China Wins the Long Game
Josh Dávila@allmodelsrwrong
+0.3%
since Nov 3
The idea
I believe China wins the long game over the next decade or two, so this basket is built to hold through the noise. It owns China's big consumer and tech platforms, broad funds for ballast and access to names that don't trade here, and the industries China is pulling ahead in: EVs and self-driving, batteries and solar, and biotech. No single stock is a huge bet on its own, and I keep some cash on hand to add when the sector sells off. I'd rethink it if the structural trend itself broke, not just a rough quarter.
What it owns
- These companies operate the shopping, search, travel and entertainment services that serve China's population and reach consumers worldwide. · Alibaba GroupIt operates China's largest e-commerce platform and a leading cloud business with AI models finding international partners., PDD HoldingsIt runs Pinduoduo in China and Temu globally, making it a direct test of whether Chinese companies can win shoppers worldwide despite trade barriers., Trip.com GroupIt books travel for Chinese and Asian travelers, rising as a wealthier China travels more domestically and internationally., NetEaseIt develops games that find large audiences worldwide, demonstrating that Chinese companies can succeed in global entertainment., BaiduIt leads China's search market and operates Apollo Go, one of the world's largest robotaxi fleets, linking the take to AI and autonomous driving., JD.comIt owns its warehouses and delivery network, benefiting as Chinese households shift spending online over the coming decade., Yum ChinaIt operates KFC and Pizza Hut across China, providing a steady gauge of everyday consumer spending in the country.35%
- These funds spread exposure across hundreds of Chinese companies, including major winners like BYD, CATL and Tencent that trade only outside the US. · iShares MSCI China ETFIt holds the entire Chinese stock market, including major companies unavailable on US exchanges, and steadies the take when individual stocks move sharply., Global X MSCI China Consumer Discretionary ETFIt holds Chinese consumer companies including BYD, which sells electric vehicles at home and abroad but trades only outside the US., KraneShares CSI China Internet ETFIt holds China's internet leaders like Tencent, which aren't available for direct purchase on US exchanges.22%
- China already builds most of the world's electric vehicles and leads in autonomous driving sensors and software. · Li AutoIt sells family electric and extended-range vehicles as one of China's established EV makers competing against Western brands., XPengIt emphasizes self-driving software as a core capability, positioning China to lead in autonomous vehicle technology., Hesai GroupIt makes lidar sensors used by self-driving vehicles and holds the majority of the global robotaxi lidar market., NIOIt pioneered battery-swap stations, a concept that only functions at China's scale, making it a higher-risk position within the EV group., Pony AIIt builds robotaxis in China and internationally, betting that China scales driverless rides first, though this is sized small due to execution risk.15%
- China manufactures most of the world's solar panels and battery cells that power the global energy transition. · Global X Lithium & Battery Tech ETFIt holds lithium miners and battery makers worldwide, tracking China's dominant share of the battery supply chain., JinkoSolar HoldingIt ranks among the world's largest solar panel makers and represents China's near-total dominance in solar manufacturing., KraneShares MSCI China Clean Technology ETFIt holds a diverse group of Chinese clean technology companies, many listed only in Hong Kong or mainland China., Canadian SolarIt manufactures most of its solar and battery storage equipment in China, capturing the same manufacturing advantage with a storage component.11%
- Chinese drug developers now create medicines that Western pharmaceutical companies license, signaling a shift in where innovation happens. · BeOne MedicinesIt sells cancer drugs globally, representing the clearest case of a Chinese pharmaceutical company competing successfully with Western peers., Legend BiotechIt co-developed a cell therapy with Johnson & Johnson, exemplifying the China-to-West partnerships the take pursues., Zai LabIt licenses drugs into China and develops its own pipeline, representing a smaller and riskier bet on Chinese biotech advancement.9%
- Cash8%