Trade tensions threaten rise of China’s stock champions
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China's most-promising industries, including electric vehicles, wind and solar projects, medical devices, and chips, are facing growing trade restrictions from Western governments. These sectors are of strategic importance to President Xi Jinping's bid for leadership in the global race toward green transition and high-tech development. The rising tensions come at a time when stocks were starting to emerge from a multi-year slump as investors bought into China's efforts to build new growth engines and achieve self-sufficiency along key supply chains. The materialization of these threats can hinder China's global expansion and may lead to a full-blown trade war. The biggest Chinese firms that get at least a fifth of their revenue from exports command more than a 14% weight in the CSI 300. Recent months have seen tensions worsen, with the European Union joining US-styled protectionist moves. The focus is now on which sector will be targeted next, with electric vehicles being a key target so far. The unpredictable nature of geopolitical tensions increases the risk of investing in Chinese stocks, which many were already avoiding due to regulatory uncertainties and a slowing economy.

#China #TradeTensions #StockMarket #StrategicIndustries #ElectricVehicles #GreenTransition #HightechDevelopment

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