Despite the current pandemic, China retained solid growth in 2020. As the only major economy around the globe, the middle kingdom reports a positive economic growth of 2.3 percent in 2020. China’s pillars of growth traces back to its innovation power and a growing middle class, making Chinese companies the profiteers of globalized markets. One of China’s vital technological prevalence is the production of renewable power from wind and solar photovoltaics, and according to statistics from the International Energy Agency (IEA), China is the world leader in both of these fields. To enable Korean investors to benefit from the high demand for Chinese clean energy technology, Mirae Asset Global Investments continues reissuing its already successful ETFs in Hong Kong under its TIGER ETF Brand in Korea. The new Mirae Asset TIGER China Clean Energy Solactive ETF (396510 KS) starts trading on August 10th on Korea Exchange (KRX). The ETF tracks the Solactive China Clean Energy Index.
China plays a critical role in the global demand and supply of renewable technology. Not only is China the largest manufacturer of solar panels and wind turbines, but it is also the biggest supplier of raw materials such as silicon and rare earth materials that play a vital role in the production of renewables technology. This initial situation builds a confident position on which Chinese companies draw on, making this business sector a promising opportunity for investors.
The Solactive China Clean Energy Index, which serves as the underlying for the Mirae Asset TIGER China Clean Energy Solactive ETF (396510 KS), tracks exactly those companies with significant exposure to affordable and clean energy and its related supply chain, headquartered in China or Hong Kong. Eligible companies should be listed on one of the following exchanges: Hong Kong (HKEX), Stock Connect: Shanghai and Shenzhen, and NYSE and NASDAQ. Furthermore, companies from nine industry and economic sectors, comprising, for example, alternative power generation, engineering & construction, industrial specialties, and semiconductors, are included in the index, resulting in 20 stocks making up the index composition.
“Before 2020, China’s global market share in renewable technology totaled up to 40%, reaching 50% in 2020 due to a rush to complete open projects before the Chinese government phased out special subsidies by the end of 2020, comments Timo Pfeiffer, Chief Markets Officer at Solactive. “It is assumed that China will remain one of the top players in terms of innovation in renewable technology, and Mirae Asset Global Investments’ new TIGER ETF enables Korean investors to benefit from this potential development.”
Nathan Namki Kim, Head of ETF Portfolio Management at Mirae Asset Global Investments, comments: “With China’s goal to reach carbon neutrality by 2060, the renewable energy sector in China will enjoy long term growth. Currently, China accounts for a third of globally installed renewables capacity and according to IRENA, renewable energy has the potential to meet over 90% of China’s electricity demands by 2050. We believe the Mirae Asset TIGER China Clean Energy Solactive ETF is well positioned to benefit from the country’s commitment to support the development of renewable energy.”