With Alibaba’s intentions to reorganize, foreign investors are pouring into China. Money managers believe it is the latest evidence that the national government is becoming more business-friendly as economic growth accelerates.

After Alibaba announced its plan to break up and float its business segments last week, exchange data showed the net foreign purchases of mainland-listed equities daily for a quarterly record.

The stock rises this year, following huge drops in 2021 and 2022 as investors have become more optimistic.

Foreign investors, who had been missing as China’s markets and economy flared back to life after Beijing suddenly withdrew its zero-COVID policy in December, may be changing their minds.

In March, the MSCI China index (.dMICN00000PUS) rose 4.5%, while global stocks (.MIWD00000PUS) rose 2.8%. In addition, the Shanghai Composite (.SSEC) had its best quarter in over two years, rising 5.9%.

Allspring Global Investments portfolio manager Derrick Irwin said the Alibaba split and founder Jack Ma’s return to China appear part of the government’s outreach to entrepreneurs.

“This may revive private investment,” he remarked.

Since late 2020, China has cracked down on several industries, placing startups and huge corporations in limbo. For example, E-commerce companies like Alibaba were fined for monopolistic activity.

Rob Brewis, a portfolio manager at UK-based Aubrey Capital Management Ltd., said the company has returned to Chinese shares this year due to economic rebound optimism and inexpensive valuations.

After two years, Aubrey purchased Alibaba early this year. Brewis, who wanted “good exposure,” praised Alibaba’s recent moves.

In the five days following Alibaba’s announcement, its shares (9988. HK) have risen 14%, and 11.7 billion yuan ($1.7 billion) has entered China’s markets.

That’s more than February’s net 9.2 billion yuan inflows and boosted March flows to 35.4 billion and the quarters to a record 186 billion.

Because Alibaba and its billionaire founder were high-profile targets during the crackdown, investors saw its ambitions as a sweeping policy change.

The 11th-hour cancellation of Ant Financial’s $37 billion public offering in November 2020 led to unanticipated government and regulatory scrutiny that drove Alibaba shares down 80% over two years to last October.

Last week’s announcement follows government assistance. Premier Li Qiang told international investors that China would continue reform and opening up, boosting market access and improving the business climate.

According to a note reviewed by Reuters and a source familiar with the situation, a recent BofA Securities study revealed that 67% of US investors now see China take more business-friendly steps. BofA Securities declined to comment.

T. Rowe Price portfolio manager Ernest Yeung predicted “a gradual stabilisation” of private firms and the internet industry.

Last year, his team bought Alibaba, focused on “forgotten or out-of-favour” stocks.

How China balances business and politics is a mystery.

Allspring’s senior investment strategist Brian Jacobsen said investors will monitor “if this is like Mao’s ‘Let a hundred flowers blossom’ campaign that will easily be overturned if it doesn’t help the Party.”