China’s economy continued to lose momentum in August, with a host of key indicators falling short of expectations, as quoted on CNBC. Weak domestic demand and Beijing’s efforts to handle industrial overcapacity weighed on growth.
Retail Sales Lose Steam
Retail sales rose 3.4% year over year in August, according to data from the National Bureau of Statistics. The figure missed analysts’ forecasts of 3.9% in a Reuters poll and marked a slowdown from 3.7% in July, the same CNBC article reported.
Industrial Output Weakens
Industrial production grew 5.2% in August, down from 5.7% growth in July and marking its lowest level since August 2024, based on LSEG data, as quoted on CNBC. Economists had expected growth to remain unchanged from the previous month, the CNBC piece reported.
Fixed-asset investment, reported on a year-to-date basis, rose 0.5% compared with 1.6% growth in the January-July period. This was far below economists’ forecasts of 1.4%, the very CNBC article indicated.
Time for Chinese Tech ETFs?
While China’s various segments have been reeling under pressure, the investment opportunity in the Chinese tech sector should not be overlooked. China’s inflation has been muted. This allowed the People’s Bank of China (PBOC) to maintain key lending rates at record lows for the three successive months during the August fixing, in line with market expectations, as quoted on tradingeconomics.com
Investors should note that a low-rate environment is good for high-growth sectors like technology. High-growth sectors with longer payoff horizons see their future earnings discounted less heavily amid a low-rate environment. This enhances their valuation.
China is heavily investing in artificial intelligence, robotics and semiconductors. Chinese tech companies are coming up with breakthrough technologies and innovations. In August 2025 too, Chinese investments in manufacturing logged “modest and uneven growth,” according to Zhang – principal economist at think-tank The Conference Board’s China Center. Growth happened mainly due to policy-driven state investment in infrastructure, high-tech and industrial upgrading, as quoted on the above-mentioned CNBC article.
China's recent "AI Plus" plan is another milestone to boost the country’s information technology industry. On 27 Aug., the State Council of China released the AI Plusplan with a goal of integrating AI across a wide range of fields.AI penetration in six key sectors is set to top 70% by 2027 and 90% by 2030. By 2035, China looks to transform its economy to be fully intelligent and digital.
Corporate Strength also calls for tech investments. Alibaba BABA shares have rallied 27.9% over the past month (as of Sept. 12, 2025) as the company rode China's Artificial Intelligence boom. Baidu BIDU has also jumped 27.8% in the past month (as of Sept. 12, 2025). Baidu’s rollout of ERNIE Bot highlights the intensifying race to turn AI breakthroughs into revenues. Ernie Bot’s free model should boost user adoption.
China Tech ETFs in Focus
Against this backdrop, below we highlight a few winning China tech-based exchange-traded funds (ETFs) that have gained solid returns over the past month (as of Sept. 18, 2025).
Invesco China Technology ETF CQQQ – Up 17.2%
KraneShares CSI China Internet ETF KWEB – Up 13.0%
KraneShares Hang Seng TECH Index ETF KTEC – Up 12.5%
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Baidu, Inc. (BIDU): Free Stock Analysis Report KraneShares Hang Seng TECH Index ETF (KTEC): ETF Research Reports Invesco China Technology ETF (CQQQ): ETF Research Reports Alibaba Group Holding Limited (BABA): Free Stock Analysis Report KraneShares CSI China Internet ETF (KWEB): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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