China's onslaught of regulatory crackdowns on tech companies rattled global markets this week when it announced some curtailing measures on after-school tutoring institutions and asked them to convert into not-for-profit companies.
China's Ministry of Industry and Information Technology (MIIT) said on Friday that big tech companies should step up the management of exporting "critical data" as well as their risk assessment of data security technology.
As per a Reuters report, China has also announced that it will ramp up its scrutiny of online ride-hailing firms under plans to strengthen the protection of worker rights and require firms to amend any noncompliant operations.
Mark Mobius, Founder of Mobius Capital Partners believes that the downturn in China is temporary and the outlook for emerging markets is positive.
"The Chinese government has cracked down on some of the large companies and these companies show up in the index as being very large. Their impact on the emerging market index is significant. So the result is it looks like the emerging markets are going down but other countries like India are doing very well. I believe this downturn in China is going to be temporary. So the outlook is quite good for emerging markets in view of the current situation," he said.
Also Read: Explained: Why is China clamping down on its tech industry
Mobius believes that India will benefit from the downturn in China.
"Given the regulatory hurdles in China funds might start moving towards emerging markets like India. However China is so large and is such a significant part of the entire emerging markets sphere that they would be returning to China as well. But India will benefit from this downturn in China and people will realise that they cannot have too many of their eggs in one basket in China", he said.
Mobius said he is heavily invested in technology sector.
"We are heavily invested in technology sector because the demand for internet connectivity, telecom etc is growing and along with that the demand for software is also increasing. So we are very happy with the valuations."
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