The next investment target, China?

The US election result is likely to benefit China as the trade tension cease (read the investment note here). Over the past 4 years, US had strategically used various tools against China including imposing tariff. China on the other hand has become better prepared and shifted its target from relying on external economies to “internal circulation” via “dual circulation” strategy. Hence, the US election shall have lesser impact on China’s economy compared to the past.

China is the world’s second-biggest economy. Its economy grew 4.9% between July and September 2021, compared to the same quarter last year. China is now leading the global recovery based on its latest gross domestic product (GDP) data.

Last week, China’s market regulator has taken its first step towards curbing the monopolistic power of its tech giants with the announcement of draft of antitrust rules. This has in turn made the share prices of tech companies like Alibaba, Tencent, Meituan drop.

On one hand, the fundamental of these companies is solid. The technology and internet economy are likely to be used widely in the future considering the people now are used to work from home and rely on internet shopping more than ever after. The shock of the pandemic has reinforced the trend of digitalization and internet-based businesses. The sales and earnings for these companies are seen to increase sharply during this pandemic period. The share prices of the China tech companies are now lower while the fundamental remains solid, I personally feel that it is a good opportunity for investment in China specifically technology companies.

There are various funds available in the market currently for China market. If you are interested, do contact me.

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