What happened
Chinese cutting-edge industrial technology stocks are rocking in Monday afternoon trading, with shares of CBAK Energy Technology (CBAT 3.96%), for example -- a maker of rechargeable batteries -- and EHang Holdings (EH 0.75%) -- a pioneer in futuristic flying cars -- rising 4.8% and 6%, respectively.
Hong Kong-based investment bank AMTD International (AMTD 1.14%), too, is having a good day, and rising 9.3% through 12:40 p.m. EST.
Image source: Getty Images.
So what
There doesn't appear to be any stock-specific news driving any of these three companies higher today -- at least nothing that's been made public. No press releases from the companies, nor upgrades or price target hikes from the analysts who cover them. Rather, today's surge in share price seems more "macro" in nature.
As Al-Jazeera reported over the weekend, China released data on its February exports on Sunday, which show the country's economy growing at a "record pace" and its "highest level in more than two decades," as the Chinese economy rebounds from its pandemic slump in 2020. "Exports surged 60.6 percent over a year earlier in the first two months of 2021," reports the news agency, and hitting $468.9 billion -- twice the growth pace that analysts had forecast. And Hellenic Shipping News reports this morning that the Chinese industrial sector is now operating at "full capacity," pulled higher by the country's booming "high-tech industry."
Now what
That sounds propitious for Chinese high-tech industrial companies such as CBAK and EHang -- and probably for the investment banks that are financing their rise -- as they race ahead to grab market share before other cutting-edge tech companies, located outside of China, rebound from their own countries' recoveries. Capitalizing on this advantage, China Economy Premier Li Keqiang promised Friday that the government would accelerate technology developments within the country, implying further government subsidization of Chinese industry, aiming to grow the Chinese economy "over 6%" this year.
That would be on top of the $1.3 trillion that China allocated in subsidies to its local governments in 2020.
That being said, Al-Jazeera notes that analysts are predicting a deceleration in exports going forward, as those other countries do begin their own recoveries. Other reports show that tax revenues are down sharply in China, which could constrict the government's ability to continue funding its companies' expansions in the face of rising government deficits.
The same government support that fueled this year's rebound, it seems, could be planting the seeds for a coming slowdown later in the year.
