Mainland Chinese investors have poured a record $90 billion into Hong Kong stocks in the first half of 2025, fueling a 21% rally and reshaping a market long neglected by global funds. Drawn by lower valuations, better dividends, and Hong Kong’s strategic role in the U.S.-China rivalry, investors are shifting funds away from underperforming mainland equities. Daily trading via Stock Connect has surged, with mainland investors now accounting for half of Hong Kong's turnover, up from 30% in early 2024. The valuation gap between A-shares and H-shares has narrowed to a five-year low, though capital controls maintain some divergence. High-dividend stocks and major tech firms like Tencent Holdings, Alibaba Group, and Xiaomi Corporation, key players in China's tech ambitions, are among top picks.