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How is China’s Technology Sector Faring During the Coronavirus Epidemic? | EMQQ

Comments from Kevin Carter, Co-Creator of the EMQQ Emerging Markets Internet and Ecommerce UCITS ETF (LSE: EMQQ).

China has been demonstrating to the world how to stymie the spread of COVID-19. Centralized authority with its ability to impose a country wide lockdown with speed was teamed up with an already virus conscious population, which has learned lessons from the SARS epidemic in 2003.

China is already a highly tech-enabled society and was able to leverage this with contact tracing and social isolation policing. It also has a very established digitized/mobile economy that was more efficient at meeting the demand shocks (e.g food delivery, online education, fintech).

By being able to limit the virus/economic impact long enough until a vaccine arrives, Asian economies will be better positioned for a stronger rebound on the other side. It looks like China will emerge way ahead of the U.S. in growth, size and influence, signaling the moment of its transition into a leading global economic power.

Ultimately, the ecommerce and mobile segments of the world’s economies are getting a significant boost from the behavioral and structural changes taking place in rapid order.

EMQQ, the Emerging Markets and Ecommerce ETF is particularly well positioned: China is ~65% of EMQQ and China is in the best position to weather this crisis. Its substantial ecommerce sector is increasing in relative importance as a result of the outbreak.

Valuations seem quite reasonable after declines. Bearing in mind that Warren Buffet famously said “Be fearful when others are greedy and greedy when others are fearful” [1], then uncertainty and fear is at a historic high. 

Learn more about The Emerging Markets Internet and Ecommerce UCITS ETF (EMQQ)

When you trade ETFs your capital is at risk.  For professional investors only. The content of this document is the opinion of the author.

Date: 14th April 2020.

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