China's artificial intelligence (AI) breakthroughs have not generated broad market gains large enough to attract foreign investors at scale:
- One reason is that Beijing's communication style, including around anti-corruption probes, contrasts with the kind of transparency Wall Street is used to.
- China's market volatility isn't due to quantitative trading, but sometimes "totally unexpected" policy information disclosure.
China's tech advances may rile Washington and worry Wall Street about U.S. tech stocks. But when it comes to Chinese alternatives, foreign investors remain selective:
The recently announced probe into Fang Xinghai, former vice chair of China's securities regulator, reveals a reason why foreign investors are cautious:
Market volatility isn't due to quantitative trading, but sometimes "totally unexpected" policy information disclosure.
Chinese stocks overall have yet to generate returns that exceed U.S. stocks and bonds enough to attract significant amounts of capital willing to overlook the risks.
