(Yicai) March 4 -- Overseas investors’ interest in Chinese tech stocks has not waned, despite the turmoil caused by the US government's new tariffs and escalating geopolitical tensions, the head of Asia-Pacific internet and media at US financial services company Jefferies Group told Yicai.

Even though the US’ ‘America First’ investment policy has caused stock prices to fluctuate, investors remain bullish on Chinese internet companies, said Thomas Chong, citing feedback from European clients.

US President Donald Trump’s first few weeks back in the White House have sent shockwaves across the globe with his bold ‘America First’ policy. Starting March 4, the US will impose 25 percent tariffs on Mexico and Canada, and Trump has warned the European Union that it could face the same measure.

Besides, a tense stand-off between the US and Ukranian leaders resulted in a mineral co-operation deal not being signed, added to future market instability.

Markets around the world tumbled on the news of additional tariffs on Feb. 28. The Nasdaq slumped 2.8 percent while stock markets in Japan and South Korea also saw significant declines.

Chinese mainland and Hong Kong stocks were affected as well, with the Hang Seng Index experiencing its first weekly decline of the year. However, thanks to an artificial intelligence wave driven by the huge popularity of AI startup DeepSeek’s chatbot, the Hang Seng Tech Index has risen nearly 40 percent since the start of the year from its low point.

Although the Hang Seng Index saw its first weekly drop of the year last week, there was no panic selling, but rather a healthy consolidation and profit-taking, US investment bank Goldman Sachs said.

Moreover, despite the pressure, southbound capital flows, which are funds flowing into Hong Kong from mainland China, have remained active, the New York-based bank said. Some USD2.9 billion of southbound funds flowed into Hong Kong on Feb. 25, the second-highest daily buy-in so far this year, and the fifth highest ever.

Chinese tech stocks are valued at half the price of US tech stocks, an investment manager from a mid-sized US mutual fund said. Recently some institutions have been actively investing in tech funds against the trend, because they had previously underweighted their investments in the Chinese market.

Internet giants Alibaba Group Holding and Tencent Holdings are a hot topic among investors, Chong said.

Investors are interested in Alibaba’s AI and cloud computing strengths, he said. The Hangzhou-based firm stands out with its self-developed large models, the world’s largest open-source community Model Scope, and a complete cloud infrastructure. In terms of e-commerce, investors are keen to understand if there will be any revisions in potential profit, and especially whether the company’s overseas e-commerce operations can turn a profit.

With regard to Tencent, the firm has recently integrated DeepSeek into several of its products, including instant messenger WeChat, Chong said. Overseas investors are eager to learn more about the prospects of the Shenzhen-based company’s AI-powered capabilities supported by mini-programs and WeChat search.

Editor: Kim Taylor