Chinese investors eye chips, renewables to avoid a regulatory blizzard


Several Chinese investors have started shifting their focus towards renewable energy, semiconductor, and consumer-focused firms amidst the rising regulatory crackdown that has hampered stakeholder confidence, forcing funds to overhaul their respective portfolios.

The months of scrutiny by China’s Communist Party leadership have hammered shares in big tech and tutoring sectors, a push to pursue common prosperity by compromising the private-sector profit.

Although this regulatory action has wiped off billions from companies such as Tencent and Alibaba, shares of the firms that are on the right side of regulation have managed to surge.

For instance, China's indexes of clean energy stocks, as well as that of semiconductor firms, were up by 30% since June, as compared to a 5% decline in the broader market. Even Hong Kong tech shares had dropped by 15%.

Other investors that are sifting state media as well as President Xi Jinping's books for policy clues identified one that focuses on lowering greenhouse gas emissions. This is actually in line with China’s broad goals for reaching peak carbon emissions in the year 2030 and carbon neutrality by 2060.

Similar goals for driving domestic demand as well as a home-grown population have reportedly put support under China-listed consumer discretionary industrials and firms. In this context, sources claimed that since renewable, electric vehicles, and semiconductors are receiving ample support, investors are shifting their focus from a self-sufficiency standpoint.

Apart from this, China has also announced a five-year plan for greater regulation of various parts of the economy, offering a sweeping framework for the far-reaching crackdown on key sectors that again, has left investors reeling.

The newly released document also mentioned that law enforcement will be reinforced in sectors ranging from food & drugs to artificial intelligence and big data analytics.

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