Korean Funds Pour Into China as Safe Haven; A-Shares and Hong Kong Stocks Both Receive Increased Positions; Safety Premium Now Emerging

Recent international tensions have caused turbulence, with global capital markets experiencing increased volatility. Investors worldwide are seeking safe-haven assets.

Since the outbreak of the Middle East conflict, Korean investors have been net buying Chinese A-shares and Hong Kong stocks for stability and risk aversion.

In the A-share market, from March 2 to March 18, the top 20 stocks by net purchase amount by Korean investors totaled $19.1557 million. The top net buyer 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 totaled $53.6928 million. The leading net buyer was Global X China Electric Vehicle ETF, with $19.7513 million; second was China Energy Construction, with $5.5352 million.

Overall, Korean investors increased holdings in companies in engineering, energy equipment, utilities, and high-end manufacturing—assets characterized by heavy assets, stability, and high dividends, making them good risk-hedging options.

Industry insiders say that under the backdrop of escalating geopolitical conflicts and accelerated AI development, Chinese assets—with complete supply chains and controllable strategic resources—are attracting foreign risk-averse capital inflows. 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, equipment—possess “uncodifiable” resilience, making them more valuable for medium- and long-term allocation.

Korean Funds Flow into A-shares and Hong Kong Stocks

Recent international tensions have increased volatility in global markets, with South Korea’s domestic stock market also experiencing turbulence. Since the Middle East conflict erupted, many Korean funds have been flowing into Chinese assets seeking safety. Since March, Korean investors have been net buying both A-shares and Hong Kong stocks.

Specifically, in the A-share market from March 2 to 18, the top net buyer 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 top producer of lithium compounds and metallic lithium, and Guangxun Technology specializes in optoelectronic devices and subsystems. Their purchase by 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 buyer 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 was $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, known for stability and high dividends; Xunce Technology focuses on fintech and AI solutions. Korean funds are heavily accumulating these assets, indicating confidence in China’s new energy and AI sectors, as well as risk-hedging needs.

Korean Investors Focus on Stable Assets

From the overall net-buying stocks, Korean funds favor companies with stability and risk-hedging attributes.

In the A-share market, besides the top net buyer Sany Heavy Industry and Ganfeng Lithium, Korean investors also bought companies in engineering, energy equipment, and chemical materials from March 2 to 18.

For example, China State Construction Engineering, a central enterprise in infrastructure, bought $0.5638 million; Dongfang Electric, a central enterprise in energy equipment, bought $0.5371 million; chemical leader Wanhua Chemical and fiberglass leader China Jushi bought $0.4837 million and $0.8543 million respectively.

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

For instance, China Resources Power in utilities bought $2.1122 million; China Mobile, a telecom leader, bought $0.8357 million.

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

Among these, China Resources Power bought $2.1122 million; Goldwind, a wind power equipment leader, bought $1.7723 million; Harbin Electric, a power equipment central enterprise, bought $1.498 million; China Mobile bought $0.8357 million; China Power International Development bought $0.7454 million; Dongyue Group, a new chemical materials leader, bought $0.6573 million. These assets are characterized by heavy assets, stable cash flows, and high dividend yields, making them attractive for risk-averse Korean investors.

Chinese HALO Assets Have Unique Advantages

Recently, ongoing regional conflicts in the Middle East, combined with accelerated AI development, have increased global investor interest in HALO assets for risk hedging. Chinese HALO assets, with strong resource independence and complete industrial chains, are among the top quality in the global HALO market, attracting Korean investors.

Experts note that current market focus is on how AI-driven industry structures will evolve. Sectors with weak barriers and high substitutability face valuation pressures, while Chinese assets—thanks to controllable strategic resources, complete supply chains, and tangible assets—are enjoying a “safety premium.”

Further, 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.

Additionally, industry insiders point out that Chinese HALO assets offer not only short-term risk hedging but also significant medium- and long-term value.

From a long-term perspective, experts believe that in an AI era with potential widespread disruption, the overall “fragility” of Chinese markets—dominated by factories, mines, power grids, and refining plants—is much lower than that of the service-heavy U.S. markets. While the U.S. worries about AI eroding profits in advertising, customer service, and legal consulting, China’s core assets—physical infrastructure—are inherently more resilient due to their “uncodifiable” physical nature.