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As investors continue to trade with the government, shares of Chinese energy companies have been piled up this month, with the exception of the technology sector.
According to Morgan Stanley, Beijing’s move to strengthen regulatory scrutiny in key strategic sectors will benefit areas such as advanced manufacturing, technological localization and renewable energy – in line with the government’s long-term goals.
China’s CIS New Energy Index has risen 55 percent in the past three months, while the Hong Kong Hang Singing Tech Index – which includes China’s largest technology companies – has fallen 12 percent in domestic exchange rates over the same period.
A series of recent regulatory measures have knocked tens of billions of dollars into the assets of some of the country’s largest technology groups, such as Alibaba and Tencent. China has a five-year plan to strengthen control over strategic sectors, including technology and health care.
In this climate, investors need to be confident that the company’s initial business is in line with the government’s long-term strategic goals, says Tempelton Emergen Markets Investment Trust.
“Strict control activities. . .[are due to]”Beijing’s commitment to China’s development of a” modern socialist economy “includes key technologies, common prosperity, green development and freedom in key technologies and industries,” Templeton analysts wrote.
President Xi Jinping’s goal of achieving carbon neutrality and high carbon emissions by 2030 has boosted investors’ optimism about the clean energy sector.
“We will choose areas that will benefit from the global reopening and will not be easily exposed to energy regulation and slimming regulations,” said Mark Hafele, chief investment officer at UBS Global Resources Management.
China-based exchanges focused on green energy issues in the first half of the year.
“We are positive for those in the renewable energy sector, especially in the solar supply chain” Exposed to battery lithium, said Kai-Kong Chai, general manager of the Greater China Stock Exchange in Hong Kong, Manuelif.
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