What is the US Section 1260H list?

The Section 1260H list identifies companies that the US government deems to be supporting the Chinese military.

Why is UBS optimistic about China's tech sector?

UBS highlights strong AI innovation, significant capital expenditure growth, and improving US-China diplomatic relations as key drivers for the sector.

Are Alibaba and BYD confirmed to be on the US military list?

No, the report is unconfirmed, and companies like Alibaba have stated there is no basis for their inclusion.

Home / Business and Economy / China Tech: Ignore Headlines, Focus on Growth

China Tech: Ignore Headlines, Focus on Growth

29 Nov

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Summary

UBS advises investors to disregard US military list concerns.
China's AI sector shows strong innovation and growth potential.
Improving US-China diplomatic relations ease market fears.

China Tech: Ignore Headlines, Focus on Growth

Global wealth management chief investment officer at UBS, Mark Haefele, is advising investors to concentrate on the resilient fundamentals of the China tech sector, despite recent reports suggesting that companies like Alibaba, Baidu, and BYD might be added to a US military support list. Although such news initially caused Hong Kong-listed shares to underperform, UBS stresses that the report is unconfirmed and that companies involved have refuted the claims.

The bank argues that the ongoing advancements and significant year-over-year increase in AI capital expenditure within China's AI firms present a strong case for investment. With China's AI spending projected to grow substantially compared to US spending, there remains ample room for expansion and development. This fundamental strength, UBS believes, should outweigh short-term market volatility.