Portfolio Manager Insights

China’s modernization engine is revving up

Emerging industries in China are reshaping global markets and presenting attractive investment opportunities, according to Fidelity’s Di Chen.

By: Di Chen
Updated: 6/8/2026
  • China is at the crossroads of innovation and growth, according to Fidelity Portfolio Manager Di Chen, who says the evolutionary pace of change in the Middle Kingdom – fueled by government strategy, human capital and industrial ecosystems – has cultivated a promising landscape for investors.
  • “The world is evolving rapidly and nowhere is this transformation more evident than in China, where cutting-edge technology and groundbreaking advancements in health care are leading the charge as the nation works to close the gap between need and availability,” says Chen, who manages Fidelity Advisor® Emerging Asia Fund.
  • In helming the regional equity strategy, Chen favors companies with strong, stable growth characteristics that, alongside sound risk management, can enhance the potential for long-term value creation.
  • China’s vast human capital is a major asset and a second key pillar, says Chen, who highlights the country’s immense pool of technical talent, including millions of scientists and engineers and roughly 3 million new engineering graduates every year. “This constant influx of expertise is the bedrock of innovation, driving progress at an unprecedented pace,” she explains.
  • Chen also points to another advantage in China’s thousands of industrial clusters – ecosystems where suppliers, manufacturers and innovators operate side by side to foster collaboration, efficiency and intense competition, while accelerating innovation.
  • Chen believes the convergence of these three key pillars is best exemplified in China’s health care sector. “The nation’s aging population, coupled with lifestyle factors like diet and stress, have exposed a significant gap between medical needs and available treatments, the latter of which is well below the global average,” she says. “This gap between need and availability creates what I consider a compelling prospect for investors.”
  • Specifically, she believes this disparity presents an opportunity in disguise, driven by a growing workforce of medical professionals – many with valuable experience gained abroad – who are contributing to the rapid commercialization of new drugs and devices.
  • Meanwhile, she also highlights the importance of regulatory reform in accelerated approvals. For instance, clinical trials that could take five years or longer in the U.S. might take only six months in China, according to Chen.
  • Among illustrative holdings in the portfolio as of April 30, 2026, Chen cites WuXi XDC as a company that has leveraged China’s unique environment to deliver groundbreaking solutions. She notes that the firm has recently strengthened its global leadership position as a contract research, development and manufacturing organization for the bioconjugates industry.
  • Chen says the fund’s stake in Zylox-Tonbridge Medical Technology, a prominent medical device firm and a leading player in peripheral and neurovascular interventional devices, reflects its strong track record of rolling out new products.
  • “I genuinely believe this isn’t just a narrative about progress – it’s a story of potential,” Chen concludes. “China is on the cusp of an innovation boom that could reshape global markets.”
Explore more on:
Active management Emerging Markets Equity

Related insights

View all
Portfolio Manager Insights
Unlocking the next era of efficiency in digital advertising
Fidelity’s Becky Baker explains why she favors companies building stronger digital advertising capabilities to accelerate revenue growth.
Portfolio Manager Insights
I see compelling investment potential in solar energy
Solar-related businesses, once considered a niche market, are now a driving force in the global economy amid increasing demand for energy, says Fidelity’s Preeti Sayana.
Portfolio Manager Insights
Fintech: Positioned for AI disruption
As AI adoption accelerates and macro conditions evolve, fintech businesses are likely to see both significant opportunity and disruption, says Fidelity’s Coby Powers.

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.

935097.130
7E248BCE667145D5A880A1AB1C59D816