Don’t be fooled by the recent poor performance of Chinese tech stocks.
That’s the advice Jeremy Schwartz, WisdomTree’s director of research, has for investors thinking ahead.
“The long-term growth of the world economy is coming from China,” Schwartz told CNN’s Chief Business Correspondent Christine Romans on “Markets Now” on Wednesday.
Schwartz expects to see a lot of growth in China’s consumer tech sector in the next five to 10 years as the country pivots to a more consumer-focused economy.
China is pouring resources into its tech sector. The government wants 5G deployed on a large commercial scale by 2020, and China’s major carriers have all promised to meet that goal.
And now may be the best time to invest in companies like Tencent ( and )Alibaba (, whose stock price has been driven down by an escalating trade war that shows no sign of slowing down. )
On Wednesday, China announced plans to put tariffs of 25% on US products worth $16 billion, a day after the Trump administration shared its own list of roughly $16 billion worth of imports from China that will be hit with 25% tariffs.
Though Wall Street has responded mildly to the escalations, Schwartz noted that the trade war has probably dampened the market overall.
“If we got an actual deal, we could see a 10% move,” he said, adding “it’s always hard to see exactly what’s priced in.”
On the other hand, “if it goes really, really badly, you could see a 10% fall.”
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CNNMoney (New York) First published August 8, 2018: 2:33 PM ET