Merryn Talks Money Is China Reversing Its ‘Uninvestable’ Image?
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Jun 6, 2025 Dale Nicholls, Portfolio Manager of the Fidelity China Special Situations Trust, shares insights on the evolving investment landscape in China. He highlights China’s transition from an 'uninvestable' status, showcasing its innovation in electric vehicles and artificial intelligence. Nicholls delves into the challenges investors face in understanding market dynamics amidst geopolitical tensions. He also discusses the implications of China's aging population and the potential for economic recovery, emphasizing emerging opportunities in the private sector.
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Geopolitical Tensions Are Natural
- China's political friction with the US is a natural part of its rise as a major economic competitor.
- Despite tensions, economies remain deeply interconnected, preventing full decoupling.
Chinese Firms' Resilience to Tariffs
- Chinese companies have adapted well to previous tariff pressures and hold substantial control over their supply chains.
- Tariff impacts are primarily about price elasticity, not market share loss, demonstrating resilience.
Economic Growth Despite Property Drag
- China's economy still grows around 5%, with property sector drag peaking now and signs of stabilization emerging.
- Consumer confidence and spending are expected to improve as the property sector recovers.
