On Wednesday, the Nasdaq Golden Dragon China Index surged 2.5% at the opening, with popular Chinese ADRs delivering robust performance. Alibaba (BABA.US) jumped nearly 9%, GDS Holdings Ltd (GDS.US) climbed over 9%, while Kingsoft Cloud (KC.US), Baidu (BIDU.US), and JD.com (JD.US) advanced nearly 4%. PDD Holdings (PDD.US) gained over 2%. Meanwhile, the Shanghai Composite Index rose 0.83% during the session, and the Hang Seng Index increased 1.37%.

On the news front, Chen Dong, Asia Chief Strategist and Head of Research at Pictet Wealth Management, recently indicated that China-US tensions show signs of cooling, with both sides seeking to reach trade agreements. The market believes there will be no return to 100% tariffs, and formal agreements between the two countries are expected in the coming months. This effectively reduces the risk premium for Chinese stocks. Combined with the People's Bank of China's liquidity support measures for the stock market and the AI theme driving technology stocks higher, multiple factors are contributing to a valuation rerating of Chinese stocks, enhancing foreign investors' interest in Chinese assets. Among these, investors more familiar with China are most willing to return to the Chinese market, while participation from European and American investors remains relatively low. However, if the rally in Chinese stocks continues, more investors are expected to return in the future.