovereign wealth funds fear missing China tech boom, survey says
Some 59 per cent of respondents see China as a high or a moderate allocation priority over the next five years, up from 44 per cent last year, the survey conducted among 83 sovereign wealth funds and 58 central banks during the first quarter of 2025 showed.
'There's a bit of fear-of-missing-out effect here with China tech boom like Silicon Valley of some years ago,' said Rod Ringrow, head of official institutions at Invesco. 'There's a general view from the sovereign sector here that Chinese tech will be globally competitive and they want to make sure they're part of the programme now.'
Attractive local returns are cited as the top driver for future flows, reflecting confidence in the sector's valuations and earnings potential relative to other markets, the survey said. The shift comes despite rising tensions between China and the US.
It comes at the cost of reduced allocations to longer-maturity US government debt amid concerns about fiscal sustainability and policy volatility, the report said. Sovereign asset managers are also re-evaluating passive index strategies, particularly those focused on exposure to US equities.
Furthermore, central banks are building larger, more diversified reserves to withstand volatility, the report said. While the US dollar retains its dominance, gold's role as a defensive asset is growing.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
'Central banks continue to buy gold and a lot of that is driven by weaponization concerns,' Ringrow said. 'It's a core part of the reserve holdings due to anti-inflation protection but also because it can't be easily sequestered by someone else.'
Sector-focused
Ringrow said the bullish camp on China includes a number of US-based institutions. Still, the renewed interest doesn't mean a return to a broad-based 'rush to China' sentiment of the past, according to Invesco.
Instead, it 'reflects a more deliberate, sector-focused approach, targeting areas where China is positioned to achieve global leadership, underpinned by both market momentum and strategic policy support,' the report said.
This means that sovereign investors are orienting their China strategies around specific tech ecosystems, rather than broad macroeconomic exposure. These include semiconductors, cloud computing, artificial intelligence, electric vehicles and renewable energy infrastructure, according to the report.
Invesco cited a Middle Eastern sovereign wealth fund as saying that China will dominate solar, wind, EV, and battery markets for decades. A respondent from the Asia-Pacific region said that given the amount of resources and policy support from Chinese authorities, it's only a matter of time until the country closes the gap on the US in semiconductors, cloud computing, and AI. BLOOMBERG
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
an hour ago
- Straits Times
In China's factory heartland, warehouses weather Trump tariffs
Sign up now: Get ST's newsletters delivered to your inbox Workers at a delivery company in Guangzhou sort out packages of online shopping giant. GUANGZHOU, China – Labourer Shuai Hang went a week without work earlier in 2025 when sky-high US tariffs on Chinese goods overwhelmed the warehouse he works at and slowed the company's US-bound parcels to a trickle. But on Aug 12, after US President Donald Trump announced a truce on those duties would be extended , the depot in southern China's manufacturing hub Guangzhou was alive with noise as workers stuffed trucks with packages of clothes and kitchenware. Many are destined for the doorsteps of US customers of Chinese-founded online shopping giant Temu. 'Tariffs impact our daily lives,' said 31-year-old Mr Shuai, whose monthly pay of more than 10,000 yuan (S$1,800) dropped by a third previously. 'If tariffs are slightly lower, then there are more outgoing shipments, and then we have higher wages,' he said. Mr Trump's tariff policies since taking office have upended global trade and set off a blistering tit-for-tat with Beijing. But the two major economies agreed in May to a fragile truce , with each temporarily lowering levies on the other's goods. That agreement was extended to November by Mr Trump on Aug 11, hours before it expired. At the height of the tariffs, said Mr Shuai, who has been loading parcels for Guangzhou-based logistics company Weijiang International for a year, 'there was not a single truck' for him to fill, so he could not work. Overall, deliveries dropped by about 20 per cent in May, according to Weijiang's founder, Mr Xiong Wei, with the US market making up around a quarter of their cross-border business. But business has recovered since July, he said. Mr Xiong said he has not lost sleep over the looming expiration of the 90-day tariff truce this week, as he expected it would be renewed. 'We might have been worried in May, but now we are indifferent,' he said. 'We are used to it'. A worker at a warehouse of the Weijiang International delivery company seals packages of online shopping giant Temu. PHOTO: AFP 'Cards reshuffled' These days, the warehouse is sending out 100 tonnes of packages every 24 hours, with up to 70 trucks making trips. Industrial fans whirred as sweat-slicked workers methodically scanned yellow, black and sage green bundles into lorries. Mr Xiong's company has recently invested in its own warehouse in Chicago. In many ways, the uncertainty provided opportunity for smaller logistics companies like theirs, said manager Chen Weiyan, as they have taken the chance to expand their market. 'The cards have been reshuffled,' he said. Around 30 per cent of the parcels moved by Weijiang International end up in a different warehouse, this one owned by Temu-parent PDD, where they are unloaded, repacked and readied for a flight across the ocean. A truck carrying goods for delivery leaves a warehouse of the Weijiang International delivery company in Guangzhou. PHOTO: AFP While the truce is welcome, Mr Shuai, who packs three to four tonnes in a truck daily, said he still pays close attention to tariff news. 'For those of us who have travelled over 1,000km to work here, we definitely don't want frequent breaks. We all want to earn more money,' said the native of neighbouring Guizhou province. Working at the warehouse is less tiring than labouring at a construction site, and earning money has become more difficult in the past two years, he said. Mr Chen, the manager, was bullish. 'We will not give up this market,' he said. 'Folks in America need our goods'. AFP
Straits Times
an hour ago
- Straits Times
Robot dog in Mexico teaches animal kindness on the streets
Sign up now: Get ST's newsletters delivered to your inbox Waldog will flag rubbish on the street, potholes and register fellow street dogs. MONTERREY, Mexico - He walks, he talks, he runs and he plays. He's 'Waldog,' an AI-powered robot that is making the rounds in the northern city of Monterrey, Mexico to raise awareness about animal abuse and welfare. With a metallic, friendly voice, Waldog is about the size of a beagle and initiates conversations with children and adults about animal rights. "Hi, I'm Waldog, and I'm here to give a voice to those who don't have one, the animals who live on the streets," he told one group of laughing residents in the low-income neighbourhood of Santa Catarina in Monterrey on Aug 8. Waldog told them his job is to 'raise awareness' about animal treatment. Federal Senator Waldo Fernandez of Monterrey told Reuters that he paid US$4,084 (S$5, 245) for Waldog with his own money and named the pet after himself. Waldog needs adult accompaniment and is operated by a remote control. Mr Fernandez, a self-professed animal activist, said Waldog seeks to encourage kindness and responsibility toward animals and humans alike. But it will also serve a practical purpose, Mr Fernandez said in an Instagram post: Waldog will flag rubbish on the street, potholes and register fellow street dogs. Top stories Swipe. Select. Stay informed. Singapore Luxury items seized in $3b money laundering case handed over to Deloitte for liquidation Singapore Power switchboard failure led to disruption in NEL, Sengkang-Punggol LRT services: SBS Transit Singapore NEL resumes service after hours-long power fault; single-track service on Sengkang-Punggol LRT Business Ninja Van cuts 12% of Singapore workforce after 2 rounds of layoffs in 2024 Singapore Hyflux investigator 'took advantage' of Olivia Lum's inability to recall events: Davinder Singh Singapore Man who stabbed son-in-law to death in Boon Tat Street in 2017 dies of heart attack, says daughter Singapore Scoot to launch flights to Chiang Rai, Okinawa, Tokyo-Haneda, boost frequency to other places Singapore Man who stalked woman blasted by judge on appeal for asking scandalous questions in court Robot dogs have also been used in search and rescue missions following natural disasters. US authorities are also working on developing robot dogs for patrol along the US-Mexico border. For now, Mr Fernandez said, Waldog has a full agenda: It will visit schools, plazas and neighbourhoods across Monterrey's metro area, in addition to posing for lots of selfies. REUTERS
Business Times
an hour ago
- Business Times
India, China to resume direct flights in sign of closer ties
[NEW DELHI] India and China are set to resume direct flight connections as soon as next month, people familiar with the negotiations said, as the world's two most populous countries seek to reset their political ties. Airlines in India have been asked by the government to prepare flights to China at short notice, with a possible official announcement as soon as the Shanghai Cooperation Organisation (SCO) summit at the end of August in China, said the people, asking not to be identified because the negotiations are ongoing. Passenger flights between India to China were suspended after the Covid-19 pandemic, forcing travellers from the two neighbouring countries to pass through hubs like through Hong Kong or Singapore. The renewed push to rebuild a direct link comes at a time when India's relations with the US have come under considerable strain, after US President Donald Trump doubled tariffs on Indian goods to 50 per cent as a penalty for its purchases of Russian oil. On Monday, Air India announced it would suspend its direct link to Washington, DC, next month, though it cited 'operational factors' as the reason. Diplomatic ties between the two Asian heavyweights hit a low point in 2020, when border clashes left 20 Indian fighters and an unknown number of Chinese soldiers dead. India recently allowed tourist visas for Chinese nationals after years of curbs. Prime Minister Narendra Modi will attend the SCO summit in Tianjin starting Aug 31, where he may meet Chinese President Xi Jinping. India's aviation ministry, the Directorate General of Civil Aviation, and the country's press information bureau did not respond to requests for comment. The exact timing of any flight resumption remains fluid, and talks might still hit a snag, the people cautioned. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Before the suspension, Indian carriers including Air India and IndiGo, as well as Chinese airlines such as Air China, China Southern and China Eastern ran services between key cities of the two countries. A resumption is likely to see both Air India and IndiGo restarting flights to China, the people said. Air India and IndiGo did not respond to emails seeking comment. India and China had first agreed in January to resume direct flights, before relations between the two countries cooled again amid India's limited war with Pakistan. The two countries then announced a takeup of direct connections once more in June, though without any visible progress. Plans to rebuild direct links only gained pace in the past two weeks, and the airlines involved have also been informed about the proposal, the people said. BLOOMBERG
