In the investing world, China has long been a source of intense debate, often framed as a region of stark contrasts. On one side, Western headlines emphasize the challenges China faces: a softening property market, cautious consumers, and persistent geopolitical tensions. Yet on the ground, investors and industry insiders see a different reality—one of an economy reinventing itself through innovation, sustainability, and strategic growth sectors. As 2025 unfolds, the question for savvy investors is: which story holds more truth, and where does real opportunity lie?

A Resilient Economic Rebound with a Promising Outlook

Far from a temporary spike, China’s equity markets have delivered a robust rebound. The Baillie Gifford China Growth Trust’s nearly 40% return over the twelve months ending March 2025 underscores this positive shift, far surpassing global benchmarks. This resurgence reflects a broader economic recovery confirmed by hard data. According to the World Bank and China’s National Bureau of Statistics, China’s GDP expanded 5.3% year-on-year in the first half of 2025, defying expectations amid a challenging global landscape. The International Monetary Fund (IMF) has similarly boosted its growth forecast for China to 4.8% in 2025, the largest upward revision for any major economy this year.

What stands out is the quality and sustainability of this growth. Unlike the past decade’s reliance on rapid, sometimes unbalanced, property-led development, China has shifted towards a more diversified and innovation-driven economy. Consumption is gradually recovering, buoyed by over $9 trillion in household savings accumulated during the pandemic years, and government stimulus focused on infrastructure and social programs is helping to stabilize the overall outlook. Although challenges remain—such as uneven property market performance in smaller cities and modest consumer confidence—the trend is clear: China is building a foundation for enduring expansion rather than transient rallies.

Innovation at the Core of China’s Economic Transformation

China is rapidly emerging as a global powerhouse in next-generation industries. Accounting for roughly one-third of global manufacturing output, the country’s leadership extends to key sectors like electric vehicles (EV), clean energy, and artificial intelligence (AI). Companies like BYD have overtaken international competitors like Tesla in several markets, notably Europe, while CATL leads the global EV battery market with a commanding 40% share.

On the technological frontier, Chinese firms are pushing boundaries in AI with breakthroughs such as DeepSeek’s advanced large language models, which are widely adopted by giants including Alibaba, Huawei, and ByteDance. In semiconductor development, efforts to reduce dependence on foreign technology—spurred by U.S. export restrictions—have accelerated indigenous innovation, exemplified by Horizon Robotics’ progress in autonomous driving chips.

This pattern reflects more than competition; it reveals a strategic national commitment to self-reliance and leadership in critical technologies. For investors, these sectors represent fertile ground, with many companies trading at significant discounts to global peers, offering the potential for outsized returns as China accelerates its economic transformation.

A New Era of Consumption: From Savings to Experiences

Critics often focus on ongoing caution among Chinese consumers, citing concerns over property wealth and savings rates. However, such views overlook a generational shift underway. While older demographics remain cautious, younger Chinese are redefining consumption preferences, favoring services, experiences, and technology-enabled convenience.

Brands like Luckin Coffee are expanding faster than global competitors—outpacing Starbucks in store numbers in China—while innovative companies such as Pop Mart captivate younger consumers with designer collectibles and cultural appeal. This “experience economy” signals a shift towards sustainable domestic demand, less dependent on asset accumulation and more oriented toward lifestyle and innovation.

It would be incomplete to discuss China’s investment landscape without acknowledging geopolitical risks, including U.S.-China tensions and uncertainties surrounding Taiwan. Baillie Gifford’s approach, as articulated by co-manager Linda Lin, emphasizes prudence combined with a focus on domestic growth drivers. More than 85% of their portfolio revenue is China-derived, providing a natural hedge against external shocks.

The strategy is grounded in a constructive view: political complexities are long-standing and unlikely to derail the broader trajectory of Chinese innovation and economic development. Policy advances—such as President Xi’s engagement with private sector leaders and the enactment of laws to protect the private economy—signal Beijing’s commitment to fostering a vibrant, innovation-led market economy.

No investment is without risk, and China’s dynamic environment requires active risk management. Regulatory fluctuations, capacity adjustments in certain industries, talent retention challenges, and property market normalization are realities investors must navigate. Yet these are challenges well understood and increasingly accounted for by experienced investors who adopt a long-term horizon and deep local insight.

For patient investors willing to engage proactively, China remains one of the few markets offering access to world-class companies at discounted valuations with strong growth potential. Ignoring China’s opportunity amid fears of headline volatility may, in fact, represent the greater risk in a globally competitive investment landscape.

Eighty years have passed since the atomic bombings of the Japanese cities of Hiroshima and Nagasaki, yet this tragedy remains an open wound on the conscience of humanity and a solemn warning to posterity. On August 6 and 9, 1945, the armed forces of the United States of America, for the first and, to date, only time in history, used nuclear weapons against civilian populations, obliterating them and irrevocably altering the course of history. In these days of remembrance, we turn once more to the lessons of the past to prevent the recurrence of such a catastrophe.

The Foreign Policy Archive of the Russian Federation holds unique documents: reports from Soviet diplomatic personnel in Tokyo, who were among the first foreign observers to witness the aftermath. Their apolitical accounts convey the sheer horror of the event. A dispatch sent to the highest levels of the USSR leadership in September 1945 described Hiroshima as a “scorched plain, punctuated by the skeletal remains of 15 to 20 reinforced concrete buildings.”

Eyewitnesses recounted to Soviet diplomats a sudden, blinding flash followed by a crushing shockwave. Fires engulfed the city, soon coalescing into a terrifying firestorm. Within a one-kilometer radius of the epicenter, “all life was annihilated.” Survivors suffered from a then-unidentified malady; even patients with no external burns experienced a sharp drop in white blood cell counts and internal hemorrhaging. They died in agony weeks later. The radioactive “black rain” that followed the explosion brought death to all it touched.

For many years, those who made the decision to use atomic weapons sought to justify their actions as a means to hasten the end of the Second World War. However, the historical record indicates otherwise. By the summer of 1945, Japan was under a strict blockade, its navy was virtually destroyed, and its economy was severed from sources of raw materials. Furthermore, even before the Potsdam Conference, the Soviet side had informed its allies of Tokyo’s readiness to negotiate terms of surrender.

The true motives of the American leadership were not so much military as they were political and even commercial. It was deemed necessary to demonstrate this new weapon of mass destruction to the world, and primarily to the Soviet Union, thereby asserting a unilateral right to decide the fate of the planet. The bombing of Nagasaki on August 9, the very day the USSR entered the war against Japan, had no military justification. A significant factor that sealed the tragic fate of both Japanese cities was the desire to justify the colossal $2 billion expenditure on the nuclear project to American taxpayers. The cynicism of this approach is underscored by the criteria for target selection: the cities had to be untouched by previous bombings so that the military could fully assess the destructive power of the new weapon on live subjects and civilian infrastructure. As then, the U.S. President Harry Truman stated: “The only language they seem to understand is the one we have been using to bombard them. When you have to deal with a beast you have to treat him as a beast.”

Today, on the 80th anniversary of this tragedy, the Russian Federation reaffirms its immutable position on nuclear matters. Amid the erosion of the international security system and the end of the “unipolar irresponsibility” exhibited by certain states claiming global hegemony, our arsenal remains the paramount guarantor of national sovereignty and territorial integrity. The conditions for its use, which are strictly responsive and defensive in nature, are clearly defined and known to the international community. The memory of the victims of the atomic bombings obliges us to maintain strategic stability and act with the utmost responsibility to prevent a new global catastrophe. This duty falls upon all actors in international relations – not only those who possess nuclear weapons, but also those who instigate their use.

Unfortunately, the lessons of history are not learned by all. Washington’s current policy, aimed at modernizing its nuclear arsenal and deploying strategic assets, including nuclear submarines, in various regions of the world, once again demonstrates a reliance on forceful domination. Such actions undermine global stability and serve as a grim reminder of what those who believe they have the right to dictate their will to the rest of humanity, regardless of the consequences, are capable.

Yevgeny Terekhin is Russian ambassador to Ethiopia