New China ETFs test investor appetite amid Sino-U.S. tech war, market rout

A man wearing a protective mask is seen inside the Shanghai Stock Exchange building, as the country is hit by a new coronavirus outbreak, at the Pudong financial district in Shanghai, China February 28, 2020. REUTERS/Aly Song

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SHANGHAI, Sept 23 (Reuters) – Five Chinese tech-focused ETFs launched on Friday, testing investor appetite for chipmakers, new materials producers and machine tool manufacturers amid an escalating Sino-U.S. tech war, and a global rout in tech shares.

The new batch of exchange-traded funds (ETFs) were given regulatory approval at record pace over the weekend, in an apparent effort by authorities to bolster battered tech stocks ahead of the politically key Communist Party Congress next month. The approval took two days versus weeks for other funds, according to regulatory filings.

Two of the ETFs will invest money into the stocks of the 50 biggest chipmakers listed on Shanghai’s STAR Market, including Semiconductor Manufacturing International Corporation (SMIC) (0981.HK) and Montage Technology Co (688008.SS).

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Two others will put money into the biggest makers of key strategic materials listed on STAR, such as Western Superconducting Technologies Co (688122.SS) and Ningbo Ronbay New Energy Technology Co (688005.SS).

Another new ETF will invest in high-end machine tool makers, such as Avic Aviation High-technology Co (600862.SS).

The ETFs’ fundraising, which end next Tuesday, comes amid a global sell-off in tech shares, as aggressive U.S. monetary tightening – including another big interest rate hike by the Federal Reserve on Wednesday – dampens risk appetite. read more

It also comes amid heightened geopolitical tensions and tech rivalries between China and the United States.

The Biden administration took fresh steps in recent weeks to support domestic tech sectors and cut economic reliance on China, sending shares in Chinese biotech and new energy lower. read…

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