Nearly 60 percent of Middle Eastern sovereign wealth funds plan to increase their allocations to Chinese assets over the next five years, according to Invesco’s latest global sovereign asset management study. The remaining 40 percent are expected to maintain their current investment levels.

The report highlights even stronger interest among sovereign funds in Asia-Pacific and Africa, where 88 percent and 80 percent, respectively, intend to boost their exposure to China. In North America, 73 percent of funds indicated they are open to investing in the Chinese market.

Respondents pointed to several key factors driving this shift, including strong historical returns in China (71 percent), the benefits of portfolio diversification (63 percent), and improved access to the Chinese market for foreign investors (45 percent).

The study found that the sectors attracting the most interest include digital technology and software, advanced manufacturing and automation, and clean energy and green technology.

Martin Franc, Invesco’s CEO for Asia excluding Japan, said investors are encouraged by Beijing’s supportive policies and view China as a promising hub for innovation.

“Their growth story has only a limited amount to do with what happens in the West. So, it is phenomenal for political and capital diversification,” the study quoted a Middle East-based sovereign wealth fund as saying.

The survey gathered responses from 141 senior investment professionals, including chief investment officers and heads of asset classes, representing 83 sovereign wealth funds and 58 central banks. Together, these institutions manage assets worth $27 trillion.