China’s new growth leaders: inventing, not copying
Short Briefings on Long Term Thinking - Baillie GiffordShow Notes
From new cancer drugs to batteries and robotics – China’s top-tier growth companies are forging paths of their own rather than following in the west’s footsteps. Investment manager Sophie Earnshaw names companies that have caught her eye and explains why being a long-term stock picker differs in China from elsewhere.
Background: Sophie Earnshaw is a decision-maker on our China Equities Strategy and joint manager of the Baillie Gifford China Growth Trust.
In this conversation, she tells Short Briefings… host Leo Kelion about a select group of Chinese companies breaking new ground, supported by the state’s efforts to become self-sufficient in more of today’s critical technologies and a leader in some of those of the future.
Earnshaw also details how the “phenomenal rate” at which companies are born, scale and die in the country makes stock-picking a challenging task – making the access we have to company leaders, academics and other local expertise core to our mission of finding the best firms to invest in on behalf of our clients.
Portfolio companies discussed include: - CATL – the battery maker whose products power electric vehicles worldwide and increasingly support the renewable energy sector - BeOne and Innovent Biologics – pharmaceutical firms developing the next generation of cancer drugs - AMEC and NAURA – semiconductor equipment makers enabling China to develop increased self-reliance in computer chips - Alibaba, ByteDance and Tencent – China’s ‘big tech’ companies, whose artificial intelligence tools are becoming embedded into people’s daily lives - MiniMax – the AI startup rolling out video and agentic tools at a fraction of the cost of western counterparts - Horizon Robotics – the automated driving tech provider with its eye on an even bigger opportunity.
Resources: Baillie Gifford podcasts China: a tale of two stories China investment strategy hub (institutional clients only) House of Huawei Private investor forum 2025: investing in great growth companies Trip notes: on the road with Baillie Gifford China Growth Trust
Companies mentioned include: Alibaba AMEC ASML BeOne ByteDance CATL Horizon Robotics Innovent Biologics Jiangsu Hengrui Huawei MiniMax Samsung NAURA Tencent TSMC Xiaohongshu
Timecodes: 00:00 Introduction 01:55 Joining the China Equities Strategy 02:40 Intense competition 04:00 The government’s influence 06:10 CATL, the electrification champion 08:45 Investing with a 5-year time horizon 10:25 Shanghai office, local expertise 11:45 Regulations and geopolitics 14:30 China’s next Five-year Plan 16:15 Innovent Biologics’ new cancer drugs 18:10 Lower-cost clinical trials 19:45 Being selective in semiconductors 21:25 Investing in chip equipment makers 23:00 China’s ‘big tech and AI’ 25:10 MiniMax making AI like ‘tap water’ 27:45 The road to robotics 29:35 A market you can’t ignore 30:30 Book choice
Glossary of terms (in order of mention):
Third plenum: a major policy meeting of China’s ruling Communist Party, often used to set big economic/political direction. Sovereign bond issuance: The government raising money by selling bonds (IOUs) to investors. Opportunity set: the range of investable companies available to choose from. Capex: capital expenditure – money spent on long-term assets like factories, equipment, or data centres. Fiscal deficit target: how much more the government plans to spend than it collects in revenue (taxes plus other income), expressed as a share of the economy. GDP: gross domestic product – the total value of goods and services a country produces in a year. Market capitalisation: the total value of a company’s shares (share price × number of shares). ESG: environmental, social and governance – how a company manages environmental impact, people issues, and corporate oversight. Large-form batteries: big battery packs used in things like electric vehicles and grid storage. Energy storage systems: large batteries that store electricity for later use (helping balance the grid). G
More from Short Briefings on Long Term Thinking - Baillie Gifford
The biggest car-carrying ships on the planet. A chip-testing rig that weighs as much as a small elephant. Investment manager Alex Summers takes us inside some of emerging markets’ least-watched growth companies to explain how his team sees what others have missed. “Often, the crowd is going to be right,” he acknowledges, but when it’s not, long-termism, access to management and asking different questions are key to how his team determines investment opportunities.
“Europe looks more like emerging markets than it does North America,” Joe Faraday, Baillie Gifford’s new head of European equities, suggests in this conversation. He means that growth takes many forms across the continent, creating an eclectic mix of companies to choose from and specific circumstances to consider. As he reveals, it’s led him to reposition the portfolios under his watch, broadening the types of companies they contain.
Baillie Gifford first invested in SpaceX in 2018, nearly eight years before its record-setting stock market listing. Investment manager Luke Ward, who championed the holding, discusses what first drew him to the business, why Starship is critical to its future, and reveals where he’s now looking for another company with industry-upturning potential.
Tokenisation represents an “operating system upgrade” for the investment industry, says Theo Golden, Baillie Gifford’s new head of digital assets. In this episode, they explain what it involves and how it should deliver a better experience, both by reducing the number of middlemen between you and your investments and making your holdings more “useful”.
The US public’s tastes and habits are fragmenting, leading to new consumer behaviours. The shift from a handful of TV networks to an endless supply of streamed shows and social media clips is just one of many causes. Investment manager Dave Bujnowski discusses the characteristics that determine which growth companies should thrive in the resulting ‘high entropy’ environment.