Global fund managers like Amundi SA, BNP Paribas Asset Management, Fidelity International, and Man Group expect Chinese stocks to keep rising in 2026. JPMorgan Chase recently upgraded the market to overweight. Gary Tan of Allspring Global Investments says the Chinese market is becoming “indispensable” for foreign investors. The MSCI China Index jumped about 30% this year, beating the S&P 500 by the most since 2017, and adding $2.4 trillion in value. Most of the inflows came from passive funds, while active managers pulled out about $15 billion. Foreign long-only funds overall bought $10 billion of shares in mainland China and Hong Kong through November. Investor views have changed from doubt to seeing China as a source of unique value driven by technology. "China has turned a corner, proved more resilient and investors are now increasingly embracing an ‘investible’ China that offers diversification and innovation," said George Efstathopoulos, portfolio manager at Fidelity International. The excitement centers on China’s tech giants in chips, biopharma, and robotics, and hopes that deflation will ease in the world’s second-largest economy. Shares like Cambricon Technologies and Alibaba have jumped thanks to the AI buzz. Still, some investors remain cautious due to China’s slow stimulus and past policy shocks. Winnie Wu from Bank of America notes that the bar for investing remains high, but improving earnings and easing deflation could push the rally forward. Chinese stocks are also cheaper than many global peers, trading at 12 times forward earnings versus 15 for MSCI Asia and 22 for the S&P 500. Nomura and Morgan Stanley predict more moderate gains in 2026, around 6-9%. Besides foreign funds, local mutual funds and insurers are stepping up buying. State-linked "national team" funds also support the market during volatile times. Investors hope the $23 trillion in household deposits in China will eventually flow into the stock market, boosting it further. "If we have a confirmation of this improvement, the market will keep on flying," said Florian Neto, head of investment in Asia at Amundi.