By John K WaDisho
Windhoek| 06 August — After several challenging years, China is re-emerging as a global growth engine—this time powered not by cheap labour, but by cutting-edge innovation, technological leadership, and a wave of government-backed reform.
This was the key message delivered by Linda Lin, co-manager of the Baillie Gifford China Growth Trust, in a recent investor webinar. Lin offered a candid, balanced assessment of China’s dual narratives: a sluggish property market and geopolitical tension on one side, and on the other, a powerful industrial transformation driving clean energy, robotics, and artificial intelligence.
“Both stories are real,” Lin noted, “but we focus on the one of innovation, because that’s where the future growth lies.”
Indeed, that growth is already visible. In the year to March 2025, the Baillie Gifford China Growth Trust returned nearly 40%—significantly outperforming the MSCI China index. Far from being a short-term rally, Lin argues this marks the start of a “long-term, sustainable recovery” in China’s equity market.
What’s driving the rebound? Lin cites decisive government stimulus, a more supportive stance towards private enterprise—including public gestures like President Xi Jinping’s high-profile meeting with tech founders—and a resurgence in consumer confidence. China’s vast savings, equivalent to twice the UK’s GDP, sit ready to fuel spending once sentiment stabilises.
The Trust’s portfolio reflects a sharp tilt toward high-growth, private-sector companies: BYD, now the world’s top EV seller in Europe; Pop Mart, a youth-focused toy brand expanding into the West; and DeepSeek, a homegrown AI giant proving that China can compete in Large Language Models.
Skeptics warn of political risk, deglobalisation, and weak demographics. Lin responds firmly: “Walking away from China is a mistake. More than 85% of our portfolio’s revenue comes from within China. If investors avoid China, they risk missing a third of the world’s best growth opportunities—often trading at a 45% discount.”
The Trust has even tapped into unlisted giants like ByteDance (owner of TikTok), demonstrating a keen eye for long-term private-market opportunities.
Challenges remain, from geopolitical uncertainty to property sector fragility. But Lin is clear: “China is not what Western headlines suggest. Visit Shanghai. See the infrastructure, the energy, the ambition.”
In a world desperate for growth, ignoring China may prove more costly than engaging with its complexities. As Lin concluded, “We invest for the long-term, and in China, the future is being built today.”
John K WaDisho is a political correspondent. He writes in his personal capacity.
This article is for informational purposes only and should not be considered financial advice. Investing involves risk. Capital is at risk. Past performance is not a guide to future returns.
