Capture Xi’s Emphasis on High-Tech Industries with Highly Relevant GX China Theme ETFs - Global X ETFs Hong Kong

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  • The Fund’s synthetic replication strategy will involve investing up to 50% of its net asset value in financial derivative instruments (“FDIs”), mainly funded total return swap transaction(s) through one or more counterparty(ies). Risks associated with FDIs include counterparty/credit risk, liquidity risk, valuation risk, volatility risk and over-the-counter transaction risk. FDIs are susceptible to price fluctuations and higher volatility, and may have large bid and offer spreads and no active secondary markets. The leverage element/component of an FDI can result in a loss significantly greater than the amount invested in the FDI by the Sub-Fund.
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  • China is an emerging market. The Fund invests in Chinese companies which may involve increased risks and special considerations not typically associated with investments in more developed markets, such as liquidity risk, currency risks, political risk, legal and taxation risks, and the likelihood of a high degree of volatility.
  • The trading price of the Fund’s unit (the “Unit”) on the Stock Exchange of Hong Kong is driven by market factors such as demand and supply of the Unit. Therefore, the Units may trade at a substantial premium or discount to the Fund’s net asset value.
  • The Fund’s synthetic replication strategy will involve investing up to 50% of its net asset value in financial derivative instruments (“FDIs”), mainly funded total return swap transaction(s) through one or more counterparty(ies). Risks associated with FDIs include counterparty/credit risk, liquidity risk, valuation risk, volatility risk and over-the-counter transaction risk. FDIs are susceptible to price fluctuations and higher volatility, and may have large bid and offer spreads and no active secondary markets. The leverage element/component of an FDI can result in a loss significantly greater than the amount invested in the FDI by the Sub-Fund.
  • As part of the securities lending transactions, there is a risk of shortfall of collateral value due to inaccurate pricing of the securities lent or change of value of securities lent. This may cause significant losses to the Fund. The borrower may fail to return the securities in a timely manner or at all. The Fund may suffer from a loss or delay when recovering the securities lent out. This may restrict the Fund’s ability in meeting delivery or payment obligations from realisation requests.
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Capture Xi’s Emphasis on High-Tech Industries with Highly Relevant GX China Theme ETFs

By: Lizzy Liu

On 17 Feb 2025, President Xi convened an unusual meeting with leading entrepreneurs mainly from major tech and advanced manufacturing companies.

Several Global X China theme ETFs – China EV & Battery ETF (2845), China Global Leaders (3050), G2 Tech (3402) and China Cloud Computing (2826) – have significant exposure to companies attended the symposiums.

Frontier Tech & Advanced Manufacturing in Focus During Xi’s Symposium

  • Who attended the meeting?
    Companies attended are leaders from Internet, AI, Advanced Manufacturing (e.g. EV, batteries, electronics), Consumer and Agriculture, with notable participants including:

1) Tech & AI: Tencent, Alibaba, Meituan and DeepSeek;

2) Advanced Manufacturing: Huawei, BYD, CATL, Xiaomi, Will Semi and Unitree;

3) Consumer & Agriculture: Feihe, Muyuan and New Hope.

Among the 30+ private companies, representatives from 6 companies delivered speeches: Huawei, BYD, Xiaomi, Will Semi, New Hope and Unitree.

  • Key message delivered during the meeting:
    Xi urged private sector leaders to maintain their competitive spirit and confidence in China’s future. He committed to eliminating unreasonable fees and fines imposed on private firms and emphasized the need to create a fair competitive landscape.

 Global X China Theme ETFs Positioned for the Push of China High-Tech Industries

As China’s private sector is expected to experience a resurgence, particularly in frontier technology and advanced manufacturing, Global X ETFs are strategically poised to capitalize on this revitalization. We believe China Electric Vehicle and Battery ETF (2845), China Global Leaders (3050), G2 Tech (3402) and China Cloud Computing (2826) are well positioned to benefit from this trend, offering significant exposure to companies that attended in the symposiums.

China Electric Vehicle and Battery ETF (2845) offers significant exposure to industry leaders such as BYD (23%) and CATL (19%), positioning it well within the rapidly expanding EV market. China Global Leaders ETF (3050) encompasses c.30 leading Chinese brands across critical sectors such as technology and advanced manufacturing. These companies have not only survived intense domestic competition but have also evolved into global frontrunners, reflecting their resilience and innovation. G2 Tech (3402) captures the growth and innovation of leading tech companies from both US and China. China Cloud Computing ETF (2826) focus on China tech and software companies that are direct beneficiaries of the release of DeepSeek and is expected to see substantial growth as the demand for cloud solutions and AI-driven applications escalates.

Implications of the Meeting and Outlook: Shifting to Supportive Stance

The meeting marks a crucial turning point in the central government’s approach to the private sector, signifying a transition from a restrictive to a supportive stance. Following the crackdown in 2021, such as ANT, Didi, and various sectors including education and real estate, the government is now officially pivoting to encourage a vibrant and high-quality private sector. This shift indicates the introduction of measured policy support and the establishment of a more predictable regulatory environment over the next few years.

With a clearer framework in place, private sector leaders are likely to regain confidence, which is essential for fostering investment. As these leaders begin to invest again, the ripple effects on the broader economy in terms of employment and consumption could be substantial as private sectors account 80% of China employment. A revitalized private sector is not just a critical driver for economic recovery; it is also vital for sustaining long-term growth.

Looking ahead, we expect recent tech rally can extend to other industries in China if we see more supportive numbers and policies from upcoming NPC meeting and Two sessions. In this dynamic landscape, Global X ETFs are uniquely positioned to capture the growth opportunities stemming from the revival of China’s private sector.

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