Despite agreeing to a “phase one” trade deal, the U.S. and China will still be locking horns when it comes to utilizing the latest/greatest technology. Investors should continue to see a one-upping battle between the two nations heading into 2020.
“As we approach 2020, the heated technology conflict between the U.S. and China shows no signs of a thaw,” wrote Zak Doffman in Forbes. “U.S. President Trump’s campaign against leading Chinese technology firms—including but not only Huawei—may have grabbed the headlines, but there is also China banning most leading U.S. consumer content-based technologies, Russia architecting its sovereign internet, political pressure on western tech players over international research collaboration. As we approach 2020, a decade and more of ever-tightening technology globalisation looks very much at risk.”
China will go to great lengths in order to obtain tech dominance, as evidenced by “Huawei’s role in international 5G networks and on China using its influence to curb political criticism of its domestic policies”—Doffman noted in the Forbes report.
“You don’t have to look hard to find evidence that the Chinese government is willing and able to use its growing influence over global commerce to advance its own interests,” said Federal Communications Commission Chairman Ajit Pai to the Council on Foreign Relations.
As China continues to up the ante on technology, here are a few ETFs to consider:
- Global X MSCI China Information Technology ETF (CHIK): CHIK tries to reflect the performance of the large- and mid-capitalization segments of the MSCI China Index that are classified in the Information Technology Sector as per the Global Industry Classification System.
- KraneShares CSI China Internet Fund (NasdaqGM: KWEB): KWEB tracks a portfolio of Chinese internet and internet-related companies. The portfolio includes Chinese internet companies that provide similar services as Google, Facebook, Twitter, eBay and Amazon.
- Invesco China Technology ETF (NYSEArca: CQQQ): CQQQ is based on the AlphaShares China Technology Index, which is designed to measure the performance of the investable universe of publicly-traded information technology companies open to foreign investment that are based in mainland China, Hong Kong or Macau.
China is also in the forefront of blockchain technology while the U.S. is still hesitant to embrace derivatives of blockchain tech like cryptocurrencies. Look for China to continue expanding blockchain usage in 2020.
For ETF investors looking specifically for a China-focused blockchain ETF, they can opt for the Reality Shares Nasdaq NexGen Economy China ETF (NASDAQ: BCNA). BCNA seeks long-term growth by tracking the investment returns of the Reality Shares Nasdaq Blockchain China Index comprised of blockchain-related companies located in Hong Kong and mainland China. The index is designed to measure the returns of companies that invest in or utilize blockchain technology.
For more market trends, visit ETF Trends.