But which funds could have strong long-term growth potential?

Three that could deliver on this are named below. Here's what they offer investors:

Betashares Global Cybersecurity ETF (ASX: HACK)

The Betashares Global Cybersecurity ETF could be a strong option for investors looking beyond traditional technology exposure.

Cybersecurity is no longer just an afterthought for businesses. It has become a boardroom, customer trust, regulatory, and business continuity issue.

Companies now rely on cloud platforms, remote workers, digital payments, online customer data, artificial intelligence tools, and connected devices. Each of these creates more points that need protecting.

This popular ASX ETF gives investors exposure to companies involved in areas such as identity security, endpoint protection, network defence, cloud security, and threat detection.

The growth case is straightforward. As more value moves online, more money is likely to be spent keeping it safe. This could bode well for holdings such as Palo Alto Networks (NASDAQ: PANW) and Fortinet (NASDAQ: FTNT).

Betashares Asia Technology Tigers ETF (ASX: ASIA)

The Betashares Asia Technology Tigers ETF offers a different type of technology exposure.

Many investors think of technology through a US lens, but Asia plays a huge role in the global digital economy.

The region is home to major companies involved in semiconductors, hardware, ecommerce, gaming, cloud services, digital platforms, and consumer technology. This includes WeChat owner Tencent Holdings and search and robotaxi giant Baidu (NASDAQ: BIDU).

That gives this ASX ETF exposure to both sides of the technology story. Asia helps build many of the components that power the digital world, while also serving enormous consumer markets that continue to adopt new online services.

It is worth noting that the fund is more concentrated than a broad global ETF, so investors should expect ups and downs. But given its strong long-term growth potential, the rewards could comfortably outweigh the risks.

Betashares S&P/ASX Australian Technology ETF (ASX: ATEC)

Finally, the Betashares S&P/ASX Australian Technology ETF brings the growth story closer to home.

This ASX ETF invests in Australian technology companies, giving investors exposure to a part of the local market that looks very different from banks and miners.

Its holdings can include businesses involved in software, digital marketplaces, payments, online services, and technology-enabled platforms. This includes Xero Ltd (ASX: XRO) and WiseTech Global Ltd (ASX: WTC).

This means that the fund gives investors a way to back local innovation without relying on one company to deliver.

It may not be as diversified as a broad market fund, and smaller technology shares can be sensitive to interest rates and investor sentiment. But if Australia continues producing globally competitive digital businesses, this fund could have plenty of long-term growth potential.

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One of the simplest ways to build lasting wealth is by investing in exchange-traded funds (ETFs).

But which ASX ETFs could be good picks for investors that are looking to grow their portfolio steadily over the next five years and beyond?

Let's look at five top ASX ETFs to consider buying and holding for the long term.

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The BetaShares Asia Technology Tigers ETF gives investors access to Asia's most dynamic technology giants. This includes Tencent Holdings (SEHK: 700), Alibaba Group (NYSE: BABA), and Baidu (NASDAQ: BIDU).

These companies dominate digital life across Asia, from e-commerce to cloud computing and artificial intelligence. And with the region's middle class expanding rapidly, the BetaShares Asia Technology Tigers ETF provides exposure to one of the fastest-growing tech ecosystems in the world.

BetaShares Nasdaq 100 ETF (ASX: NDQ)

For exposure to the innovation capital of the world, the BetaShares Nasdaq 100 ETF is hard to beat.

This ASX ETF tracks the Nasdaq 100 Index, which features industry leaders like Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), Nvidia (NASDAQ: NVDA), and Tesla (NASDAQ: TSLA).

These companies have transformed global industries and continue to drive technological progress.

BetaShares Australian Quality ETF (ASX: AQLT)

Closer to home, the BetaShares Australian Quality ETF focuses on high-performing local shares with strong balance sheets and consistent earnings growth. Current holdings include CSL Ltd (ASX: CSL), Wesfarmers Ltd (ASX: WES), Macquarie Group Ltd (ASX: MQG), ResMed Inc (ASX: RMD), and Pro Medicus Ltd (ASX: PME).

This could make this ASX ETF a great choice for investors who want reliable exposure to quality Australian businesses that can compound steadily through good times and bad.

BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC)

Australia's technology sector might be smaller than the US, but it is packed with potential. The BetaShares Australian Technology ETF includes some of the nation's most innovative names. This includes WiseTech Global Ltd (ASX: WTC), Xero Ltd (ASX: XRO), TechnologyOne Ltd (ASX: TNE), and NextDC Ltd (ASX: NXT).

As Australian tech companies expand globally, this fund offers a way to tap into that growth without having to pick individual winners.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

Finally, for broad international diversification, the Vanguard MSCI Index International Shares ETF could be an excellent option. It invests in more than 1,200 global stocks, including Nestle (SWX: NESN), Toyota (TYO: 7203), Microsoft, and Unilever (LSE: ULVR).

This ASX ETF is designed to deliver steady, long-term growth through wide exposure across sectors and regions, which could make it a perfect complement to the other ETFs in this list.

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That's because they provide investors with access to many of the best stocks in the world with a single click of the button.

Let's see what these ASX ETFs offer and why they could be among the best to buy this week:

Betashares Nasdaq 100 ETF (ASX: NDQ)

The first option for investors to consider is the Betashares Nasdaq 100 ETF.

This popular fund tracks the 100 largest non-financial stocks that are listed on the famous Nasdaq exchange, giving investors access to innovation leaders such as Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), Nvidia (NASDAQ: NVDA), Tesla (NASDAQ: TSLA), and Amazon (NASDAQ: AMZN).

These are the businesses driving the world's digital economy. They are powering advances in artificial intelligence, cloud computing, electric vehicles, and automation. While the tech sector can be volatile in the short term (just look at Friday night on Wall Street), its long-term earnings growth potential remains hard to beat.

In light of this and its likely pullback this morning, now could be a good time to snap up this ASX ETF for the long term.

Vanguard Australian Shares ETF (ASX: VAS)

If you are interested in local exposure, then this could be achieved with the Vanguard Australian Shares ETF.

This ASX ETF tracks the ASX 300 index, covering Australia's largest and most established companies, including BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), and Coles Group Ltd (ASX: COL).

The Vanguard Australian Shares ETF offers broad diversification across the Australian market and pays regular, franked dividends. This could make it a great core holding for income and long-term stability. It also provides a strong domestic base to balance out higher-growth international ETFs.

Betashares Asia Technology Tigers ETF (ASX: ASIA)

Finally, if you want some exposure to Asia's fast-growing technology sector for your $5,000 then the Betashares Asia Technology Tigers ETF could be worth a look.

This ASX ETF holds some of the region's biggest tech names, including Tencent Holdings (SEHK: 700), Alibaba Group (NYSE: BABA), PDD Holdings (NASDAQ: PDD), and Baidu Inc (NASDAQ: BIDU).

Asia's tech sector continues to expand rapidly, driven by digital adoption, artificial intelligence, and ecommerce. While short-term performance can fluctuate, the long-term potential of this region's technology leaders remains enormous. Especially given its growing middle class.

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From semiconductors and data centres to software and autonomous vehicles, billions are being invested into AI development. For everyday investors, exchange traded funds (ETFs) listed on the ASX provide a simple way to gain exposure to this megatrend without having to pick individual winners.

Here are three ASX ETFs that could be worth considering for those wanting to ride the AI wave.

Betashares Nasdaq 100 ETF (ASX: NDQ)

The Betashares Nasdaq 100 ETF offers exposure to the 100 largest non-financial stocks on the Nasdaq exchange. This includes some of the biggest names driving AI adoption, such as Microsoft (NASDAQ: MSFT), Alphabet (NASDAQ: GOOGL), Amazon (NASDAQ: AMZN), and Nvidia (NASDAQ: NVDA).

These stocks are not only using AI to improve their businesses but are also selling the infrastructure and tools powering AI growth. For investors, the Betashares Nasdaq 100 ETF provides diversified exposure to the global tech giants at the centre of this megatrend.

Betashares Asia Technology Tigers ETF (ASX: ASIA)

The Betashares Asia Technology Tigers ETF gives investors access to the leading technology names across Asia. Its portfolio includes Tencent (SEHK: 700), Alibaba (NYSE: BABA), Taiwan Semiconductor Manufacturing Company (NYSE: TSM), and Baidu (NASDAQ: BIDU).

In respect to the latter, Baidu has been investing heavily in AI, particularly in autonomous driving through its Apollo Go robotaxi service, which has already begun commercial operations in multiple Chinese cities. Alongside Tencent's AI-driven gaming and cloud platforms, Alibaba's cloud and commerce infrastructure, and TSM's leadership in chip manufacturing, the Betashares Asia Technology Tigers ETF has exposure to some of the most advanced and commercially active AI projects outside the United States.

Betashares Global Robotics and Artificial Intelligence ETF (ASX: RBTZ)

Finally, the Betashares Global Robotics and Artificial Intelligence ETF is arguably the most direct way to invest in AI on the ASX. The fund holds a portfolio of stocks at the cutting edge of robotics, automation, and AI software. This includes Nvidia, Intuitive Surgical (NASDAQ: ISRG), and ABB (SWX: ABBN).

AI is set to reshape industries ranging from manufacturing and logistics to healthcare and finance. By combining exposure to robotics hardware and AI software, the Betashares Global Robotics and Artificial Intelligence ETF provides a diversified play on two of the most exciting and disruptive technologies of the next decade. This fund was recently recommended by the team at Betashares.

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Shares of Chinese consumer tech-oriented names Tencent Holdings (OTC: TCEHY), Baidu (NASDAQ: BIDU), and Futu Holdings (NASDAQ: FUTU) rocketed higher on Monday, up 5.5%, 10.1%, and 21.9% as of noon ET.

There was an across-the-board rally in Chinese stocks today, with the smaller, more economically sensitive stocks in the country rallying the most. This came after the country's Politburo met and made a dovish statement for more forceful and imminent stimulus.

China is getting increasingly serious about stimulus

On Monday, China's 24-member Politburo released a statement, declaring the government will have a more forceful fiscal response to the country's economic woes, and that the central bank will use a "moderately loose" monetary policy into next year.

While that couched language might not scream "huge stimulus money," China's Politburo hasn't used that official language since 2008, during the Great Financial Crisis. Not only that, but the statement also came with other language vowing to be more "active" in responding to economic downturns and boosting consumer demand while stabilizing the housing market.

China's downturn has been the result of the long "zero-COVID" lockdowns, the clampdown on the country's biggest tech companies, difficulties with foreign capital to get money in and out of the country, and perhaps most importantly, a big housing downturn that has decimated consumer confidence. Chinese consumers have a lot of their wealth tied up in their homes, so this has been a huge headwind to consumer demand.

While Beijing had responded to the downturn somewhat this summer, most measures to date had been in the form of interest rate cuts and indirect actions, which might not have a big effect if consumers aren't willing to borrow. Some critics have decried a lack of more forceful direct fiscal responses and getting cash into the hands of consumers, while giving them the confidence to restart spending. This has been due to the government's unwillingness to take on larger deficits.

However, the language in today's statement seems to suggest Beijing is now open to taking on those larger deficits to jolt the economy out of its slumber.

How these stocks would benefit

Better consumer spending and household wealth would benefit all three of these stocks.

Tencent has a portfolio of products that span both consumer and enterprise customers, but its biggest segments are still consumer-oriented in free-to-play video games, the giant social media platform WeChat, and its digital financial payments platform Tenpay. Baidu, meanwhile, is the largest search platform in China, and is therefore dependent on the economically sensitive advertising market, while the company is also advancing AI and self-driving car technology. And Futu is an online financial brokerage that facilitates trading for stocks, derivatives, and other assets. A healthier Chinese consumer would theoretically invest and trade more.

China stocks all clear? Not so fast

While today's news was certainly encouraging, investors should still take care to be cautious of Chinese stocks. While all three stocks are still well below their 2021 highs, they have all had quite a run this year, as these names surged a huge amount following this summer's initial statements promising more aggressive stimulus. However, after the summer's surge, some investors had been disappointed in the actual follow-through since then, and there's still uncertainty as to how the government will follow through on today's statements.

While today's announcements do indicate an incremental promise for a more forceful government response, China's lagging property sector, aging population, and likely higher tariffs on goods destined for the U.S. under the incoming Trump administration will be difficult to tackle all at once.

However, for those willing to take on the significant geopolitical and policy risks, China's big tech and consumer companies still remain cheaper than their U.S. counterparts -- though that gap has narrowed quite a bit over the past few months.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The explosive Chinese stock rally over the last month finally lost steam today after a press conference by Chinese officials failed to sustain investor exuberance over previously announced stimulus measures.

Shares of the electric carmaker Li Auto traded nearly 7.5% lower as of midday, while shares of the search giant and artificial intelligence company Baidu fell 6.3%. Shares of the fast-food company Yum China Holdings were down 5.6%.

Will Chinese officials make good on their promise?

The Hang Seng Index, which tracks large stocks in Hong Kong and mainland China, fell 9.4% today after China's National Development and Reform Commission (NDRC) held a press conference that provided minimal details on future stimulus.

NDRC Chair Zheng Shanjie told the press that officials are "fully confident" in the ability to achieve the Chinese government's 2024 economic agenda, including 5% growth in gross domestic product. He also said the NDRC would allocate 200 billion yuan from the 2025 budget to invest in local projects. But that fell short of investor expectations and investors faded from the sector following the press conference.

What I've found interesting in recent weeks is that the rally appears to have been more dependent on sentiment from the government and China's central bank than on the actual stimulus measures announced thus far. The first spark of the rally came after China's central bank announced it would lower select interest rates, drop bank reserve requirements, lower down payments and rates on mortgages, and inject capital into financial companies and banks in the country that could be used to repurchase stock and buy other stocks.

Chinese stocks rose, but many investors doubted the measures would be enough to lift an economy that has been crushed by deflationary pressures, a housing downturn, and high unemployment. What really ignited the rally was a surprise Politburo meeting convened by the country's top officials and led by Chinese President Xi Jinping that concluded with a statement from the committee that said, "We should increase the intensity of countercyclical adjustment of fiscal and monetary policies."

In company-specific news, Baidu announced a shuffle of its C-suite. The company said CFO Rong Luo would leave the role to lead the company's mobile unit, which includes the Baidu app, the video platform Haokan, and the social media platform Baidu Post. Meanwhile, Junjie He, the head of the mobile unit, will become interim CFO.

Volatility is part of investing in Chinese stocks

Volatility is part of investing in Chinese stocks. The group often doesn't trade on fundamentals and can be heavily influenced by sentiment from the Chinese government as well as its actions.

Also, given that the Hang Seng Index had risen 34% over the last month before today, I think we were probably in a situation where the margin for error was pretty slim. The Chinese economy has not fared well, and economists have warned that a lot has to be done to awaken consumer demand.

I still think you can invest in Chinese stocks as a long-term investor. A lot of these companies have built strong products and services using cutting-edge technology. The opportunity in the world's second-largest economy remains massive. However, investors need to be ready for volatility and understand the role that government and regulation play in the market. I maintain the view that the most appropriate way for retail investors to gain exposure to the sector is through an exchange-traded fund.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Another day and more news about Chinese stocks. The group ripped higher after Chinese leaders pledged further support for the Chinese economy following an unexpected meeting Thursday.

Shares of the fast food company Yum China (NYSE: YUMC) surged as much as 20% this morning before giving away some of those gains. Meanwhile, shares of the e-commerce company PDD Holdings (NASDAQ: PDD) and the search engine and artificial intelligence company Baidu (NASDAQ: BIDU) rose as much as roughly 15% and 12%, respectively, this morning before giving back some of the gains.

Backing up the support

Starting on Tuesday, China's central bank rolled out a slew of stimulus measures and interest rate cuts to try to lift China's struggling economy and hopefully revive the government's 5% gross domestic product target growth rate this year, which analysts are now concerned about. Those measures include lowering reserve requirements at banks, so they have more capacity to lend, dropping interest rates and down payment requirements on mortgages, and injecting capital into financial companies in China so they could do more investing whether in stocks or even repurchasing their own stock.

While the measures certainly sparked optimism, the rally stalled yesterday on concerns that interest rate cuts and stimulus may not be enough to get China out of its slump. The economy is dealing with a housing crisis, deflationary concerns, high unemployment, and weak consumer demand.

In an unexpected Politburo meeting today, the committee, which is led by President Xi Jinping, reportedly said, "We should increase the intensity of countercyclical adjustment of fiscal and monetary policies." The Politburo also reportedly said it is planning to issue government bonds to support "the driving role of government investment."

The Politburo is considered the principal policymaking committee composed of high-ranking officials and charged with driving the country's political, economic, and social priorities. What made this specific meeting interesting, according to analysts at Morgan Stanley, is that the Politburo typically does not meet in September, suggesting "an increased sense of urgency."

Investors seem to be coming around on China after a tough year so far for the group. According to Goldman Sachs, Chinese stocks on Tuesday saw the most daily net inflows in roughly 3.5 years and the second most over the past decade.

The group got another shot of confidence this morning from one of the world's best investors. Billionaire investor David Tepper told CNBC that he would recommend buying "everything" in China, from exchange-traded funds (ETFs) to futures. He said he's been growing more bullish from when the Federal Reserve cut interest rates last week to China's first stimulus announcement and rate cut to this most recent news about the Politburo.

Understanding the landscape

As I've said over the last few days, Chinese stocks operate in a much different landscape than U.S. stocks. The government has more influence and the economy doesn't always move in the same direction as other global economies. As you can see today, the sector is almost benefiting more from pledged support from China's government than the actual stimulus measures announced earlier this week.

Stocks like Yum, PDD, and Baidu should see a nice lift if China can get the economy going, as consumers will have more money to spend eating out, benefitting companies like Yum, and more money to buy consumer products, benefitting companies like PDD. It's also worth noting that all three of these companies trade at much more reasonable multiples than similar companies in the U.S. generating similar levels of growth.

But if you don't have time to conduct significant due diligence on each of these companies and how China's economic pressure and regulatory landscape might impact them, and still want some exposure to China, I would recommend investing in an ETF holding a basket of Chinese stocks.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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U.S. stocks showed signs of a potential bounce on Tuesday morning, albeit a modest one. Stock index futures were up as much as a third of a percent shortly before the regular trading session began on Wall Street.

One factor that has weighed on investor sentiment recently has been the ongoing battle that the Chinese government has waged against the COVID-19 pandemic. China has been a lot more stringent with its lockdown measures to stem the potential spread of the disease, and that has raised concerns about how much downward pressure the government's actions could have on economic activity. With Chinese citizens now starting to protest lockdowns and other restrictions, the prospects for eliminating the zero-COVID policy in favor of a more lenient alternative are giving many well-known stocks in China a boost on Tuesday morning.

What China could do

Investors in Chinese companies got more comfortable after hearing comments from China's National Health Commission (NHC). The governmental body said that it would make a greater effort to provide COVID-19 vaccinations for its elderly population, aiming to protect those over 80 and making booster shots available sooner after primary vaccinations. The NHC is also looking to launch a campaign to convince those who are reluctant to get vaccinated that the benefits of COVID-19 vaccines outweigh any perceived downsides.

Interestingly, the reaction to recent protests in China has been mixed. At first, investors feared that the Chinese government would crack down on protestors with COVID-19-related measures that could be stricter than current guidelines. However, more market participants seem to view the protests as potentially having a positive influence in persuading government officials to loosen their zero-COVID policy.

That's a big part of why some major Chinese stocks moved higher in premarket trading Tuesday morning. Alibaba Group Holding rose 5%, matching gains from electric vehicle companies Li Auto and XPeng. Baidu climbed 6%, while JD.com moved 7% higher.

Solid earnings from Bilibili

Also boosting sentiment on Chinese stocks, Bilibili (NASDAQ: BILI) released its latest quarterly results on Tuesday, and the stock climbed 10% in response. The online gaming and digital media company reported solid gains in the third quarter, including an 11% rise in revenue year over year to $814.5 million. Net losses narrowed by 36% from year-ago levels to $241 million as Bilibili reported a 25% rise in daily active users to 90.3 million. Almost 333 million people now use the service on a monthly basis, and while less than 10% of those users actually pay for a premium subscription, Bilibili reported high levels of engagement.

Shareholders were pleased to see Bilibili responding proactively to macroeconomic threats. Already, Bilibili's numbers are reflecting more efficient operations, as gross margin improved and expenses for sales and marketing fell as a percentage of total revenue. The company anticipates continuing to control its costs strictly, with an eye toward unlocking even more savings as it aims to become consistently profitable as soon as it can.

More hurdles ahead

COVID-19 is only one of the factors that have weighed on Chinese stocks in recent years. Turbulent foreign relations between China and the U.S. have led to volatility, while structural aspects of the Chinese economy have introduced systemic risks for investors to consider. Talk of potentially delisting Chinese stocks has quieted in Washington, but it could come back in 2023 and beyond.

Nevertheless, progress toward moving beyond the zero-COVID policy seems to be giving investors more comfort in investing in Chinese stocks. Those who are comfortable with the risks could find interesting opportunities in China. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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China's all-powerful Communist Party government has spent 2021 cracking down on several industries that it feels threaten the long-term welfare of the country. Just last month, we saw billions wiped from the valuations of several Chinese companies operating in the education space.

As we reported at the time, this was due to regulatory changes that are forcing these companies to reorganise as not-for-profit entities.

China shares face government crackdowns

We also saw a recent crackdown on the Chinese ride-sharing company DiDi Global Inc (NYSE: DIDI). This may have been the primary catalyst behind the company losing around 42% of its value since its June IPO.

This follows the clamps being put on one of China's largest companies – Alibaba Group Holding Ltd (NYSE: BABA) – last year. Alibaba was planning on spinning off its Ant Financial division at the time. But it was forced to pull the plug at the last minute after intervention from Chinese authorities.

All of these heavy-handed moves by the Chinese Communist Party have seen a plethora of investors lose faith in China shares. Not just the ones directly affected by the actions of the Chinese government either.

The BetaShares Asian Technology Tigers ETF (ASX: ASIA) is an exchange-traded fund (ETF) that holds a basket of mostly Chinese tech shares. These not only include Alibaba and DiDi. It also includes other famous China shares like Tencent Holdings Ltd (HKG: 0700), Baidu Inc (NASDAQ: BIDU) and JD.com Inc (NASDAQ: JD).

The ASIA ETF was one of the best performing ASX ETFs of 2020. But, in 2021 so far, it's down a nasty 12.8%. It's also down close to 30% from its February all-time high.

Future Fund pulls the plug on China

Well, now we have some confirmation that it's not just retail investors with paper hands. According to a report in the Australian Financial Review (AFR) last week, a larger investor has taken note.

That investor is none other than Australia's sovereign wealth fund – the Future Fund. The result? The Future Fund is bailing out of China shares.

Future Fund chair Peter Costello told the AFR that the Future Fund needs to be careful with "sovereign money" in light of "recent circumstances" with China. Here's some of what the former Treasurer said:

China is a big part of the emerging world and ordinarily we would be taking a big position in relation to that… But given the difficulty in the relationship between Australia and China we have pulled back on allocation in China… We think it's wise to be cautious as Australia's sovereign [fund], when we're making the allocations in this difficult political climate.

The AFR reports that the Future Fund had China shares Alibaba and Tencent as its sixth and seventh largest positions as of 30 June. Both positions were reportedly worth more than $1 billion together. But in light of Mr Costello's comments, we can probably assume these positions have been at least pruned.

Mr Costello's comments seem to put the blame for this shift in preference for China shares to the recent well-publicised diplomatic spats between Australia and China. Even so, it's possible that the recent tectonic shifts in China's regulatory environment may have helped to grease the wheels.

Whatever the reason, Australia's sovereign wealth fund is a lot less invested in China shares than it was just a few months ago. Food for thought!

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Now, most China shares are not listed on the ASX, instead finding homes on the US, Hong Kong or Shanghai stock exchanges.

But let's take an ASX China barometer in the BetaShares Asia Technology Tigers ETF (ASX: ASIA). This exchange-traded fund (ETF) is one of the top ETFs on the ASX. It holds within it most of the famous Chinese e-commerce companies in Tencent Holdings Ltd (HKG: 0700) and Alibaba Group Holdings Ltd (NYSE: BABA). As well as JD.com Inc (NASDAQ: JD) and Baidu Inc (NASDAQ: BIDU).

Since topping out at $14.36 a unit back in February, this ETF is now down to $9.76 on current pricing. That's a pretty steep fall of more than 30%.

Looking at some of the individual shares listed above and things look even worse. The Tencent share price is down more than 42% from its 52-week high. JD and Alibaba aren't too far behind, while Baudi is out in front, down more than 53% from its February peaks.

So what's going on here?

China shares face CCP wrath

Well, according to a report in the Australia Financial Review (AFR) today, it's the Chinese government that is largely to blame. The Chinese Communist Party (CCP) has reportedly been executing a crackdown on several industries in China. Most prominantly education and tech companies.

The CCP is forcing certain educational businesses to reorganise as not-for-profit groups. It has also banned them from raising capital on the private markets. Further, the government is also bringing in more regulation, including new rules for delivery drivers.

This follows an incident last year, which saw Alibaba ditch a float of its financial division Ant Group. This also saw Alibaba founder Jack Ma retreat from public life after making comments that some interpreted as critical of the central government.

The report also states that the CCP wasn't too happy with the IPO of Chinese ridesharing company DiDi Global Inc (NYSE: DIDI) last month. This reportedly went ahead, even though "Chinese regulators recommended a delay".

Here's what the report stated happened next:

This insubordination was quickly punished. Days after it went public, China's internet regulator ordered Didi to undergo a cybersecurity review, and banned the road-hailing group from accepting new users.

DiDi shares are now trading for less than half of what they were on the company's first day of trading.

Overall, it seems that the CCP is putting its own control of China's largest companies ahead of what might be good for the short-term (and perhaps medium or long term) share market performance of its largest companies.

This is probably something that every ASX investor with an interest in China shares should pay attention to.

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Thus, if you are really bullish on tech, it might be prudent to look beyond our shores to bolster your portfolio.

That's where this ASX exchange-traded fund (ETF) comes in.

The BetaShares Asia Technology Tigers ETF (ASX: ASIA) is an ETF dedicated to tracking the best tech companies in Asia, outside of Japan. Asia is the most populous continent on the planet. Despite this, it's also an area where the big US tech companies have a far more limited reach and scope than in advanced economies like the US and Australia. Alphabet Inc's (NASDAQ: GOOG)(NASDAQ: GOOGL) Google is essentially banned in China, after all. As is Netflix Inc (NASDAQ: NFLX) and Facebook Inc's (NASDAQ: FB) products.

Asian tech tigers roar

That's where the usefulness of an Asian tech company like Baidu might come in handy. It's often described as the 'Google of China'. Or iQiYi, the 'Netflix of China'. Not to mention the pervasive dominance of Chinese ecommerce companies like Tencent Holdings, JD.com or Alibaba Group Holding Ltd. These companies dominate both the Chinese e-commerce market, as well as China's social media scene.

All of these tech companies are major holdings of the BetaShares Asia Technology Tigers ETF. Other holding include the global electronics titan Samsung Electronics Co. As well as the giant computer chip manufacturer Taiwan Semiconductor Manufacturing Co Ltd.

But China is the country that dominates this ETF with 54% of the fund's holdings. Taiwan comes in second with 22%, with South Korea, India, and Hong Kong rounding out the list with 18.3%, 4.8%, and 0.2% respectively.

But turning to performance, and we can really see the value of investing in the Asian tech sector. The index that the ASIA ETF tracks has returned an average of 26.3% over the past 3 years and 29% per annum over the 5 years. The ASIA ETF itself has returned 36.5% per annum since its inception in 2018. As well as a whopping 70.34% over the past 12 months alone. It charges a management fee of 0.67% per year.

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China is the world's second-largest and most populous economy. As such, China has been climbing its way up investors' watch-lists in recent years. In no doubt helped by the stellar performance of some of its biggest companies.

US-based tech companies like Tesla Inc (NASDAQ: TSLA), Alphabet Inc (NASDAQ: GOOGL)(NASDAQ: GOOGL), Amazon.com, Inc (NASDAQ: AMZN) and Netflix Inc (NASDAQ: NFLX) are arguably still more popular with Aussie investors. Even so, it's fairly safe to say that Chinese companies have worked their way into the ASX investor conscience.

Aussie investors are probably familiar with one of China's biggest companies after 2020 – Tencent Holdings (OTCMKTS: TCEHY). Tencent made waves last year when it acquired a 5% stake in buy now, pay later (BNPL) darling Afterpay Ltd (ASX: APT) in May – an investment that would have already paid off very handsomely.

Chinese shares prove popular

Other Chinese companies, particularly those in the tech space, are also proving very popular. Just this week, we looked at some of the most popular international shares that ASX investors have been buying of late. And over the week of 4-8 January, 2 Chinese companies were in the top 10 list.

They were the e-commerce juggernaut Alibaba Group Holdings Ltd (NYSE: BABA) and the electric vehicle and battery manufacturer Nio Inc (NYSE: NIO), the 'Tesla of China'.

Other popular Chinese companies include JD.com Inc (NASDAQ: JD), often described as the 'Amazon of China', Baidu Inc (NASDAQ: BIDU), the 'Google of China' and iQiYi Inc (NASDAQ: IQ) the 'Netflix of China'.

The stellar performances of some of these companies have no doubt helped. Tencent, for example, is up more than 52% over the past 12 months. Baidu is up more than 70%, and Nio a whopping 1,550%.

As you might have noticed, these companies, although Chinese, are all listed on American stock exchanges like the Nasdaq and the NYSE. Tencent is listed on the over-the-counter (OTC) markets.

But these companies have recently become potential casualties of the rising geopolitical tensions between the United States and China. Just last month, US President Donald Trump signed a law that requires "foreign companies to submit to increased accounting disclosures and to certify that they are not owned or controlled by a foreign government".

According to reporting in the Australian Financial Review (AFR) 2 weeks ago, the NYSE has already begun the delisting process for 3 Chinese companies – China Telecom Corporation, China Mobile and China Unicom. Other popular Chinese companies like JD.com have initiated separate listings on the Hong Kong Stock Exchange in anticipation of a potential delisting move.

China's 'big 3' safe… for now

However, holders of the more popular Chinese companies will be breathing a sigh of relief today.

According to a separate AFR report today, the US government will not be forcing Alibaba, Tencent and Baidu to delist from American exchanges.

According to the report, the US Treasury has "blocked an attempt" by the Pentagon and the US State Department to delist these companies. That's despite the latter 2 agencies "pushing hard" for delisting due to "alleged links to the Chinese military".

Whilst this move might be irrelevant for many ASX investors who don't hold the US-listed Chinese shares themselves, it would have had other consequences.

A popular and best performing exchange-traded funds (ETFs) on the ASX is the BetaShares Asian Technology Tigers ETF (ASX: ASIA). This ETF has more than $558 million in assets under management, and has returned 62% over the past 12 months. It holds Alibaba, Baidu and Tencent, as well as JD.com and iQiYi. ASIA unitholders (and BetaShares) would be very pleased with this development.

In 2021, Chinese companies will instead be dealing with a Biden Administration in the US. As such, it's unclear whether the pressure on US-listed Chinese companies will deflate or ramp up in 2021 and beyond. But recent history is no doubt causing some worry for Chinese-focused ASX investors.

The post US decides against delisting Tencent and other Chinese giants appeared first on The Motley Fool Australia.

On Wednesday, the House of Representatives unanimously passed a bill that could result in the delisting of Chinese companies from U.S. stock exchanges. The Holding Foreign Companies Accountable Act (HFCAA) has been sent to President Trump, who is expected to sign the measure later today, which also received unanimous support from the Senate earlier this year. 

The sweeping legislation would require foreign companies to submit to increased accounting disclosures and to certify that they are not owned or controlled by a foreign government. It also includes provisions that the statements be backed up by an audit conducted in accordance with U.S. accounting rules by the Public Company Accounting Oversight Board (PCAOB).

The legislation could result in the delisting of a number of popular Chinese companies from major U.S. exchanges, including e-commerce players Alibaba (NYSE: BABA) and JD.com (NASDAQ: JD), as well as internet search giant Baidu (NASDAQ: BIDU) and electric vehicle (EV) maker NIO (NYSE: NIO).

Just last month, the Securities and Exchange Commission announced it was preparing to adopt tougher rules that could take effect as early as 2022. These requirements lay the groundwork for the delisting of foreign equities when their companies fail to comply with U.S. auditing rules. 

Regulators have long been vexed by the Chinese government's refusal to allow the PCAOB to review audits of Chinese companies listed on U.S. exchanges. Some believe this contributed to the spectacular fall from grace of Luckin Coffee (OTC: LKNC.Y), which flamed out earlier this year following the discovery of massive and widespread fraud. The company was found to have manufactured a significant portion of its 2019 revenue and was subsequently booted from the Nasdaq exchange.  

Numerous companies in China have admitted to contingency plans if the bill is passed. NetEase (NASDAQ: NTES) and JD.com each acknowledged the proposed rules when they announced subsequent listings on the Hong Kong Stock Exchange.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post President Trump to sign bill that could kick Chinese stocks off U.S. exchanges appeared first on The Motley Fool Australia.