Last Monday, rumors circulated that China would relax its zero Covid policy. Reuters reported the same
story on Nov. 3. In addition, media reported that Chinese firms are getting closer to meeting SEC
requirements for auditing.
The most widely-followed China tech stocks rallied. Alibaba (BABA) gained 9.52% last week. Baidu
(BIDU) added 8.5% and JD.com (JD), a retailer, gained an incredible 17.22%.
In hindsight, China tech stocks stopped their downtrend. President Xi’s third term re-election was peak
pessimism. Xi has no political obstacles after reappointing his allies. Unfortunately, those in high
positions do not have a strong background in economics or science and technology.
Read the Sentiment
The sentiment reversed from full fear to relief. China tech firms are the best trading stocks for
speculators. Those who can read the sentiment shift before the markets do will earn around 20% for each
trade.
Investors who want to buy and hold for 10 years or longer should avoid China tech. The sector has an
unclear outlook. The country signals change for the better only to impose contradictory rules and
regulations.
The long-term direction appears negative.
The U.S. and China trade barriers will continue. American firms will decrease their manufacturing
exposure in the country. That hurts investors and Chinese firms in the long run.