Goldman Sachs sees AI driving $200 billion inflows into China stocks

Goldman Sachs has raised its outlook for Chinese stocks, citing artificial intelligence (AI) as a key driver of earnings growth and market inflows.

The investment bank now expects AI adoption to contribute significantly to corporate profits, potentially attracting as much as $200 billion in capital, Reuters reported.

China’s tech sector has seen a remarkable surge, with major stocks recording their longest winning streak in over two years.

This momentum was further fueled by DeepSeek’s AI breakthrough, which renewed investor confidence in China’s technological advancements.

Reflecting this optimism, Goldman Sachs increased its 12-month target for the CSI 300 Index to 4,700, up from 4,600.

Similarly, its price target for MSCI China was raised to 85, up from 75.

As AI-driven innovation accelerates, investors are closely watching whether China’s stock market rally can sustain its upward trajectory.

China’s central bank’s take on stable yuan

Meanwhile, China’s central bank governor emphasized the importance of a stable yuan for global financial and economic stability, reaffirming Beijing’s commitment to allowing market forces to play a decisive role in determining the exchange rate.

Speaking at the AlUla Conference for Emerging Market Economies in Saudi Arabia, People’s Bank of China (PBOC) Governor Pan Gongsheng noted that while most currencies have weakened against the US dollar, the yuan has remained largely stable despite heightened market volatility.

“Recently, a number of factors have pushed up the dollar index, causing most non-dollar currencies to depreciate. However, the RMB (yuan) has remained relatively stable,” Pan stated.

Pan also highlighted China’s growing focus on boosting domestic consumption, with policies aimed at increasing household income and offering subsidies to stimulate spending.

Beijing has identified consumption growth as a key economic priority for 2025, signaling a shift from investment-driven expansion to strengthening domestic demand amid potential export challenges.

Additionally, Pan reaffirmed China’s commitment to a proactive fiscal policy and an accommodative monetary policy, with plans to enhance counter-cyclical policy adjustments to support economic stability.

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