Key points:
- China’s alternatives to US tech: With Beijing supporting key tech industries and market valuations more attractive than U.S. counterparts, China’s tech plays could be an alternative for investors seeking long-term growth beyond the dominant U.S. giants.
- Key sectors: Easing regulatory stance on tech innovation offers diverse opportunities beyond the Magnificent 7, particularly in AI, semiconductors, cybersecurity, and EVs.
- E-commerce and consumer tech growth: Despite economic challenges, China's e-commerce giants like JD.com, Pinduoduo, and Meituan continue to dominate, with innovations in live-streaming and social commerce driving growth.
While the Magnificent 7 have dominated U.S. markets, China’s tech landscape offers compelling alternatives, particularly as Beijing increases support for the sector. With regulatory pressures easing and AI, cloud computing, and semiconductors driving growth, investors are looking at China’s version of big tech and beyond.
Here are some key tech themes and companies to watch in China:
Semiconductors: China’s Answer to Nvidia and AMD
China’s push for semiconductor self-sufficiency has created opportunities in domestic chipmakers as U.S. restrictions on AI chips accelerate the need for local alternatives.
- SMIC (0981.HK) – China’s largest contract chipmaker, crucial to the country’s semiconductor ambitions.
- Hua Hong Semiconductor (1347.HK) – A rising player in foundry production, supporting China’s domestic chip needs.
AI and Cloud Computing: China’s Answer to Nvidia and Microsoft
China is racing to develop its own AI ecosystem, with companies investing heavily in large language models (LLMs), AI chips, and cloud infrastructure.
- Alibaba (BABA) – China’s leader in cloud computing and AI, with Alibaba Cloud playing a central role in the country’s tech development.
- Baidu (BIDU) – A key player in AI, with its Ernie AI model positioned as China’s answer to ChatGPT.
- Tencent (0700.HK) – With strengths in cloud computing and AI applications, Tencent is well-positioned in gaming, social media, and enterprise services.
E-Commerce and Consumer Tech: China’s Answer to Amazon
Despite economic uncertainty, China’s e-commerce giants remain dominant, while new retail innovations like live-streaming and social commerce are driving growth.
- JD.com (JD) – A major e-commerce player with a logistics edge, positioning itself as China’s Amazon.
- Pinduoduo (PDD) – A rapidly growing discount e-commerce platform, now expanding globally with Temu.
- Meituan (3690.HK) – A leader in food delivery, travel, and local services, tapping into China’s consumer spending trends.
EVs and Smart Cars: China’s Answer to Tesla
China leads the global EV market, with domestic brands taking market share from Tesla. Companies involved in autonomous driving and battery innovation are also gaining traction.
- BYD (1211.HK) – The world’s largest EV manufacturer, expanding aggressively in Europe and Southeast Asia.
- XPeng (XPEV) – A rising EV player with a strong focus on autonomous driving technology.
- Li Auto (LI) – Leading in extended-range EVs, with a focus on premium models.
Smart Devices: China's Answer to Apple and Samsung
- Xiaomi (1810.HK) – Consumer electronics & expanding into EVs.
- Huawei – AI-driven smartphones & 6G technology.
Cybersecurity and Software: China’s Answer to CrowdStrike and Palo Alto Networks
China is investing in cybersecurity as a strategic priority, with domestic firms benefiting from the shift away from foreign tech providers.
- Qi An Xin (688561.SS) – China’s leading cybersecurity firm, benefiting from growing demand for data protection.
- Venustech (002439.SZ) – A rising cybersecurity player in China, focusing on cloud and network security.
