Some companies in China are going high-tech, and it could deliver a charge to the country’s exchange traded funds (ETFs).

A little-known company there, BYD Corporation, has rocketed to the number two producer of batteries in the world in less than a decade of existence. Next up, BYD (which stands for Build Your Dream) is planning a green-energy car, reports David Barboza for the New York Times.

China is no longer happy with being the home of low-cost, low-skilled, low-margin manufacturing for toys, clothes and other goods, and is taking on the world’s largest corporations for business, customers, power and, of course, recognition.

The two-fisted approach involves incentives for companies to innovate while discouraging low-end manufacturing from operating in Southern China. This step would discourage one of the crucial drivers for their past economic rise, and beginning the next phase of becoming a high-tech economic zone.

ETFS that would thrive in this environment:

  • SPDR S&P China (GXC), down 23.9% year-to-date
  • iShares FTSE/Xinhua China 25 Index (FXI), down 20% year-to-date
  • PowerShaes Golden Dragon Halter USX China (PGJ), down 26.8% year-to-date
  • NETS Hang Seng China Enterprises Index Fund (SNO), launched May 14

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.