People play computer games at an internet cafe in Fuyang, China’s Anhui province.
Lu Qijian | Visual China Group | Getty Images
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SINGAPORE — Chinese internet stocks made “remarkable” gains in 2020 as the Covid-19 pandemic pushed more commercial activities online — but this year also marked the end of China’s easy regulatory environment for tech companies, according to J.P. Morgan.
Chinese regulators, like their peers in the U.S. and European Union, are figuring out new rules to rein in monopolistic behavior in the tech industry.
That “will likely keep the investors on the sidelines until there is further clarity on anti-trust rules, including detailed guidance and, more importantly, the law enforcement,” J.P. Morgan analysts wrote in a Tuesday report.
For investors still interested in buying Chinese tech stocks, the analysts shared one way to get around risks brought on by the tightening rules on the sector.