Investors Shift to Chinese Equity Derivatives for AI Exposure Amidst Crowded Korean and Japanese Markets

Traders are increasingly turning to Chinese equity derivatives as they seek more affordable investments in the artificial intelligence sector. After a two-year focus on South Korean memory chip stocks and Japanese semiconductor companies, investors are now looking to capitalize on what they perceive as better valuations within China's expanding tech landscape.

This trend is particularly evident in the offshore perpetual futures market, where platforms such as Hyperliquid and tradeXYZ are facilitating significant trading volumes. For instance, perpetual futures linked to Unitree Robotics exceeded $105 million in trade volume within 24 hours of the company's IPO, while CXMT, a Chinese memory chipmaker, recorded approximately $66 million in open interest shortly after its listing in July 2026.

The shift in investment strategy is also reflected in the actions of major fund managers. Value Partners has divested from Taiwanese and South Korean AI stocks to invest in cheaper Chinese alternatives. Additionally, Korean retail investors have reportedly funneled hundreds of millions into Chinese semiconductor and AI stocks in early 2026, as China's Star 50 index, which tracks innovative companies, achieved around 29% returns year-to-date through mid-August 2026, outperforming the broader CSI 300 index.

Despite the appeal of these investments, the regulatory environment remains complex. Chinese authorities have imposed restrictions on speculative trading, and the use of offshore derivatives to bypass capital controls exists in a legal gray area. While perpetual futures offer a liquid and accessible means for foreign investors to engage with the Chinese market, they also carry inherent risks, including potential regulatory changes and market volatility.

© 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Source: KLEA News