Key investment points:
At the end of March 2022, the US Senate passed the more than 3000 page American Competition Act amended by the Senate. The bill will then be sent back to the house of representatives for a consultative meeting and voted again.
As the largest “industrial policy” legislation in the history of the United States, this bill reflects a major change in the industrial strategy of the United States. The attitude of the United States towards industrial development has changed from “laissez faire and freedom” to deep intervention and support of policies. At the same time, much of the content of this bill is related to China, which reflects that the U.S. competition policy towards China is spreading from the trade level to the industrial level and even a broader strategic level.
The nearly 3000 page bill puts forward a systematic competitive strategy and stimulus plan in many key areas such as semiconductor chip manufacturing, energy, scientific research and innovation, alliance trade and diplomacy, which is bound to have a huge and far-reaching impact on the United States itself, China and the whole world. Considering that the bill has been passed by the U.S. House of representatives in February, and U.S. President Biden publicly expressed his support for the content of the bill long before the two houses voted, the rapid signing of the bill into law is quite certain.
Investment strategy: the “American Competition Act” will undoubtedly have a far-reaching impact on China. From the perspective of investment, the act will intensify the competition between China and the United States in the field of high-tech industries, and further accelerate the pace of import substitution of China’s high-end industries. For the capital market, we believe that there are two most direct impacts: first, we should not take lightly the severity of the follow-up supervision of zhonggai shares in the US market, and the investment of zhonggai shares still needs to be cautious; Second, we still need to pay special attention to the sectors related to import substitution logic and industrial safety, such as semiconductors, new materials and biotechnology. This sector has long-term growth. Special attention shall be paid to the leading segments with small market value and large import substitution space, such as Shanghai Fudan Microelectronics Group Co.Ltd(688385) , Shenzhen Xinyichang Technology Co.Ltd(688383) , Beijing Huafeng Test & Control Technology Co.Ltd(688200) , Thinkon Semiconductor Jinzhou Corp(688233) , Cathay Biotech Inc(688065) , Anhui Huaheng Biotechnology Co.Ltd(688639) , etc.
Risk warning: the relevant import substitution process is not as expected; Export markets are restricted
