China is advancing at exceptional speed in AI, robotics, biotech, green transition, electric vehicles, and other key innovation sectors. Its cost advantage versus the US is enormous, while performance remains highly competitive. The main drag on the economy has been the long adjustment after the property bubble burst, which has weighed on local consumption. However, over the next two to three years this pressure may normalize, while the “new China” continues to accelerate. At the same time, Chinese equities trade at a significant discount to global markets and offer higher dividend yields. For this reason, China, especially through Hong Kong, is an underappreciated long-term opportunity in global portfolios.

Listen to Davide Serra (Founder & CEO, Algebris Investments) in his latest analysis.