China’s waves of crackdown against its biggest internet companies are fuelling demand for technology stocks – a group that has so far remained untouched by the regulatory storm – in its onshore markets. While trades linked to the likes of Alibaba Group Holding , Tencent Holdings and Meituan have been unwinding in Hong Kong this year, gauges tracking mainland China-listed technology stocks have been on a stellar run. The ChiNext index of small companies rose to a six-year high last week in Shenzhen, and a gauge tracking the 50 most valuable companies on Shanghai’s technology-heavy Star Market touched its highest level in a year this month. Traders have been turning to onshore listed technology companies as an alternative to the fast-growing part of the economy represented by Alibaba and Tencent. One advantage is that the technology stocks have largely been shielded from Beijing’s clampdown, which is targeting monopolistic practices and cybersecurity, as they are engaged in businesses ranging from new energy to chip making and electronics that are underpinned by policy support. Clean energy is crucial to President Xi Jinping’s goal of cutting carbon emissions to zero by 2060 , and semiconductors is a field where Beijing has called for self-sufficiency to counter a US technology blackout. The ChiNext and Star Market “are benefiting”, said Hong Hao, managing director with Bocom International Holdings in Hong Kong. “The names trading there are not available in Hong Kong or overseas. And these names are part of the key ‘hardware manufacturing’ strategy going forward,” he said. While it is generally believed that China’s best technology companies are listed overseas, some of their onshore listed peers have of late grown big enough to challenge giants in traditional industries. For instance, two ChiNext-listed companies are now among the top 10 companies on the mainland’s exchanges. Contemporary Amperex Technology , a maker of lithium batteries that supplies to Tesla, is now among the four largest companies on the Shanghai and Shenzhen exchanges, capitalising at 1.2 trillion yuan (US$185.2 billion). Its market cap is bigger than Ping An Insurance Group’s and PetroChina’s. Shenzhen Mindray Bio-medical Electronics , which makes medical equipment, is ranked No. 8 with a market cap of 527.6 billion yuan. These two companies trade at least 80 times their earnings, a much higher premium over the broader market, which signals investors’ confidence that their growth has more room to run. This euphoria has to some extent come at the cost of Chinese technology stocks trading overseas. Mainland traders have turned sellers from buyers since the Didi Global episode deepened worries that Beijing’s heightened scrutiny of these internet juggernauts was far from over. They have sold a combined HK$19.1 billion yuan (US$2.5 billion) of Hong Kong stocks through the exchange link with the city this month, according to Bloomberg data. The Hang Seng Tech Index has lost almost a third of its values since its February peak, wiping out more than US$600 billion from the market capitalisation – or more than Thailand’s entire market. A move by China’s central bank to lower the reserve requirement ratio (RRR) on July 9 may further widen the performance divergence between Chinese technology stocks trading onshore and overseas, according to brokerages such as CSC Financial. While the regulatory scrutiny still weighs on Hong Kong-listed giants, their peers on the ChiNext and Star Market will be exposed to more funds chasing momentum. “The RRR cut means a loosening of monetary policies,” said Zhang Yulong, an analyst at CSC Financial. “That will allay market concern about liquidity and reinforce the view that growth stocks will be the top allocation.” Alibaba owns the South China Morning Post .