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.
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Date: 14th April 2020.