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Chinese internet stocks soar as phony tech war fades

Inaction against China’s largest internet companies with a combined market value of $1.3 trillion follows a recurring pattern in Washington’s phony war against China. The US announces what appears to be draconian sanctions, but allows business as usual (or close to usual) by order of anonymous mid-level bureaucrats.

So it was at the weekend. A US exchange-traded fund for Chinese internet stocks jumped by more than 5% Friday after Washington declined to ban Americans from owning them.

Rumors of a Treasury Department ban on American ownership of Chinese tech giants Alibaba and Tencent, reported in a leak to the Wall Street Journal from nameless officials, produced an air pocket for Chinese tech stocks earlier in the week. After the rumors turned out to be wrong, Tencent finished the week with a 7% gain.

KWEB, a popular China internet ETF, closed Friday at 82.60 with a 5.2% daily gain, and more than double its March 2020 low price. KWEB returned 56.24% over the past year vs 16.8% for the S&P 500 and 43.45% for the NASDAQ.