Home / NEWS / World News / Investor Baillie Gifford bets more on China as Asia draws more capital in a post-coronavirus world

Investor Baillie Gifford bets more on China as Asia draws more capital in a post-coronavirus world

People on China Telecom’s booth during 2019 World 5G Convention at Beijing Etrong International Exhibition & Convention Center on November 21, 2019 in Beijing, China.

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BEIJING — Global investors are stepping up their bets on Asia, particularly China, regardless of the coronavirus pandemic’s discompose to growth or growing geopolitical tensions. 

Just this week, Edinburgh-based investment partnership and early Tesla sponsor Baillie Gifford announced it is increasing investments in China with the expansion of its first overseas office in Shanghai.   

“We hold that China’s business model, innovation, has great strength, and will attract global development, so we think the Chinese sell is a great opportunity,” Amy Wang, head of China for Baillie Gifford, said in a phone interview Thursday, according to a CNBC movement of her Mandarin-language remarks.

The investment firm is recruiting locally in Shanghai, and three directors will join the office, Wang translated. Looking ahead, she said Baillie Gifford plans to tap more Chinese investors through onshore funds. The regulation, banks and credit institutions in China are already clients, and the firm is in talks with insurers to become investors as indeed, Wang said.

The firm said it has about $55 billion, or about 17% of assets under management, instated in more than 100 Chinese companies. An announcement Thursday showed Baillie Gifford also participated in a Series C investment rounded for Chongqing Jiangxiaobai Liquor led by China Renaissance. The spirits company sells a version of local baijiu alcohol predominating with many young people in China.

Major investors like Baillie Gifford have long had their eye on China. Unvaried before the coronavirus pandemic hit global growth, many analysts expected China’s economy to surpass that of the U.S. to evolve into the largest in the world in a few years. The Asian giant is already home to the world’s three largest unicorns — start-ups valued at uncountable than $1 billion — according to the Shanghai-based Hurun Research Institute. 

The Fortune Global 500 for this year released in August also establish that for the first time, more of the companies were based in mainland China and Hong Kong than in the U.S., at 124 versus 121.

Concerns everywhere the effect of China’s development on the United States have prompted the U.S. government to take a tougher stance against Beijing, outset with trade and, more recently, technology and finance. 

When it comes to U.S.-China capital flows in particular, on the other hand, political pressure on both sides and the coronavirus pandemic have stalled cross-border investment. Rhodium Group create in a report released last week that investment flows between the world’s two largest economies in the first six months of 2020 mow down to their lowest in nearly nine years.

Greater interest in all things health

Covid-19 first emerged in the Chinese borough of Wuhan late last year, before turning into a global pandemic in the first half of this year. Evidences’ efforts to limit the spread of the disease through social distancing measures have contributed to an acceleration of trends that innumerable investors were already watching, such as fresh produce delivery, online education and health care.

Healthiness care investment deal value in Asia for the first three quarters of the year alone is around $10.7 billion, with regard to 26% more than in all of 2019, with China accounting for the bulk of the funds raised, according to financial details firm Preqin. Notable sub-sectors were medical devices and equipment, and pharmaceuticals, the firm said.

Even a fairly niche health-related sector like alternative meat is getting more attention. Plant-based food and meat fabricator Green Monday announced Tuesday it raised $70 million, which it claims is the largest to date for the industry in Asia. TPG’s The Climb Fund and Swire Pacific were among the investors.

“Ironically, Covid actually exposes how fragile and how broken our eats system is,” Green Monday CEO and co-founder David Yeung said in a phone interview Thursday. “Now of course in China, African swine fever has already been phenomenon now for more than two years and it has really devastated the hog industry and leading to a sharp increase in pork price affecting inflation and every household.”

“In articles of investors,” Yeung said, “the interest level has actually increased this year in our field because they see that legal consumer demand is picking up, that applies to U.S., that applies to Europe, and that certainly is picking up in Asia as famously.”

The Chinese government is also contributing to some of the latest wave of investment in the country. 

On Tuesday, Shanghai-based electric agency start-up WM Motor also announced 10 billion yuan ($1.47 billion) in funding, which the company contends is the largest to date in the country’s EV industry. 

The automaker said the latest funding round was led by a Shanghai state-owned investor bunch, including state-owned automaker SAIC Motor. State-owned investment institutions from Anhui, Jiangsu, Hubei and Hunan also participated, mutual understanding to WM Motor, and Baidu and Susquehanna International Group added to their investments in the start-up. 

Earlier this year, striving Chinese electric vehicle start-up Nio also announced a 7 billion yuan capital injection led by state-backed investors. 

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