The technology race between the U.S. and China can be linked directly to the amount of business investment that each nation receives. The U.S., at one point, stood head and shoulders above its rival, but that gap is now narrowing, which would make way for gains in China-focused technology ETFs.
“When it comes to assessing the relative strengths of China and the U.S. in the tech field, most analysts look for the amount of venture investment that the sector attracts,” wrote Samuel Bocetta in a Daily Caller article. “For U.S. citizens, those figures make for sobering reading. As CNBC reported earlier this year, the gap between venture capital investment in the Chinese tech sector is now just $6 billion less than the corresponding figure for the U.S.: $105 billion for China, and $111 billion for the U.S.”
“Rising investment in China has been spurred by the Chinese government’s ambition to make the country a tech superpower,” the article added. “Their Made in China 2025 policy initiative aims to build national companies into international high-tech champions, for instance, and the government is also investing heavily in mobile internet tech and the internet of things (IoT).”
As China looks towards more independence and less reliance on other nations for bolstering its technological initiatives, these ETFs are worth a look:
- 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.
- 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.
China Backs the Blockchain
China continues to bolster its global position as a purveyor of cryptocurrencies and its underlying technology, blockchain, as the Bank of China is utilizing the technology to issue $2.8 billion in financial bonds, according to a Cointelegraph report.
ETF investors sensing an opportunity can look to blockchain-focused funds like the Reality Shares Nasdaq NexGen Economy ETF (NASDAQ: BLCN). BLCN seeks long-term growth by tracking the investment returns, before fees and expenses, of the Reality Shares Nasdaq Blockchain Economy Index, which is designed to measure the returns of companies that are committing material resources to developing, researching, supporting, innovating or utilizing blockchain technology for their proprietary use or for use by others.
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