On Thursday, the Nasdaq Golden Dragon China Index rose over 2%, with popular Chinese concept stocks posting significant gains. Zai Lab Ltd (ZLAB.US) surged over 12%, GDS Holdings (GDS.US) climbed over 8%, while Hesai Group (HSAI.US), Kingsoft Cloud Holdings (KC.US), and Alibaba Group (BABA.US) all advanced over 4%. Additionally, the Shanghai Composite Index gained 1.65% during the session.

On the news front, Morgan Stanley stated on Thursday that US investor interest in Chinese stocks has reached its highest level in five years, and their return to the Chinese market has only just "begun." In a report, Morgan Stanley indicated that over 90% of investors "clearly expressed willingness to increase their exposure to the Chinese market, marking the highest level since Chinese stocks peaked in early 2021." This represents the latest evidence of surging foreign investor enthusiasm for the Chinese market.

The firm also highlighted reasons for the renewed US investor interest in Chinese markets, including China's leadership position in specific industries, China's efforts to boost stock markets and stabilize the economy, improved liquidity conditions, and rising investor demand for portfolio diversification.

Furthermore, the latest report from the Institute of International Finance (IIF) shows that foreign investors poured nearly $45 billion into emerging market equity and bond portfolios in August, marking the highest level in nearly a year. Among these flows, investments into Chinese market portfolios accounted for the largest portion, with a combined net inflow of $39 billion into Chinese bonds and equities in August.