The Investor's Guide to China

In this bonus episode, we're hearing about three investment ideas that are exciting Fidelity’s Asia portfolio managers and how they play into the megatrends of artificial intelligence, the energy transition, and shifting supply chains.

Marty Dropkin, Head of Equities, Asia Pacific, is joined by Monica Li, Fidelity International’s Director of Research for China. With additional contributions from three of the company’s portfolio managers who have recently returned from a research trip in China: Dale Nicholls, Taosha Wang, and Madeleine Kuang. 

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To read more on the three megatrends discussed in this podcast, please visit fidelityinternational.com

Marty and Monica also discussed the Third Plenum - an important economic policy meeting that took place recently. For our analysis on that, read this article here.

For a more in-depth take on China’s currency and interest rates, listen to the previous podcast episode on the renminbi here.

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In this episode, we turn our attention to something that affects almost every investor in China: a weakening renminbi. The Chinese currency has lost almost 10 per cent against the US dollar in the last 18 months.

Is this a result of economic weakness in China or just another chapter in the strong dollar story? How is the renminbi performing against other currencies like the Japanese yen? Is currency weakness a cyclical challenge for the country or a structural trend? And what should investors do about it?

To help answer these questions, Marty Dropkin, Head of Equities, Asia Pacific, is joined by Asia Economist, Peiqian Liu, and Fixed Income Portfolio Manager, Belinda Liao.

With additional contributions from Portfolio Manager Casey McLean.

To read more on the renminbi, please visit fidelityinternational.com

To read Belinda’s article on hedging, click here.

To listen to the previous podcast episode on ‘Japanification’, click here.

 

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Chinese healthcare is a vast universe, spanning everything from biotech to traditional medicine. It is also increasingly important as a growth driver for the economy as China's population gets older.

But recent policy shifts - both domestically and internationally - have obscured that structural story. Is it time for investors to pause and rethink their approach to the sector? Or should they double down for the growth opportunity at current valuations?

To help answer these questions, Marty Dropkin, Head of Equities, Asia Pacific, is joined by two of Fidelity International’s portfolio managers who invest in Chinese healthcare: Hyomi Jie and Tina Tian.

With additional contributions from healthcare analysts Duanting Zhai and Lizheng Zhu.

They also talked about Hyomi and Duanting’s recent article on medical device makers in China. To read that article and find out more about China’s healthcare sector, please visit fidelityinternational.com or click the following link: https://www.fidelityinternational.com/editorial/article/will-an-older-china-unleash-the-potential-for-homegrown-medical-tech-84e45f-en5/

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The story of China's economy and stock market has long been one of rapid growth. But as policymakers pivot to focus on the quality - instead of the velocity - of growth, investors are turning their attention to something more long-lasting: shareholder returns.

Dividends and buybacks are moving up the agenda of regulators and companies in China, generating interest for investors across the market, even in sectors of the so-called ‘old’ economy.

In this episode, Catherine Yeung, Investment Director, and Marty Dropkin, Head of Equities for Asia Pacific, are joined by two of Fidelity International’s portfolio managers: Lynda Zhou and Dale Nicholls. Together, they explore a change in the mindset of Chinese management teams, which industries are most prepared to ramp up payouts for their shareholders, and the role of regulators and investors in the process.

With additional contributions from Shanghai-based analyst Bunny Huang and Singapore-based Portfolio Manager Jochen Breuer.

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To read more on the rise of dividends in Asia, please visit fidelityinternational.com to find Lynda and Jochen’s recent article or click the following link: https://www.fidelityinternational.com/editorial/article/asian-stocks-enter-the-dividend-age-b65424-en5/

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Where people live within China - and why - is fundamental to understanding the country’s changing demographics. That, in turn, has important implications for the Chinese economy, consumption trends, and where investors should be looking.

In this episode, Catherine Yeung, Investment Director, and Marty Dropkin, Head of Equities, Asia Pacific, take you across China through the lens of Fidelity International’s Asia Economist, Peiqian Liu, and Jarlon Tsang, Managing Partner and Head of China at the venture capital firm Eight Roads, Fidelity’s sister company.

What role do migrants play in the past, present, and future development of the Chinese economy? Which Chinese provinces and cities could be home to the next unicorn? What do emerging migration patterns mean for China's cities and their businesses? And what does all of it mean for property markets?

With additional contributions from Portfolio Manager Hyomi Jie and Shanghai-based analysts Eric Zhu and Fiona Shou.
 
Read more at fidelityinternational.com

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In this episode, Catherine Yeung, Investment Director, and Marty Dropkin, Head of Equities, Asia Pacific, tackle a topic that often flies under the radar, but could in fact hold great potential for investors: China’s bond market.

Investors focused on the stock market, and the challenges Chinese property developers are facing, have often overlooked China’s bonds, which have boasted some of the best returns over the past few years.

Hong Kong-based Head of Asian Fixed Income, Lei Zhu, and Fixed Income Portfolio Manager, Alvin Cheng, from our independently run mutual fund business in China, join Catherine and Marty to discuss why the same economic narrative about China is playing out so differently in equities and bonds, and where investors should start their search for opportunities in this vast market.

With additional contributions from Singapore-based Multi-Asset Portfolio Manager George Efstathopoulos and Shanghai-based Senior Credit Analyst Crystal Cui.

Read more at fidelityinternational.com

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In this episode, Catherine Yeung, Investment Director, and Marty Dropkin, Head of Equities, Asia Pacific, explore the critical role of transition materials — minerals and elements, such as lithium, cobalt, and nickel, that are essential to developing and deploying clean energy technologies.

Demand for these materials around the world continues to grow so securing a reliable supply of them is a priority for countries trying to get to net zero. China has many of them in abundance and it dominates their production and processing, which in turn makes the country indispensable to a successful and sustainable transition.

Catherine and Marty are joined by Analyst and Portfolio Manager, James Richards, from London and Shanghai-based Director of Research for Equities in China, Monica Li, to discuss what investors can do to share in this boom and prepare their portfolios for a greener future.

With additional contributions from Hong Kong-based Analyst and Portfolio Manager Karen Zhou and Shanghai-based Sustainable Investing Analyst Binyu Zhao.
 
Read more at fidelityinternational.com

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In this special edition of The Investor’s Guide to China, Catherine Yeung, Investment Director, is joined in Hong Kong by Louis-Vincent Gave, the founder and CEO of Gavekal, a leading independent provider of global investment research.

They tackle questions from the development of China’s AI landscape and what it means for the country’s youth unemployment, to what the stellar performance of the Chinese bond market means for the country, and the internationalisation of the renminbi.

With an additional contribution from Portfolio Manager Tina Tian.

Read more at fidelityinternational.com

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When you look at some of the big economic issues China is dealing with today—lacklustre growth, a real estate slump, price disinflation, or an ageing population—you quickly realise Japan has been through a lot of the same challenges.

What can we learn from Japan’s experiences? Is there a policy playbook there for how to respond to similar economic pressures for China, or indeed, any other country confronting these challenges?

In October’s episode, Catherine Yeung, Investment Director, and Marty Dropkin, Head of Equities, Asia Pacific, are joined by Miyuki Kashima, Head of Investments, Japan, and Eric Nie, Co-Head of Investments, China, to talk through the lessons learned from Japan’s economic journey and what’s going on in China today.

With additional contributions from Ying Lu, Analyst & Portfolio Manager, and Reggie Pan, Investment Analyst.
 
Read more at fidelityinternational.com

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When it comes to currencies, it often feels like it's all about the US dollar. Although the greenback has dominated international trade and finance for decades, some subtle shifts have started playing out among the currencies of major economies. Rising geopolitical tensions and the changing structure of global trade are prompting some countries to rethink and scale back their reliance on the dollar, a process now referred to as ‘de-dollarisation’.

At the same time, China has been pushing to increase the use of the renminbi in international markets with the hope that someday it could challenge the dollar as a major reserve currency. This comes despite China's capital account remaining mostly closed and the renminbi not being freely convertible, and also despite the dollar's current dominance as the world's go to safe haven asset.

In July’s episode, Catherine Yeung, Investment Director, and Marty Dropkin, Head of Equities, Asia Pacific, ask Portfolio Manager, Morgan Lau, and Asia Economist, Peiqian Liu, how far can de-dollarisation go? Could it disrupt how companies or countries pay for imports and exports? Or even how the US funds itself as the world's biggest debtor nation?

With additional contributions from Amit Goel, Portfolio Manager, Monica Li, Director of Research, and Shing Zhu, Investment Analyst.
 
Read more at fidelityinternational.com

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