Though the relationship between the world’s top two economies, the United States and China, has remained rocky over the past several years, a planned virtual summit by the two nations by the end of this year might ease tensions to an extent. Therefore, we believe Chinese stocks NetEase, Inc. (NASDAQ:NTES) and Weibo Corporation (NASDAQ:WB) are well-positioned to soar in price in the coming months. Let’s discuss. A virtual summit by U.S. President Joe Biden and Chinese President Xi Jinping, which is expected to be held before the end of this year, could address issues at the heart of U.S.-China rivalry. Scott Kennedy of the Center for Strategic and International Studies believes that although this summit indicates only a “limited thaw” in the bilateral relationship, it could help stabilize U.S.-China competition and help avoid misunderstandings.
Chinese technology stocks surged in price last week, driven by the news of the planned virtual summit between the two nations and a sense of relief as U.S. policymakers averted a Congressional debt ceiling standoff to avoid a default. In addition, Mark Haefele, chief investment officer at UBS Global Wealth Management, said there could be investment opportunities on both sides, especially in the areas of capital markets, technology, cybersecurity, and climate change, even if there is a minimal material improvement in the relationship between the two countries. So this could be an opportune time for investors to bet on Chinese stocks.
We think Chinese stocks NetEase, Inc. (NTES) and Weibo Corporation (WB) could be good bets now because they are well-positioned to generate solid returns on a better U.S.-China relationship.