Chinese Investors Show Growing Preference for Safe Assets Amid Global Uncertainties

Investor Sentiment Trends in China: A Shift Toward Safety

In the latest findings from the CKGSB Investor Sentiment Survey, a notable trend has emerged among Chinese investors: an increasing inclination towards safe-haven assets like gold. The Q1 report highlights a 16.3% surge in the willingness to invest in gold as of April 2025, reflecting a substantial rise of 17 percentage points since October 2018. This shift can be attributed to the mounting tensions in international relations and the economic implications of trade disputes, particularly with the United States.

The survey, conducted by the Cheung Kong Graduate School of Business (CKGSB), captures the sentiment of investors during a tumultuous period marked by tariff hikes and trade frictions. According to the data, around 63.6% of participants indicated that Sino-U.S. relations significantly affect their investment decisions. Furthermore, 56.8% highlighted the significance of China's relationships with Western countries, and 58.8% expressed concerns that deteriorating trade relations could apply considerable short-term pressure on China’s economy.

Despite these challenges, there is a thread of optimism among investors regarding the long-term prospects of the Chinese economy. Strikingly, 45.8% of respondents maintained a positive outlook for the future, with 20% believing that China could navigate through current adversities with limited adverse effects. This optimism is underpinned by perceptions of a resilient private economy, ongoing technological advancements, and governmental support for domestic growth.

Real estate, traditionally the pillar of wealth for most Chinese families, experienced a downturn starting in August 2020. This decline, coupled with external geopolitical pressures, has forced a reevaluation of China’s growth strategies, with 58.2% of respondents indicating that enhancing domestic demand could significantly influence future investment.

The survey also noted an uptick in investor confidence towards China's stock market. After a previous gain of 11.3% in investment willingness in November 2024, the willingness to invest rose further to 12.7% in April. Investors appear to align their expectations for China's A-shares with broader market trajectories, indicating a cautious yet optimistic approach to investment.

Moreover, respondents recognize China's leading position in critical technological sectors. A compelling 54.4% asserted that China is at the forefront of Artificial Intelligence development, marking an impressive increase of 14.7 percentage points since November 2024. This confidence in technological leadership plays a pivotal role in shaping investment decisions moving forward.

The status of the private economy also emerged as a vital factor influencing investor sentiment, with 44.5% underscoring its importance in their investment outlook as of April 2025.

In summary, the CKGSB Investor Sentiment Survey offers valuable insights into the evolving attitudes of Chinese investors as they increasingly turn towards safe assets in response to geopolitical uncertainties. With a mix of caution and optimism, investors are navigating a complex landscape while maintaining faith in China’s resilience and potential for growth in critical sectors. The future of investment in China may hinge on balancing domestic demand dynamics, technological advancement, and international relations.

This survey demonstrates the intricacies of investor sentiment and highlights the need for constant adaptation in investment strategies as global conditions continue to shift.