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.

By John K  WaDisho

While headlines in the West continue to paint a gloomy picture of China’s economy—plagued by real estate woes, slowed growth, and geopolitical tensions—a very different narrative is unfolding on the ground. According to a recent report by Baillie Gifford, one of the UK’s leading investment managers, China is quietly undergoing an industrial and technological revolution that deserves global recognition.

Two Stories, One Country

For years, coverage of China in mainstream Western media has been overwhelmingly negative, focused on a sluggish property sector, U.S. trade tensions, and concerns over authoritarianism. But this narrative obscures a more dynamic and underreported transformation: China is now the engine room of global innovation in green technology, automation, artificial intelligence, and industrial manufacturing.

In 2024, China defied global market expectations to become the world’s best-performing major stock market. The Baillie Gifford China Growth Trust posted an impressive 38% increase in net asset value in the year ending March 2025—an affirmation of a deeper structural shift that goes beyond short-term headlines.

A Policy Pivot With Purpose

The turning point came in late 2024 when Beijing introduced a comprehensive package of reforms aimed at stimulating the domestic economy, restoring confidence in private enterprise, and unlocking long-term growth. The focus was not only on financial stimulus but also on strategic support for the internet and tech sectors—areas previously hindered by strict regulations.

This pro-growth pivot has particularly benefited companies such as Tencent, Meituan, PDD, and ByteDance, all of which are now leveraging advances in AI to optimize user engagement, streamline operations, and unlock new revenue streams. Remarkably, despite doubling profits since 2021, the market capitalization of these Chinese tech giants has been cut in half—making them undervalued and ripe for long-term investment.

Innovation at Scale

China has long graduated from being the “world’s factory” to becoming a global innovation powerhouse. Its companies are no longer just replicating foreign technologies; they are setting new global benchmarks. From electric vehicles to AI-driven social commerce, Chinese brands are gaining popularity beyond their borders, particularly in Southeast Asia, Latin America, and even mature markets like Norway and Australia.

The rapid rise of companies like BYD and Horizon Robotics showcases China’s ambition to dominate future-facing industries. With 40% of the world’s STEM graduates produced annually in China, the country possesses a talent pipeline unmatched globally. As Apple CEO Tim Cook once remarked, China’s strength lies not in low-cost labor but in high-skill engineering—enough to “fill several football fields” with tooling experts.

The Domestic Engine

Baillie Gifford’s report emphasizes that China’s economic strategy is increasingly inward-looking—not out of isolationism, but because of growing confidence in its domestic consumption and innovation base. More than 80% of revenues from the Trust’s portfolio companies are generated within China itself.

Even amid post-pandemic caution, domestic consumption is rebounding in nuanced ways. Luxury brands like Kweichow Moutai remain in high demand, while budget-savvy shoppers flock to PDD’s value-driven platform. Meanwhile, experiential consumption is on the rise—chains like Luckin Coffee and hotpot giant Haidilao are enjoying record customer traffic, with Haidilao serving over 450 million diners in 2024 alone.

Resilience in a Shifting Geopolitical Landscape

Despite continued trade tensions and Western scrutiny, China has demonstrated surprising resilience. Exporters have diversified away from the U.S., while local industries—particularly in semiconductors—are racing to fill gaps left by foreign restrictions. Domestic champions like AMEC, Naura, and Horizon Robotics are stepping into the breach, building China’s version of high-tech independence.

The report also notes a broader shift in investor sentiment. Foreign inflows into Chinese equities turned positive in the last quarter of 2024 for the first time in two years, as policy clarity improved and valuations became too attractive to ignore.

Why China Still Matters

China accounts for just 3% of the MSCI World Index, yet when filtering for companies expected to grow revenue by more than 20% annually over the next three years, 35% of them are Chinese. No other economy is undergoing such a large-scale shift toward innovation and self-sufficiency.

Of course, investing in China is not without risk—volatility, regulatory challenges, and geopolitical friction remain. However, the scale and speed of change in China present unparalleled opportunities for long-term investors willing to look beyond the noise.

As Baillie Gifford puts it, “When change happens in China, it happens with remarkable speed and at an unparalleled scale.” That change is already underway—and the rest of the world would do well to take notice.

The views expressed in this article are those of the author, John K WaDisho, a political correspondent, and do not necessarily reflect the views of Namibia Daily News. He writes in his personal capacity.

This article is intended for informational purposes only and does not constitute investment advice.