China's ETF Market Soars Past 6 Trillion Yuan on Tech and Policy Push

BEIJING – January 05, 2026 – China's exchange-traded fund (ETF) market concluded an extraordinary year in 2025, shattering records as its total value surged past the 6 trillion yuan (US$858.5 billion) milestone. The market added an astonishing 2.3 trillion yuan (US$329.1 billion) in assets, an annual increase that was larger than the market's entire size at the end of 2023. This explosive growth, representing a 34.7% annualized rate over the last five years, was fueled by a potent combination of retail investor enthusiasm for homegrown technology, robust economic resilience, and significant state-backed policy support.

The blistering rally saw the benchmark Shanghai Composite Index climb over 18%, its best performance since 2020. However, the real story was in the technology sector, where the tech-heavy ChiNext Index skyrocketed by nearly 50%, signaling a year-long "technology bull" market. This investor frenzy translated into a staggering 1.3 trillion yuan in net inflows into ETFs, as both institutional and retail investors sought efficient vehicles to gain exposure to the nation's evolving economic narrative.

The 'DeepSeek Moment' and the Tech-Fueled Rally

A significant catalyst for the market's tech mania was the "DeepSeek moment" in early 2025. The launch of a powerful new AI model by Chinese startup DeepSeek, which demonstrated capabilities rivaling global leaders like OpenAI's GPT-4o at a fraction of the cost, sent shockwaves through the global technology landscape. The app quickly topped download charts in the U.S., serving as a tangible symbol of China's accelerating prowess in artificial intelligence.

This breakthrough ignited investor sentiment, leading to a widespread re-rating of Chinese technology stocks and a flood of capital into thematic ETFs. Sectors like AI, robotics, telecommunications, and semiconductors became the market's darlings. The uneven nature of the boom was stark: while tech-related industries soared, traditional sectors like consumer goods and real estate lagged, reflecting a clear investor pivot towards China's innovation-driven future. This trend was evident in the flow data, with ETFs exposição to Hong Kong-listed tech firms, gold, and securities companies—a proxy for bull market sentiment—drawing the most significant inflows.

Policy and Power: The State's Hand in Market Growth

The market's meteoric rise was not purely a function of sentiment; it was built on a foundation of deliberate policy. A sweeping nine-point guideline issued by regulators in 2024 laid the groundwork for the long-term development of China's capital markets, notably introducing a fast-track approval channel for ETFs. Throughout 2025, dozens of supporting rules were rolled out, streamlining the issuance process and accelerating the time-to-market for new products.

Moreover, the so-called "national team," comprised of state-backed entities like Central Huijin, played a crucial stabilizing role. These entities were observed making substantial purchases of broad-based market ETFs during periods of volatility, effectively placing a floor under the market and reinforcing investor confidence. This made passive index products a quasi-stabilization tool for policymakers, who have fully embraced index investing as a means to attract long-term capital and support the real economy.

This pro-growth stance was further supported by accommodative monetary policy, including rate cuts and lending facilities for key sectors, as Beijing pledged substantial support to achieve its annual growth targets. The government's emphasis on capital market reform and technological self-reliance created a powerful tailwind for the ETF industry.

ChinaAMC's Dynasty: A Strategy of Foresight

In this booming market, a clear "winner-takes-all" dynamic emerged, with a few dominant players capturing the lion's share of the growth. Leading the charge was China Asset Management Co. (ChinaAMC), which solidified its position as a titan of the industry. The firm's ETF assets under management (AUM) swelled by nearly 300 billion yuan in 2025 to reach 957.3 billion yuan, extending its reign as China's top equity ETF provider for the 21st consecutive year.

ChinaAMC's success was not accidental but the result of long-term strategic foresight. Its flagship CSI 300 ETF, a broad-market tracker, drew in over 28 billion yuan in new capital. Crucially, its thematic funds, launched years earlier, were perfectly positioned to capture the 2025 tech-centric zeitgeist. The ChinaAMC CSI Robotics ETF, for example, attracted 19.44 billion yuan, the highest among all A-share technology-themed ETFs.

"At ChinaAMC, we view ETF not merely a simple copy of indices, but a proactive vehicle to express our investment ideas based on future-oriented research," said Xu Meng, Executive Manager of Quantitative Investment at ChinaAMC, in a statement. "Products that were most sought after in 2025, such as AI, 5G and chips, were actually incepted six years ago, an embodiment of our forward thinking."

With 118 products, the asset manager boasts the market's most comprehensive product line. It manages two of the seven domestic mega-ETFs with over 100 billion yuan in AUM, underscoring its scale and deep entrenchment in Asia's largest ETF market.

A New Frontier Fraught with Old Risks

Looking ahead, the trajectory for China's ETF market appears steep. Some analysts project that assets could nearly quintuple to 17 trillion yuan by 2030, driven by continued product innovation, regulatory support, and the expansion of the investment advisory industry. The government's strategic focus on high-quality development and technological innovation, as outlined in its five-year plans, suggests that capital markets will remain a central pillar of its economic strategy.

However, this new frontier for global investors is not without significant risks. Persistent geopolitical tensions, particularly with the United States, remain a primary concern, capable of disrupting trade and rattling market sentiment. Domestically, the Chinese economy continues to grapple with a prolonged slump in the property sector and tepid consumer demand, which could introduce further volatility.

While supportive policies have been a powerful engine of growth, the market's reliance on state intervention raises questions about its long-term organic stability. For now, China's ETF market represents a landscape of immense opportunity, but investors navigating this dynamic environment must remain acutely aware of the complex interplay between technological promise, policy direction, and ever-present geopolitical and economic risks.