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Chinese regulator approves fund focusing on Korean chipmakers

Written by Fri 14 Oct 2022


China’s securities regulator has approved the first Chinese mutual fund that will target major Chinese and South Korean chipmakers. The China Securities Regulatory Commission approved Huatai-request PineBridge’s for regulatory approval on August 9, according to a representative of the Huatai-PineBridge Fund Management Co.

This announcement comes soon after the Biden administration launched a wide-ranging set of export controls, with the goal of hampering China’s chip sector. A key goal for the exchange-traded fund (ETF) will be to invest in both Korean and Chinese semi-conductor companies, including Samsung, Semi-conductor Manufacturing International Corp and Montage Technology Co.

“The Chinese and Korean semi-conductor industries are expected to be closely integrated,” said Huatai-PineBridge in marketing material for the ETF, reports Reuters. The formation of the mutual fund marks a new turning point in the escalating technology conflict between China and the US. Both governments have launched initiatives to boost domestic technical innovation and make it more challenging for foreign chips to be purchased.

The fund’s promotional materials express the optimism that it will profit from China’s push for technological independence in response to the United States of America’s escalating sanctions. The US recently blacklisted China-based Huawei Technologies Co. and passed the CHIPS and Science Act to promote funding for domestic research and manufacturing of semi-conductors.

The new EFT will monitor the CSI KRX China-Korea Semi-conductor Index, which was created jointly by China Securities Index Co. (CSI) and the Korea Exchange (KRX). The index, which was introduced last year, is only one of the several initiatives developed as part of a collaboration agreement between the Shanghai Stock Exchange and the Korean Exchange to boost international investment.

Written by Fri 14 Oct 2022


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