China's capital market and foreign institutions are forging a new paradigm of deep mutual engagement. Wu Qing, Chairman of the China Securities Regulatory Commission, emphasized at the 2025 Lujiazui Forum on June 18 that efforts will intensify to enhance accessibility for global investors seeking opportunities in China's innovation-driven development. Concurrently, international capital's appetite for Chinese assets continues to surge, with multiple foreign institutions recently voicing bullish outlooks on the market.

China emerges as a premier global investment destination according to Invesco's 13th annual Global Sovereign Asset Management Study released July 14. While emerging markets remain strategic priorities for sovereign wealth funds, allocation preferences are shifting toward more selective approaches. Notably, 59% of surveyed institutions rank China as a high or moderate priority market—a significant shift since 2024 suggesting targeted allocations distinct from broader emerging market exposure. The study, encompassing 58 central banks and 83 sovereign wealth funds managing $27 trillion collectively, reveals 59% expect to boost Chinese asset holdings within five years. Key drivers include attractive local returns (71%), diversification benefits (63%), and expanded market access (45%).

Morgan Asset Management's Mid-Year 2025 Global Market Outlook highlights China's role in global portfolio rebalancing amid economic uncertainties, noting potential structural opportunities in the latter half. This confidence stems partly from improving fundamentals: Chinese listed companies reported aggregate revenue of 71.98 trillion yuan in 2024, with nearly 60% achieving growth. R&D spending reached 1.88 trillion yuan, sustaining multi-year increases.

Julius Baer's mid-2025 outlook cites Chinese firms' enhanced cost discipline and shareholder returns through dividends and buybacks. These structural improvements coupled with attractive valuations underpin their optimistic stance, particularly toward domestic-demand-driven companies with stable payouts. Neuberger Berman's July market assessment observes preliminary conditions forming for A-share upside, awaiting clearer catalysts. UBS Securities analyst Meng Lei projects gradual quarterly profit recovery, anticipating policy support could lift valuations while long-term capital inflows drive structural re-rating potential.

Technology innovation dominates foreign investors' focus areas. Invesco's study identifies digital technology/software (89%), advanced manufacturing/automation (70%), and clean energy/green tech (70%) as most compelling sectors. Growing consensus recognizes China's unique opportunities within its evolving tech ecosystem, where policy support and competitive domestic markets enable rapid scaling. Wellington Management notes fixed-income markets in Europe, Japan, and China may benefit from potential US capital outflows.

Foreign institutions are expanding physical presence alongside portfolio allocations. Foreign-funded public offering managers accelerated product launches, with Neuberger Berman, Fidelity, and Morgan Asset Management introducing over 30 new funds. Capital commitments are also rising—Morgan Stanley Fund increased registered capital by 58% to 950 million yuan, while AllianceBernstein Fund boosted capital from 300 million to 500 million yuan.