The world collectively exhaled this week as trade talks in South Korea between US President Donald Trump and China’s President Xi Jinping concluded. Heralded as “amazing” by the US President, the discussions suggest a potential trade truce after weeks of escalating tensions between the two superpowers.
But it was not all good news as equities in both the US and China saw gains pare back from pre-meeting levels over the scarcity of details, the absence of a formal agreement and the lack of discussion on Nvidia.
Wenchang Ma, China equities portfolio manager at Ninety One, has argued that China’s diversified trade partnerships and structural reforms present a more nuanced picture.
With US exports now accounting for just 14 per cent of China’s total – down by more than a quarter over the past decade – she argued that increased investments in Southeast Asia and other emerging markets are underscoring China’s central position in global value chains.
“For investors, China’s trajectory will be shaped less by US politics and more by domestic reform and regional integration – factors best assessed through long-term fundamental analysis,” Ma said.
China as a long-term growth hub
Delving further, she noted that while institutional investors and asset allocators are no strangers to diversification, their portfolios still remain largely concentrated in developed markets and domestic resource sectors.
However, as global growth drivers shift, she said this is creating a structural gap which makes China and emerging markets more attractive for investors seeking long-term, diversified exposure.
“For much of the past decade, China was considered the growth engine of emerging markets, only to fall short of expectations in recent years.
“Investors endured lacklustre equity returns, policy crackdowns and persistent geopolitical headwinds. Between August 2021 and August 2024, the MSCI China index fell by 35.5 per cent, even as the MSCI ACWI gained 18.4 per cent,” Ma said.
With policy shifts, renewed shareholder focus, and economic transformation all underway, she argued China is at somewhat of a turning point now.
She pointed to September 2024’s rally, which lifted valuations from decade lows, with the MSCI China All Shares Index gaining about 23 per cent. Since then, this rebound has proven more durable, with almost 75 per cent of the subsequent 12 monthly index returns between October 2024 and September 2025 being positive.
At the heart of China’s growth and resilience, as highlighted by Global X investment strategist Billy Leung earlier this month, are the nation’s policies focusing on quality, efficiency and sustainability rather than scale.
Ma echoed this sentiment, adding that while China’s initial efforts to stabilise growth through monetary easing did little to inspire confidence, policy became more balanced by late 2024.
For her part, she said fiscal support for local governments and targeted property interventions changed to show a proactive commitment to addressing fundamental imbalances, not short-term solutions.
“This shift aligns with the longer-term ‘dual circulation’ strategy, which emphasises domestic consumption and innovation alongside global trade.
“Realising this vision requires greater investment in healthcare, education and social security to bolster household confidence and reduce precautionary savings,” she said.
Ma also drew attention to the swift evolution within China’s corporate landscape, noting the rise in share buybacks and dividend growth, which points to a heightened emphasis on profitability and shareholder value.
She said China presents appealing long-term prospects, driven by its growth aligning with three significant global megatrends: decarbonisation initiatives, advancements in healthcare, and innovation in technology and consumer markets.
Ma contended that these sectors provide varied exposure, moving beyond commodities and developed-market cyclicals to foster resilience and diversification.
She did, however, acknowledge the risks associated with China and other emerging markets, citing ongoing geopolitical tensions, demographic hurdles and inconsistent policy implementation.
However, she maintained that these challenges are increasingly balanced by structural reforms, stronger corporate governance and growing sectoral depth.
For investors, she said the opportunity lies in selective allocation, particularly in targeted exposure to growth sectors.
“With greater resilience and a broader opportunity set than in the past, China and its emerging market peers can now play a more meaningful role in building diversified, forward-looking portfolios,” she added.
