- The CEO of Ark Invest said “disruptive innovation platforms” in China were now competing with those in the US.
- Speaking at a webinar, she said she was impressed by China’s commitment to driving innovation.
- Chinese tech stocks are down, having been sold off heavily this month in volatile trade.
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Cathie Wood, the CEO of Ark Invest, said she sees growth potential in “disruptive innovation platforms” in China and that they are competing with similar ventures in the US now. Chinese tech stocks have been trending downwards recently as they face legal and regulatory pressure.
Speaking at a webinar in collaboration with Li Yimei, chief executive of China Asset Management this month, she discussed China’s commitment to innovation and said the country’s platforms have made huge progress in area such as DNA sequencing, energy storage, artificial intelligence, blockchain and robotics, especially relating to productivity, “which is good for the entire economy,” IgnitesAsia quoted Wood as saying.
Wood, through her ARK Invest exchange-traded fund, was one of the top performing asset managers of 2020, thanks in large part to her bets on disruptive technology.
She said many Chinese platforms are now close competitors to those in the US, after having caught up in recent years. “Competition in technology is a really good thing, in terms of moving the technology forward faster than otherwise would have been the case,” she said.
She said she was impressed with the government’s collaboration with the private sector, as she believes this will further the development of microchips and artificial intelligence.
Wood also said it reflected the government’s commitment to electric vehicles “I’m very impressed that China allows Tesla into the country without a local manufacturer. It is so determined to have electric vehicles proliferate throughout China,” she said.
Chinese tech shares have tumbled recently. The Hang Seng Tech index, which contains a number of big Chinese tech names such as Alibaba, Tencent, and FoxConn, is one of the worst performers from among the major indices this year, with a loss of almost 3%, versus a 1.5% gain in the tech-heavy Nasdaq 100.
Performance has been highly volatile for months, as tech stocks are impacted by legal and regulatory changes. Recently, the sector fell after news of a potential government-backed company designed to oversee tech data. Tensions between the US and China and a “Cold Tech War” were also major risk factors, Wedbush analyst Dan Ives said on Monday.
Wood’s Ark Invest published a note this week saying “Chinese technology companies are caught in political crosscurrents”, referring to the developments that have been causing stocks to crash. Ark Invest believes they will only cause “short term turmoil” and said “policies might accelerate or hinder the pace of innovation for a time, but we believe self-preservation probably will bring policymakers back to both tables.”