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Cao Li

Global index provider MSCI revised its China gauge on Wednesday, swapping property and conglomerates for semiconductor and artificial intelligence stocks in a sign of technology’s rising role in the economy.
The MSCI China Index added tech stocks including SenseTime, Pony.ai and Hesai Technology for a second straight quarter of net constituent growth since late 2025, a move analysts said would accelerate capital flows into the country’s technology sector.
Against a macro backdrop of a relatively weaker US dollar and investors seeking greater diversification, Asia’s emerging equity markets, particularly China, have clearly attracted increased attention from offshore institutional investors, according to Shujin Chen, chief economist at CSOP Asset Management.
While passive funds tracking the index have been flowing in since late last year, Chen said “over the past one to two months, we’ve seen active funds from other parts of Asia as well as Europe show growing interest in China, with some capital starting to flow in”.
“Further inclusion of Chinese tech stocks will likely accelerate that trend,” she added.

Chinese tech stocks have gained significantly since early last year following a breakthrough by AI start-up DeepSeek. The momentum has been further reinforced as China stepped up efforts to compete with the US in an AI arms race.
The MSCI China Index, which is heavily weighted towards technology and related sectors, has risen more than 25 per cent over the last 12 months.
The 37 additions to the index include 33 traded on the mainland’s stock exchanges and four in Hong Kong. The 16 cuts include the distressed Chinese developer China Vanke, following the deletion of Country Garden in 2024 and China Evergrande in 2022. The net addition of 21 stocks is the largest since May 2023.
The benchmark saw its first net addition of Chinese equities last November, when 26 were added and 20 were ejected, reversing nearly two years of net cuts.
The recent additions underscore the growing importance of Chinese equities in overseas investors’ portfolios, analysts said.
“It reflects strong economic momentum in China,” said Kenny Ng Lai-yin, a strategist at Everbright Securities International.
MSCI rebalancing tends to have more sustained flow impact than other index events, because it is a major benchmark for both passive and active investors globally, according to Vincent Che, head of equities at Ping An Asset Management (Hong Kong).
“MSCI-related flows tend to be more persistent,” said Che, who believes the biggest impact would be on the individual names being added or removed. He said he remained positive over the long term for the broader technology and AI themes.
SenseTime said in a statement on Wednesday that its inclusion in the index reflected international investors’ recognition of the company’s core technological strengths in AI, long-term strategic direction, steady commercialisation progress and strong corporate governance standards.
“The inclusion is expected to broaden SenseTime’s appeal to long-term value investors and provide more stable capital-market support for its sustainable growth,” the statement said.
MSCI reviews its index constituents every quarter, based on a review of stocks’ free float-adjusted market capitalisation. The latest change will take effect on February 27 after the market close.
The changes to the MSCI China Index will also flow through to its parent indices – the MSCI Emerging Markets Index, where China had a 26.6 per cent weighting at the end of January, and the MSCI All Country World Index, where it had a 3.1 per cent weighting.
“The changes largely reflect shifts in market capitalisation across major sectors,” said Kenny Tang Sing-hing, chairman of the Hong Kong Institute of Financial Analysts and Pro­fessional Commentators.
“Most of the additions are tech, AI and smart-driving-related names. You can see that the Hang Seng Tech Index has recently outperformed the Hang Seng Index, which has lifted the market caps of these stocks.”


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A net 21 stocks were added to the MSCI China Index, including SenseTime, Pony.ai and Hesai Technology


A net 21 stocks were added to the MSCI China Index, including SenseTime, Pony.ai and Hesai Technology.


Index compiler MSCI tilts towards Chinese tech stocks in latest revamp

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}A net 21 stocks were added to the MSCI China Index, including SenseTime, Pony.ai and Hesai Technology

A net 21 stocks were added to the MSCI China Index, including SenseTime, Pony.ai and Hesai Technology