YICAI｜Nearly Half of Investors Are Confident in Chinese Tech Sector Despite Trade Tensions, Survey Shows
(Yicai) May 16 -- Almost half of investors surveyed by Cheung Kong Graduate School of Business believe that the trade tensions between China and the United States will present more opportunities than challenges to the Chinese technology sector.
Forty-six percent of respondents think the tariff war will have more positive than negative effects on the Chinese tech sector in the long run, according to the findings of the Investor Sentiment Questionnaire Survey (CKISS). Twenty-eight percent anticipate long-term negative impacts, and around 20 percent expect no significant long-term impacts.
Cheung Kong Graduate School of Business conducted the Investor Sentiment Questionnaire Survey (CKISS) in April, polling 1,300 ordinary retail investors and 800 financial industry professionals. The survey results were released yesterday.
The main impact of the China-US technological decoupling is reflected in areas such as artificial intelligence and semiconductors, which will force China to improve its innovation efficiency, said Liu Jin, professor of accounting and finance and director of the Investment Research Center at Cheung Kong Graduate School of Business.
However, the trade frictions between China and the US will also impact other strategic technology sectors, such as biopharmaceutical, Liu noted, adding that decoupling in these sectors is unlikely.
More than half of the surveyed investors consider China a world-leading AI power. Sixty percent believe China will make significant progress in the biopharmaceutical field in the next decade.
While the valuation of some listed Chinese tech companies may be affected by the trade war in the short term, confidence in the capital market is gradually recovering as China's original innovation achievements become more apparent and firms further explore the domestic and developed markets, Liu pointed out.
Investors' confidence in the Chinese economy, however, was significantly affected by the escalation of the China-US trade war this year, as they pay particular attention to international relations, Liu said.
Nearly 64 percent of survey respondents considered China-US relations a major factor affecting investment in April, as it increased investors' risk-aversion sentiment. Sixteen percent said they were willing to increase investment in gold in the period.
In April, over 61 percent of respondents believed that Chinese mainland stocks will rise, a decrease from last November but an increase from last July, according to the survey.
Since the beginning of the year, investors have expected their returns on Chinese mainland shares to grow, Liu noted, adding that this is a "positive aspect."
External challenges will accelerate China's internal economic structural adjustments, with companies focusing on how to expand domestic demand, according to Liu.
The survey results also showed that investors are paying more and more attention to the private economy. Nearly 45 percent of respondents considered the status of the private economy to be very important for future investment decisions.
Regarding how to boost private entrepreneurs' confidence, about 74 percent of investors believed that strengthening continuity and stabilizing macroeconomic policies are essential.