You are on our wealth management services website for advisors & wealth managers.
Browse more Fidelity websites here.
Portfolio Manager Insights
China may be quietly redefining the rules of innovation
China is in the midst of an “innovation revolution,” with transformative trends unfolding in electric power, biotechnology and computing, says Fidelity’s John Dance.
- China is hardly a sleeping giant when it comes to innovation, according to Fidelity Portfolio Manager John Dance, who believes several forces are helping to drive lower costs, cutting-edge tech and global deals across industries.
- “Fundamentally, I believe there are some incredibly positive trends afoot in China that I think could redefine the global investment landscape,” says Dance, who manages Fidelity Advisor® Emerging Markets Fund.
- In helming the diversified emerging-markets strategy since 2019, Dance’s approach is anchored by his belief that market inefficiency is driven by investor psychology, market microstructure and asymmetric information, which can lead to mispricing and create opportunities for active management. He seeks companies with strong, stable growth characteristics.
- China’s dominance in electric power is no accident, according to Dance, noting that the nation has increased its lead by moving up the quality curve at attractive prices. Since 1991, the country has achieved a significant increase in electrical efficiency, due in part to businesses like Sieyuan Electric, a maker of power-transmission equipment and a sizable fund holding as of February 28, 2026.
- Dance notes that increasingly efficient electrical components, including solar cells, batteries and semiconductors, have driven China to the forefront of the electric-vehicle industry.
- “Look no further than lithium batteries,” explains Dance. “Production costs have plummeted, and energy density has steadily improved, making Chinese EVs more efficient and accessible, a powerful combination that is being felt by competitors throughout the global auto market.”
- Meanwhile, he says that for years China’s biotech industry relied on Western advances in medicine to be licensed within the country for local-market access. But today, the script has flipped.
- Chinese biotechs are now originating groundbreaking treatments – including widely popular antibody-drug conjugates and cell therapies – resulting in a surge of high-value licensing deals with Western pharmaceutical companies for global development and commercialization.
- “What’s fueling this shift?” asks Dance. “Lower development costs and streamlined regulatory processes. These advantages help Chinese firms to innovate faster and more affordably, creating potentially attractive investment opportunities in drug development. Here, Dance cites Hansoh Pharmaceutical as a notable position that’s leading the charge.
- Turning to computing, China lags the U.S. but has forged a new path to competitiveness, highlights Dance. While U.S. export restrictions have slowed the nation’s access to cutting-edge semiconductors, the country is finding alternative ways to grow computing capacity.
- With an estimated 9 million software developers, China has leveraged sheer scale to innovate through a “shots-on-goal” approach, he points out. This strategy is already yielding results, as demonstrated by the portfolio’s large stake in Alibaba Group Holding, which Dance believes could continue to push the boundaries of computing power.
- “I have been closely tracking these transformative trends in electric power, biotech and computing within China,” Dance concludes. “I am genuinely excited about the opportunities that lie ahead and believe this innovation revolution could have material implications from an investment perspective.”
Featured Fund
Fidelity Advisor Emerging Markets Fund (FECMX)
Seeks capital appreciation.
Related insights
View all
Portfolio Manager Insights
China may be quietly redefining the rules of innovation
China is in the midst of an “innovation revolution,” with transformative trends unfolding in electric power, biotechnology and computing, says Fidelity’s John Dance.
Portfolio Manager Insights
Riding the burgeoning AI wave
Much like the internet boom of the late 1990s, the generative AI revolution is a technological mega-shift in the making, according to Fidelity’s Dan Kelley.
Portfolio Manager Insights
Why multinational companies look attractive to me
A weaker dollar, shifting trade policies, high interest rates and increased government spending in the eurozone present a favorable backdrop for U.S. multinational companies, says Fidelity’s John Sheehy.
For specific fund information such as standard performance and holdings, please go to the "Funds Managed" link on this page.
Investment decisions should be based on an individual’s own goals, time horizon, and tolerance for risk. Nothing in this content should be considered to be legal or tax advice, and you are encouraged to consult your own lawyer, accountant, or other advisor before making any financial decision. These materials are provided for informational purposes only and should not be used or construed as a recommendation of any security, sector, or investment strategy.
Fidelity does not provide legal or tax advice and the information provided herein is general in nature and should not be considered legal or tax advice. Consult with an attorney or a tax professional regarding your specific legal or tax situation.
Past performance and dividend rates are historical and do not guarantee future results.
Investing involves risk, including risk of loss.
Diversification does not ensure a profit or guarantee against loss.
Sector funds can be more volatile because of their narrow concentration in a specific industry. Growth stocks can perform differently from other types of stocks and the market as a whole and can be more volatile than other types of stocks. Value stocks can perform differently than other types of stocks and can continue to be undervalued by the market for long periods of time. • Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. • Foreign securities are subject to interest rate, currency exchange rate, economic, and political risks, all of which are magnified in emerging markets. • In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation, credit, and default risks for both issuers and counterparties. • Lower-quality bonds can be more volatile and have greater risk of default than higher-quality bonds. • Floating-rate loans may not be fully collateralized and therefore may decline significantly in value. • The municipal market is volatile and can be significantly affected by adverse tax, legislative, or political changes, and the financial condition of the issuers of municipal securities. • The securities of smaller, less well-known companies can be more volatile than those of larger companies. • The funds can invest in securities that may have a leveraging effect (such as derivatives and forward-settling securities) that may increase market exposure, magnify investment risks, and cause losses to be realized more quickly. • Leverage can magnify the impact of adverse issuer, political, regulatory, market, or economic developments on a company. In the event of bankruptcy, a company’s creditors take precedence over the company’s stockholders. Although the companies that the fund invests in may be highly leveraged, the fund itself does not use leverage as an investment strategy. Changes in real estate values or economic downturns can have a significant negative effect on issuers in the real estate industry. In the event of bankruptcy, a company’s creditors take precedence over the company’s stockholders. Third-party marks are the property of their respective owners; all other marks are the property of FMR LLC.
1083900.31
0BDAF59B6AD14C66BA94503C8FFDE303