What are China’s quantitative trading funds, and why are they so controversial?

China’s quant funds face scrutiny from retail traders and regulators, driven by their large returns and use of AI The country’s quant industry has grown rapidly in recent years. Quant-focused private funds exceeded 3 trillion yuan (US$444.5 billion) in size last year, according to Zheshang Securities. The number of quant funds managing more than 10 billion yuan rose from 55 at the end of 2025 to over 70 by June of this year, accounting for about half of all China-based funds above that threshold. Leading players include Hangzhou-based High-Flyer, which trades only its own capital and gained global attention for developing AI trading systems and supporting DeepSeek.

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