#China #Beijing #Brokerage #ChinaAMC #ETF Inflows

China’s ETF Market Sees Significant Increase in Inflows

China’s onshore exchange-traded fund (ETF) market has recently witnessed a remarkable surge in overseas inflows, a trend largely fueled by the sustained rally and increasing risk appetite among investors. As of July 2025, these inflows have skyrocketed by 146.3% year-on-year, dramatically reducing the gap with the investment flow from Mainland to Hong Kong.

The ETF Connect mechanism has played a pivotal role, recording an unprecedented trading volume in July of 72.2 billion yuan (approximately $10 billion), marking it as the highest monthly level in 2025. This wave of trading activity not only beat the previous peak seen in March, driven by significant advancements from DeepSeek, but also outperformed southbound trading for two consecutive months in June and July.

Historically, the dynamics between northbound and southbound trading have favored southbound—a preference driven by Mainland investors favoring technology, consumer, and biotech sectors listed in Hong Kong. However, recent shifts in this trend indicate a notable increase in northbound trading activities, which have started to catch up with their southbound counterparts.

From the start of the year up until now, the northbound turnover has risen significantly, totaling 376.2 billion yuan. Notably, it constitutes about 83.94% of the southbound trading value, up from 80.27% the previous year. This upward trend showcases the growing interest among international investors towards the Mainland’s securities market.

The trading peak coincided with the DeepSeek Moment in February-March, where transaction volumes surged to 63.2 billion and 64.2 billion yuan, overshadowed only by Hong Kong’s vibrant market conditions. Throughout January to July, northbound trading turnover has surged, revealing the market’s evolving landscape and investor sentiment concerning risk and opportunities in China.

ChinaAMC: A Key Player in ETFs

Among the key beneficiaries of this burgeoning market is China Asset Management, commonly known as ChinaAMC. Established in April 1998, ChinaAMC stands as one of the foremost mutual fund managers in China, boasting over two decades of leadership in product innovation within the asset management sector.

At the inception of the ETF Connect program, ChinaAMC had ten products among the initial 83 eligible for northbound trading. Fast forward to present, their eligible ETF products have expanded to 24, making them the largest asset manager in China by this metric. Notably, the ETF that tracks the CSI Robotics Index reported the largest net inflow from overseas investors in the first half of the year, closely followed by the ETF tracking the CSI AI Index.

As stated by Xu Meng, Executive Manager of Quantitative Investment at ChinaAMC, “We remain optimistic about China’s computing power supply chain and its leading technology companies, buoyed by verified Q2 earnings and enhanced sentiments between the U.S. and China.” This sentiment feedback loop not only showcases the market aspects but also reflects the operational strategies pivotal for ChinaAMC’s continued success in the competitive landscape.

In conclusion, the ETF market's evolution in China, highlighted by the intense inflows and shifting trading dynamics, illustrates a growing recognition of the Mainland's financial landscape. With firms like ChinaAMC adeptly positioned to capitalize on such trends, the landscape appears promising for investors seeking opportunities within China.

For more detailed insights on the ETF Connect mechanism and its implications, readers can visit ChinaAMC's official page to explore further developments and updates.