In recent times, numerous foreign financial institutions have been ramping up their engagement with the Chinese market through measures such as capital injections and applying for Qualified Foreign Institutional Investor (QFII) status.
At the end of May, the wholly foreign-owned public fund, AllianceBernstein Fund, announced a decision by its shareholder, AllianceBernstein Hong Kong Limited, to increase its registered capital from the original 5 billion yuan to 6 billion yuan.
Records from the National Enterprise Credit Information Publicity System indicate that AllianceBernstein Fund has conducted four capital increases since receiving regulatory approval to operate in January 2024. The initial registered capital was 1 billion yuan, followed by an increase to 2 billion yuan in October 2023, a further rise to 3 billion yuan in May 2024, and a subsequent boost to 5 billion yuan in March 2025.
Similarly, on May 25th, Fidelity Fund saw its registered capital increase from $200 million to $218 million. This marks the seventh round of capital infusion for this foreign public fund since its establishment in May 2021.
Beyond direct capital supplementation, obtaining QFII qualification has also become a significant channel for foreign entities to access the Chinese market. In April this year, the China Securities Regulatory Commission approved the QFII qualification for Morgan Stanley Investment Management Enterprise. This represents the fourth QFII license secured by Morgan Stanley, with previous licenses granted to Morgan Stanley International Limited in June 2003, Morgan Stanley Investment Management Inc. in July 2006, and Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. in December 2008.
Furthermore, information from the CSRC website shows that since the beginning of the year, dozens of institutions, including Global Prosperity Wealth Management Co., Ltd., Korea Asset Investment Securities Co., Ltd., and Citadel Advisors Singapore Pte. Ltd., have been granted QFII qualifications.
A third-party analyst based in Shanghai noted that various signs indicate international capital is participating in China's capital markets in a more proactive and long-term manner. This trend not only reflects foreign investors' recognition of China's economic fundamentals and financial opening-up policies but also signals the sustained and growing appeal of China's capital markets as they continue to internationalize.
"Recently, I have participated in several international conferences for overseas investors. In these discussions, institutional representatives from Southeast Asia, Europe, and the United States have consistently emphasized one term—resilience," said Du Lijuan, a Senior Fund Manager at Invesco.
Du Lijuan added that, in a comparative context, resilience is a significant positive attribute for the Chinese market. The Chinese economy has demonstrated a strong capacity for adaptation, whether in economic restructuring and industrial upgrading, or in responding to changes in the external environment.
Zhu Chaoping, a Senior Global Market Strategist at Morgan Stanley Asset Management (China), stated that against the backdrop of global repricing pressures on some high-valuation assets due to interest rate changes, the valuation attractiveness of Chinese assets has improved, leading to a marginal enhancement in their appeal to long-term capital.
Zhu Chaoping elaborated further, noting that in an environment where global capital expenditure is heavily focused on artificial intelligence (AI), the A-share market presents structural and high-conviction opportunities. "The current market is placing increasing emphasis on corporate cash flow quality, dividend-paying capabilities, and industry-level certainty. On one hand, assets with stable cash flows and high dividend yields, often referred to as 'dividend assets,' continue to attract market attention. On the other hand, sectors representing new quality productive forces, such as advanced manufacturing, AI applications, and new energy upgrades, are still viewed as crucial directions for China's medium-to-long-term industrial upgrading," Zhu Chaoping said.
Li Changfeng, Head of Market Strategy at AllianceBernstein Fund, commented that current A-share valuations do not show signs of overheating. Against a backdrop where fundamentals are expected to drive sustained market gains, A-shares present sound investment value. Considering the ongoing enhancement in the profit improvement potential of China's equity market, overseas actively managed funds are also actively replenishing positions in China that they had previously reduced.
"This trend reflects that foreign capital is gradually becoming more optimistic about the performance opportunities in the Chinese market, driven by a confluence of positive factors including technological innovation, improvements in corporate governance, and sustained policy support," Li Changfeng stated.
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