Investors predict that China’s regulatory crackdown on technology may continue for decades

Tariq Dennison of GFM Asset Management predicts that China’s regulatory crackdown on technology may continue for decades, but it is unlikely to prevent long-term investors from investing their money.

“If you ask me, I will say, at least give it another 20 or 30 years,” Denison was asked in an interview with CNBC’s “Squawk Box Asia” on Monday how long the months-long crackdown could last.

“All of this happened in stages-look at the progress of technology regulation over the past 30 years,” the wealth manager said. “These things seem to happen gradually, but there are many, many steps along a very, very long road.”

However, he does not expect long-term investors to be hindered by the uncertain regulatory outlook.

“What I want to say now is that Patient Capital is actually buying more and more shares Baidu, Alibaba, Tencent with Jingdong Because they focus on long-term prospects,” Denison said. Patient capital usually refers to investments that have a longer time horizon and are less speculative.

He added: “These technology companies are babies thrown away by the property’s bath water, and babies thrown away by the supervised bath water.”

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Denison said that Chinese technology giants can actually benefit from any new legislation.

“If you ask me, the new regulations are more likely to consolidate these companies and provide them with a broader moat, because Tencent is very, very likely to adapt to any of these new rules and find new ways to make money. And they have a lot of consumption. Can serve in a shared prosperity model,” he said, referring to the Chinese President Xi JinpingThe goal of spreading wealth.

“I often say that if you want to explain the bull market of common prosperity, it is basically trying to prevent the gap between the rich and the poor from becoming too large and to ensure that the big consumer middle class, they will also buy Baidu, JD.com, and Alibaba to provide it,” Dennison said .

— CNBC’s Arjun Kharpal contributed to this report.

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