Goldman Sachs’ Bold Prediction
Goldman Sachs analysts see artificial intelligence (AI) rapidly transforming China’s markets from the current $200 billion by 2025. They estimate that, in ten years, increased AI usage will add 2.5% to Chinese earnings per share. Optimism is so great that Goldman has increased its 12-month target for the CSI 300 index to 4,700, representing a 19% upside.
The DeepSeek Effect
A major factor for this optimism is the latest discovery made by Chinese AI startup DeepSeek. Their AI model doesn’t need the most cutting-edge chips and matches the performance of its Western counterparts. This rekindled the interest of investors in China’s tech sector, resulting in a rally for Chinese tech stocks. If you want to read more about Deepseek’s AI model click here.
Proceed with Caution
Good as these predictions are, Goldman Sachs also advises caution. They’ve noted that robust policy support must be built in to overcome structural macroeconomic problems and maintain access to sustainable equity appreciation. Tariffs, changes in domestic demand, and disinflation warrant careful navigation.
Market Sentiment Shifts
AI-based optimism would be responsible for the startling change in market attitudes. Shares of Chinese tech have had their best couple of days in almost two years, so much that the Hang Seng Index has come within a whisker of a three-year peak. Analysis from various investment banks begins to argue more convincingly that the argument for investment in Chinese equities is improving as a result of the phenomena surrounding AI and signs of policy support.
The Road Forward
Undeniably, the AI sector brings forth huge promise-arisen from inevitable advances among incumbents such as DeepSeek. Within such progress lies for China its chances of emerging as a global AI leader; however, the wider picture of economic conditions and resultant policy support would need to be taken into consideration to realize fully those gains.
