The government corporate intervention in China that has hammered internet stocks is driving investors to sectors still in Beijing’s good graces, such as high-tech manufacturing and renewable energy.
Shares of Chinese semiconductor companies, electric-vehicle manufacturers and solar-panel makers listed in mainland China climbed over the past month while shares of technology giants and companies that provide after-school tutoring suffered massive selloffs.
The Shanghai and Shenzhen stock markets haven’t been immune to the effects of Beijing’s regulatory clampdown on private-sector companies, but they have performed significantly better than Chinese stocks listed on exchanges in the U.S. and Hong Kong.
An MSCI index that tracks onshore China A-shares has fallen 3.2% since the start of July, compared with a 12% decline for the broader MSCI China index, heavily influenced by Tencent Holdings Ltd. , Alibaba Group Holding Ltd. , Meituan and other offshore-listed Internet-technology companies.
The outperformers over that period have been domestic Chinese indexes for new-energy stocks, semiconductor makers and electric-vehicle companies, up 4% to 18% since the beginning of July—adding to gains in recent months.