'Tale of two stories': Baillie Gifford's comanager says China undergoing powerful transformation

Baillie Gifford's comanager Linda Lin shared her optimistic outlook on the China Growth Trust, highlighting its strong potential in the years ahead. 

Lin described China's current situation as “a tale of two stories,” reflecting the contrasting narratives seen in the media and on the ground.

She explained that one perspective, commonly portrayed in Western media, focuses on the challenges facing China — particularly the struggling property sector, weak consumer confidence, and escalating tensions between China and the United States. 

This narrative paints a bleak picture of a slowing economy, contributing to investor hesitation. Lin acknowledged that over the past few years, China’s equity market has significantly underperformed compared to global benchmarks.

However, the second narrative — the one she and her team encounter daily as investors — offers a vastly different picture. Lin emphasised that China is undergoing a powerful transformation, emerging as a global leader in key industries such as electric vehicles (EVs), solar energy, clean technology, and artificial intelligence. 

China currently accounts for about a third of the world’s manufacturing output, and this industrial strength, she argued, is at the heart of a more dynamic and promising growth story.

Backing her confidence with performance data, Lin noted that in 2024, China’s equity market was among the best-performing globally. The China Growth Trust itself delivered approximately a 40% return for its shareholders over the 12 months ending in March 2025. 

For long-term growth investors, Lin believes the story of innovation and transformation is more significant than the short-term negative headlines, as this is where the real potential for future growth lies.

She further explained why she sees this recent market performance as more than just a short-term rebound. Since September of the previous year, Beijing has adopted an aggressive policy stance aimed at revitalising economic growth — an approach she described as the most assertive since the global financial crisis. 

These policy moves, in her view, indicate a serious commitment to reigniting momentum in the Chinese economy.

Additionally, Lin pointed to the Chinese government's renewed support for private enterprise as a key signal of future stability and growth. She cited a notable event from January, when President Xi Jinping met top entrepreneurs, including the founders of Alibaba and DeepSeek. 

According to Lin, this high-profile engagement sent a strong message to global markets: the government is ready to back private companies, which she considers the true engines of China’s economic growth.