Two years ago, a large number of international investors considered China as an uninvestable stock market. “Geopolitical tensions, the real estate crisis, and weak consumer confidence had strongly eroded trust. However, behind these macroeconomic turbulences, a deeper transformation is underway: gradually, China is emerging as one of the nerve centers of global innovation,” acknowledges Naomi Waistell, emerging market equity manager at Carmignac, interviewed by Capital.
Today, technological revolution is no longer confined to artificial intelligence models. It extends to industrializing intelligence in the real economy: in factories, energy networks, logistics, vehicles, and cities. In this field, Asia – particularly China – has structural advantages, according to the manager. “Four of the top 5 innovation clusters in the world are now in Asia, with Shenzhen-Hong Kong leading the list. China represents nearly 47% of global researchers in artificial intelligence and about half of the patents filed in this area. Its open-source models, such as DeepSeek, are among the most downloaded in the world, offering advanced capabilities with much lower capital intensity,” highlights Naomi Waistell.
Context: China’s emergence as a global innovation hub is driven by its investments in cutting-edge technologies and infrastructure.
Fact Check: Check the source of the information and verify the statistics mentioned about China’s innovation and research capabilities.
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China is one of the epicenters of the next wave of technological innovation**
However, the focus goes beyond digitalization. The real revolution “involves integrating intelligence into the physical world: robots, autonomous vehicles, industrial machines, and infrastructure. And this transformation is rapidly unfolding in emerging economies,” the expert emphasizes. Referred to as the “world’s factory” for a long time, China has a natural advantage in this new phase.
The adoption of robotics “accelerates where industrial scale is significant, labor is scarce, and salaries are increasing – characteristics defining the current Chinese economy,” says Naomi Waistell. China installs more industrial robots each year than the United States, Japan, and Europe combined, with over 1.7 million units already in operation. During visits to China, robots greet visitors in hotels and serve customers in certain stores: this future is already a reality.
This industrial revolution also involves an energy challenge. “Applying intelligence to the physical world requires abundant and reliable energy. Here too, China has a strategic advantage: it installs more renewable energy capacity annually than the rest of the world combined and controls a significant portion of essential rare earth metals necessary for electrification and robotics,” argues Naomi Waistell. In this context, China emerges as one of the epicenters of the upcoming technological innovation wave.
Context: China’s advancements in robotics and renewable energy showcase its commitment to sustainable growth and development.
Fact Check: Verify the data on China’s capacity for renewable energy installation and control over rare earth metals for technological advancements.
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In the stock market, investing in Chinese stocks requires more selectivity and discipline than ever!**
In this scenario, investing in Chinese stocks demands selectivity and discipline more than ever. Instead of seeking broad market exposure, Carmignac advises favoring companies capable of benefiting from new structural growth drivers: artificial intelligence, robotics, future mobility, or advanced manufacturing. The electric mobility value chain serves as a prime example. “CATL, the global leader in electric vehicle batteries and energy storage solutions, enjoys a sustainable competitive advantage due to its technological expertise and production scale,” notes Naomi Waistell.
On a broader scale, China now houses a generation of companies able to develop cutting-edge technologies while maintaining a competitive cost advantage. In various sectors, “these players offer more efficient and accessible solutions than their international counterparts. Additionally, another segment drawing investor attention is companies offering high returns to shareholders. Dividends and share buybacks reach record levels, supported by strong cash flows, providing an appealing alternative in an uncertain macroeconomic environment,” the manager explains.
Context: The article emphasizes the importance of strategic investment approaches in Chinese stocks to capitalize on the country’s technological advancements and economic growth.
Fact Check: Verify the performance of Chinese stocks in relation to dividend yields and share buybacks compared to international markets.
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Direct stock trading, funds, ETFs—What investments to prioritize for the Chinese stock market?**
Therefore, rather than viewing China solely through its economic challenges, it’s better to observe the structural transformation of its industrial and technological fabric, according to Carmignac. “In a world where innovation is increasingly embodied in the physical world – robots, autonomous vehicles, smart infrastructure – emerging markets, and particularly China, could find themselves at the heart of the next industrial revolution,” predicts Naomi Waistell.
For investing in Chinese stocks, various options are available: buying individual stocks directly, investing in Chinese equity funds (such as those offered by Carmignac, like Carmignac China New Economy), or purchasing dedicated ETFs. Momentum, Capital’s premium daily investment newsletter on the stock market, accurately forecasted the surge in Chinese stock prices over the past two years, thanks to technical and financial analysis. By choosing an annual subscription, you get 5 months free. And through our partnership with the Technical Analysis Trade Fair on March 27, enjoy an additional 30% discount! To take advantage of this offer, simply click on the link provided.
Context: The article provides insights into different investment options for those interested in the Chinese stock market, highlighting the potential for growth and profitability.
Fact Check: Verify the credibility of the analysis provided by Momentum and the potential benefits of investing in Chinese stocks compared to other markets.
