Behind South Koreans’ growing interest in Chinese tech stocks
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The release of DeepSeek AI from a Chinese company should be a wake-up call for our industries. The vast magma ocean may have covered the entire surface of the moon in its early days of existence. These are findings released by a research team.

Deep-seek, electric vehicles and the far side of the moon. These aren't just buzzwords. They're shaping the narrative of today's tech industry in China. In February, South Korean investors' holdings in greater China stocks surged to almost $800 million, a staggering 179% increase from the previous month.

And now a new term is making waves, the Terrific Ten, a group of Chinese tech giants being compared to Wall Street's Magnificent Seven. South Korea has long been a nation of savvy investors, always on the lookout for the next big opportunity. So what's behind this growing appetite for Chinese tech?

In this episode of Deep Dive, I'm joined by Lee Chang-joo, a reporter at the Korea Herald, to break down why South Koreans are shifting their gaze toward the Chinese stock market and what this means for the global tech landscape. It's Friday, March 21st. Welcome back to the show, Chang-joo. It's been a while.

Thank you. It's been fun doing this in the past. So, glad to be back. Yeah, yeah, yeah. We've always enjoyed your storytelling and this time it's... Thank you. Yeah. And this time it's about this growing trend of South Koreans investing in the Chinese stock market. And

And I have this number that as of 2023, there were over 14 million active individual stock trading accounts in South Korea. And for a country with a population of about 52 million at the time, this means roughly one in four South Koreans is actively involved in the stock trading. So the question is, are you one of those 25% or the rest 75%? I'm the...

The rest of the 75%, that doesn't really invest. I do have a bank account that allows me to make investments if I want to in the future, but I haven't really got around to using it. I think I do want to start at some point, but I think right now the economy just feels too shaky and a little bit risky for me to take action. So I'm trying to...

wait it out a little bit before I make my own decisions. That's okay. But I surely have heard the reputation of the active retail investor culture in South Korea, which is quite much higher than many other countries in the world. And there's even this word, and I tried to learn this from Google, gamitutsatsa.

Kami to Tata? Kami to Tata, yes. Kami to Tata, which means "and investors" and which is used to describe the individual investors that are very willing to invest and perhaps even take risks in South Korea. So can you tell us about what's the origin of this term Kami to Tata? And is there kind of like a mindset that it reviews about the individual investors in South Korea?

So the origin of the term is quite metaphorical. It compares the small retail investors as ants, and can means ants or ant investors. And so in South Korea, ants are seen as hardworking, like small, but like numerous in numbers.

And so the term ant-investor is basically, it highlights the idea that despite these individual investments being small compared to, let's say, institutional investments, when they're combined, they form a significant force in the market. And so the term ant-investor

or ant investors first emerged in early 2000s during the growth of Korea's retail stock market. The government at this time, they encouraged the public to invest in the stock market more to increase wealth and to also stimulate economic growth. And I remember I was only a child back then, but I also remember some family members discussing heavily about what kind of stocks they'd invested in next. And they were all watching TV programs about like,

How to invest better and stuff like that. I mean, this trend is still going, but I remember it was pretty heavy back then. But anyway, this mindset, basically, I think it reflects two keywords. One is of collective action, and the second is of self-empowerment. It underscores the growing participation of people

everyday people in the financial markets. And so even if they earn less capital compared to institutional investors, in recent years, as more young South Koreans have turned to stock trading with increasing frequency, the influence of ant investors have grown, especially with the rise of mobile trading platforms in Korea.

So each individual investor might be small, but together they might be able to make a difference. Yeah. And invest. Yes, you're right. Right. So this passion, enthusiasm among these individual South Korean investors has been attributed to societal factors like the cable dominance, the income inequality, and perhaps the intense competition in the society. And do you think these factors...

they have fueled this get rich quick mentality among these investors.

Yeah, so, um, table dominance, like you said, income inequality, and intense competition, all three of them, I think, can be said to have contributed to the enthusiasm for investing amongst investor Koreans. I'm thinking I'm going to break this down to three parts, I can explain a little bit better for each of them. So to talk about tables, South Korea's economy has been long dominated by a few large conglomerates, I'm sure you know, some like Samsung, Hyundai, SK, and those, you know, big

big companies and their success or failure it has a direct impact on the financial well-being of korea and they're often seen as a key barrier to the ordinary people's economic freedom and so um they see these conglomerate stocks as safe bets because they know that even if they fail they won't like you know dip like super quickly and you know they will have

eventually result in some sort of success in the future. But basically their desires for higher and quicker returns and to earn fast real quick that are more exciting makes them turn to small and emerging companies instead. And I also read somewhere that these ant investors, they are wanting to invest in smaller companies so that they can also hopefully

get a little bit similar in terms of their wealth to those people who are way up there in the conglomerate sector. And so that's also where income inequality comes along, I think. And so compared to those of

those really rich Choebor families and ordinary Koreans, there is quite an income gap. And for many people, they say that traditional career paths do not offer a feasible route to economic security or upward mobility. And so as a result, investments for them become a way to bridge this wealth gap. And so retail investors here see the stock market as an alternative avenue to quick wealth,

and accumulation. And so then to kind of touch upon intense competition here a little bit. So across various sectors in life in Korea, education, employment, and personal achievements, they all, you can see some sort of like intense competition in all three of those areas.

And this high stress environment, it pushes individuals to stand out or to get ahead because it also pushes them to constantly compare themselves with other people who seem to have a little bit more than them. And so it leads them to pursue additional sources of income, like investing, so they can, I don't know, get a house in Gangnam or buy this really fancy car so they can also look like they are more ahead compared to their other people that are surrounding them.

But this intense environment, it also kind of shapes the people's mindsets towards taking more risks and, you know, striving to get short-term rewards out of, you know,

this dopamine rush that they get from investing into these small companies. And so in a society where success is highly valued and often defined by material wealth, the stock market offers some sort of like an immediate and potentially rewarding outlet for people to level up, I guess, financially, but also in terms of their quality of life.

Right. So with this social pressure, perhaps everybody has this dream of getting rich overnight and living the life they've always looked up to. Yeah.

Yeah, so it seems like South Koreans, I mean, on top of this passion for investment, actually specifically, they also enjoy investing in the overseas stock market. Last year, this report from Korea Economic Daily reported that Korean retail investors' stock holdings in the U.S. had hit record high. And also in just under six months,

Their holdings on the NVIDIA group, which was a popular stock last year, had nearly tripled in less than six months. And what do you think was driving this trend in people's passion for the overseas stock market, specifically the American one? And also, do people have a preference for tech firms? So there has definitely been...

a growing and quite a dominant interest in U.S. stock market amongst Korean investors. There's a saying that my friends tell me all the time, those who are like avid investors, they say like, if you want to make a lot of money, but also like invest in something for the long term and you don't want to touch upon it, you should invest in U.S. stocks because you won't see much of that growth.

I just invested in Korean once. Yeah, safe and stable. And also you'll just earn a lot more. So I think several factors are driving this investment trend with one being the mobile trading platforms that I mentioned earlier. And so, and of the globalization of financial markets,

And trading platforms in Korea basically has made it really easy for individual investors to begin to trade foreign stocks like US stocks as they offer these tools and resources to help them manage international investments easier. And so this easy access comes

Combined with a greater awareness of global markets, it led many retail investors to diversify their portfolios by investing in U.S. stocks. And Korean investors, especially those who have historically focused on domestic stock markets, are

kind of seeking to diversify their investments more. And so the Korean stock market, while it is very active and it is growing, a lot of investors say that it is quite limited in terms of the sectors that are available for their investment, while the U.S. offers more diverse opportunities. And the U.S. is home to some of the world's largest and most influential companies. So a lot of investors are eager to gain exposure to these companies.

businesses as well and to also kind of touch upon a little bit of money from doing that as well. So anyway, I guess you could say that there is a clear preference for tech firms among South Korean investors like

companies like Apple, Tesla, Nvidia, like you mentioned, are some of the most popular investments. The attraction to such tech stocks are driven, I think, by factors such as those companies having strong growth potential and Koreans being familiar with such tech firms from the use of their products or from their exposure in the news. And also the company's just general global prominence, as well as the explosive growth that these firms experienced in the past decade.

Last year, NVIDIA was a popular stock among many retail South Korean investors. And now moving the timeline to this year in early 2025, and we know that NVIDIA stock took a hit, plunged following the release of the Chinese AI chatbot DeepSeek. And how did that happen?

How did South Korean investors react to that development? And was that a very important turning point for them to start looking at the Chinese stocks? Well, for many South Korean investors who had been primarily focused on Western tech giants like NVIDIA,

The rise of DeepSeek and other Chinese innovations other than DeepSeek in the past, it kind of sparked this re-evaluation of their investment portfolios. And I think their view of Chinese companies too. Yeah. And it kind of sparked this fear among South Korean investors investing into semiconductor stocks in South Korea too, like SK Hynix, for example, which grew significantly as the artificial intelligence market grew. But with DeepSeek showing that

it's possible to develop a service similar to OpenAI's ChatGPT without having cutting edge AI chips from NVIDIA. A lot of investors were kind of on edge thinking like the kind of impact DeepSea could serve from there and if they should diverge their investment route from there as well to invest in more diverse sectors.

And the rise of Chinese AI technology, I think, also presents a new investment opportunities for Korean investors. But I think a lot of people are still kind of remaining cautious due to the fact that there are still some trade tensions that remain between China and the United States. And there are also some sort of regulatory risks in China.

from the US as well. And so South Korea has kind of historically faced challenges based on like balancing their economic ties with both the US and China. And so a lot of investors have been kind of concerned about that as they see that investing in Chinese tech companies could be seen as something that's a little bit riskier due to the potential for maybe government intervention or like tightening regulations or trading restrictions. But right now,

those concerns aren't like, you know, like it hasn't been made into reality. So a lot of people are still sort of turning to it, but a lot of people are still kind of voicing their concerns about, you know, making this new decision in their life. Right. Maybe the concerns have always been there, but now the profitability and the potential that we see in these stocks have overridden the concern. Yeah, you're totally right. Yeah. For those areas. Yeah.

And so far, I think there's no definitive evidence to connect this growing trend to DeepSeek. But I think it's safe to assume that this Chinese AI chatbot had played a very important role in this transition. Even though this company DeepSeek is not publicly listed yet,

There are many other Chinese technology companies that have led the gains in the Chinese stock market. And there's even a term of the so-called Terrific 10, a group of Chinese tech companies, giants that have been compared to the magnificent seven on the Wall Street. So what are these popular Chinese tech stocks among South Korean investors? And is

Is there a kind of a channel, special channel they use to invest in the Chinese stock market, like maybe through a media, South Korean agency or establishing an account on the Chinese stock market directly? I'm not sure if they're as popular as US stocks at the moment, but they are definitely gaining popularity in recent years.

Chinese tech companies, especially those in AI, e-commerce and green energy and internal services like cloud computing, they are becoming attractive investment options due to its rapid growth and the expansion of the Chinese tech sector. And so as part of the investors'

you know, I guess strategy of diversifying their global portfolio, Chinese tech stocks have served as some sort of exposure to the growing Chinese economy, as well as investors believing that these companies have significant growth potential. As for channels, brokerage platforms that have simplified the process of foreign stock trading,

have been used by Koreans to trade international shares. But there's also ETFs or exchange traded funds and index funds that are tracking the performance of Chinese tech companies too. So those two platforms have been the most popular in Korea.

So the release of DeepSeek had sparked debates about whether America is losing the dominance in the global tech race. But the difference, the gap between South Koreans' individual investments in the American stock market and the Chinese one is actually still pretty huge, the difference. The most recent data that I have is that in November last year,

South Korean individual investors investment in America actually surpassed a hundred billion US dollars for the first time and last month their investment in the Chinese one soared to almost 800 million US dollars so the difference is still pretty huge even though their investment in the Chinese one has been seen quite significant growth

And so following these debates between the rise of Chinese tech products and the American one, do you think South Korean investors, they are changing their perception of the U.S. tech sector and perhaps in terms of investment?

The US still remains quite a dominant player, like you said, but the increasing prominence of Chinese tech firms has made South Korean investors kind of re-evaluate their strategies and perceptions, especially regarding the Chinese tech companies' growth potential and their competitiveness value.

And so South Korean investors who are always looking for the best growth opportunities so they can also earn the most cash may now perceive the U.S. tech sector as facing increased competition from Chinese companies like Watt.

Firms like Alibaba and Baidu are rising as competitors against US-based companies and sectors like AI and cloud strategy. South Korean investors no longer see the US tech sector as the sole leader in innovation in terms of foreign investments. It could also make them divert into choosing different options here and there.

And as Chinese tech firms, they continue to grow and expand globally. Many South Korean investors are increasingly allocating their capital to Chinese tech stocks. And this kind of, I think, could be driven by the perception that China's rapid technological developments, it offers unique opportunities for side returns, which is what the South Korean investors would always want from their investments.

So the American stock market is still undoubtedly the most popular one, but now it appears there's a second option emerging for the individual investors. And now, despite the popularity of DeepSeek, the South Korean government had actually released a temporary ban on this Chinese AI chatbot over data privacy concerns.

And I'm wondering, are there other Chinese tech products that are common in South Korea? And what's the general public perception of these Chinese tech products? Chinese tech products have become quite common in South Korea over the years. Like, for example, Xiaomi and their household products are pretty common. Like I have a Xiaomi vacuum cleaner as well. How is it working out for you?

It's pretty good, actually. It does the job, which is, you know, great, which is all I ask for. But other than, you know, household products, smartphone brands like Xiaomi and Huawei, as well as e-commerce platforms like AliExpress, Taobao, Shein, they have gained like immense popularity in Korea as they provide access to affordable and diverse products that

Sometimes they offer the same kind of products as like, I guess, what a Korean company would offer. It has the same, you know, features and everything, but it's just a lot more cheaper, which makes people, you know, divert to the Chinese products.

I guess tech companies and what they offer as well. But I think the perception of Chinese tech products in Korea are quite mixed just to focus on something like Deep Seek, for example. Many consumers acknowledge that Chinese tech products offer good quality at affordable prices and it makes such products more appealing to especially those consumers who are more, I guess,

budget conscious of like the money that they spend. But there are also some who are very cautious about Chinese technology and they cite like security concerns with it. A lot of them talk about how the Chinese government, it holds like a certain influence over domestic companies and they like hold track records of like

I guess, censorship and surveillance. And it leads to concerns about, you know, their private data being collected by these Chinese tech companies. And I think the deep-seek ban is definitely a reflection of these concerns. So while the chatbot might have seemed like a huge, like, you know, technological breakthrough, its potential to

Collect and store sensitive information kind of raised alarms about user information safety in Korea too. So now, apart from investing in the Chinese stock markets, do you see South Koreans showing more interest just to getting to know more about the neighboring country in general?

In South Korea, a lot of people are increasingly showing interest in learning more about China, definitely. For example, Mandarin Chinese is one of the most popular foreign languages that are learned in South Korea in recent years. It's kind of driven by China's economic rise and also how much more companies and, I guess, educational institutions are favoring candidates who have, let's say, a Chinese language background.

not a degree, but like a certification that's proof that they're fluent in that language.

And they're basically beginning to recognize the importance of understanding Chinese culture and language to also be able to navigate through the Chinese market and consumer base. And also just to, you know, get to interact with these people because they do have some sort of prominence in the continent. And there's a lot of people who are traveling to China as well. Like Shanghai has recently become a very popular tourist destination for a lot of Koreans here.

I know a lot of Chinese tourists come to Korea as well. So it's kind of like a vice versa thing. Interest in Chinese foods has grown also very significantly, like dishes like malatang. It remains as a very staple Chinese dish that a lot of Koreans appreciate. But there are also still some who remain with negative sentiments toward Chinese people and the country, particularly those are kind of driven by like conspiracy theories that are formed under

geopolitical conflicts and stereotypes that they hold over China and its people. But not everyone is like that. And I can say that there's more people who are trying to learn more about China in a more positive way than those who are just like refusing to acknowledge the country at all.

So this investment trend is leading some changes culturally as well. And before we wrap up, I just want to say that neither I nor Changzhu is an investor in the stock market. And this episode is only for informational purpose and does not constitute any investment advice.

And the Chinese stock market, they say actually a phrase, a reminder that the stock market is risky and invest with caution. So if anyone is considering investing, so always do your own research and consult with a qualified financial advisor before making any investment decisions. And with that being said, thank you very much, Changzhu, for your time and join us again. Thank you.

From DJI's dominance in drones and Kato's breakthroughs in battery technology to the rapid rise of electric vehicles and the explosive growth of robotics, China's innovation engine is redefining industries worldwide. It now enters Deepsea, a Chinese AI powerhouse whose R1 chatbot is going toe-to-toe with the best in the world, operating at 96% lower costs than competitors like OpenAI's GPT-4.

But Deep Sea's rise might just be the beginning. The world is finally taking notice of China's expanding tech prowess, and the next chapter is only just unfolding.

And that brings us to the end of this episode of Deep Dive. If you enjoyed what you just heard, don't forget to follow us on your podcast platforms. Just search for Deep Dive. You can also leave a comment to let us know what you want to learn about China and beyond. This episode is brought to you by me, Li Yunqi, and my colleagues Zhang Zhang and Qi Zhi. Special thanks to the Korea Herald reporter, Li Zhangzhu. I'll see you in the next one.