An employee works on the semiconductor wafer production line at Cuoda Group’s Jiangsu Azure Corporation factory. China has increased investment in its chip industry as it seeks to be self-sufficient in critical technologies needed for electric cars, smartphones and more.

VCG | Visual China Group | Getty Images

Tensions between the US and China have pushed Beijing to become more self-sufficient, and that could be good for innovators in China, according to an investment specialist at JPMorgan Asset Management.

“One of the unintended consequences of this push between the US and China is that it just underscored China’s determination to become self-sufficient in a whole range of industries,” Alexander Treves said on CNBC’s “Street Signs Asia” on Thursday. .

In the mid-1990s, Chinese companies were mostly mass goods producers, he added.

“Now you have real technological innovators,” he said. “I think the geopolitical tensions that you’re talking about are just going to exacerbate that — because China needs to do these things on its own, and they’re going to continue to make progress in that area.”

China has increased investment in its domestic chip industry as it seeks to be self-sufficient when it comes to critical technologies for products ranging from electric cars to cellphones. But it still relies heavily on foreign technology.

Treves said investors should look for companies that will succeed despite geopolitical tensions.

“Geopolitics is here to stay, so get used to it, just accept it,” he told CNBC.

JPMorgan optimizes Chinese technology

JPMorgan has invested in Chinse technology companies this year, an investment specialist said.

Some of the firms have “world-leading business models” and a huge addressable market, while valuations are better than before, he added.

In addition, profitability has improved because companies spend less and are less aggressive with each other — partly because of regulations, Treves said.

“This year, we have increased the number of Chinese Internet companies for this very reason,” he said.

Separately, in China’s electric vehicle space, Treves said JPMorgan is looking for companies with the most pricing power — typically battery makers, rather than specific car brands.

“Then you don’t have to bet on which brand will be successful, on whether someone will buy that brand or another,” he said.

Another fund manager, Edmund Harris, head of Asia and emerging markets at Guinness Asset Management, is also bullish on China’s electric vehicle sector, CNBC Pro reported.

He named two stocks that will drive the electric vehicle boom, and said companies in the electric vehicle, manufacturing automation and sustainable energy sectors are likely to outperform their global peers over the next five to 20 years.

— CNBC’s Arjun Harpal contributed to this report.

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