As a result of repression, many investors cease to invest in Chinese IT companies switch attention to sectors that are less susceptible to government control and data verification. Reports about it Reuters.
Investors decided to invest in the production of semiconductors, renewable energy sources, health care and other Internet, industry to avoid pressure from the state. They also aimed at technological companies that are present only in the Chinese market to avoid potential risks when carrying out foreign operations.
Unexpected repression narrow investment opportunities, while many investors have capital billions of dollars. The main investment director and managing partner of the All-Stars Investment Richard Ji believes that investors have created the most severe regulatory conditions for more than a decade: market competition is more severe, and capital is the most abundant. In general, the future profitability for venture and private investors can significantly decrease.
Repressive measures prompted investors to conduct additional political analysis when evaluating potential investments. Some began to read a multi-volume collection of performances by Jinping “China Management” and carefully follow the state media in order to understand the political vector. Earlier, repression was touched by the largest Chinese company for the production of video games Tencent. The state of the company’s head decreased by $ 14 billion after his games were compared with opium. Alibaba was also fined almost three billion dollars for violation of antimonopoly legislation.