Scottish Mortgage is Baillie Gifford's flagship investment trust (founded 1909, LSE ticker SMT), known for its maximalist growth style — long-term stakes in Tesla, Amazon and ASML plus bold allocations to private companies like SpaceX and ByteDance. It is the UK retail investor's flagship vehicle for global disruptive growth.
This piece says China's headline economy looks weak, but great companies still thrive. The fund sees world-beating EVs, batteries, and AI—now priced cheaply. Three picks: BYD (amazing tech but likely banned from selling cars in the US), CATL (makes 40% of the world’s EV batteries, now adding storage), and Meituan (drones deliver coffee on the Great Wall, 800 million users).
Linda Lin (Head of Baillie Gifford's China Equities Team) together with investment managers Tom Slater and Lawrence Burns discuss the structural opportunities beneath the surface of China's economic slowdown, arguing that Chinese companies remain globally leading in EV, batteries, robotics, and AI. Lin proposes that one cannot judge the Chinese market based solely on headlines — it is like "judging the quality of a restaurant's food by the weather outside the restaurant" — this judgment constitutes the most unique investment contra-recommendation of the entire piece.
Linda Lin believes that while China's economy faces overall difficulties, the ambition and innovation at the founder level cannot be obscured by macro data. She compares looking at China through headlines to "judging a restaurant from the weather outside," meaning that macro noise cannot reflect micro-level vitality.
Lin further emphasizes that the core question for the team is not "Is China good or bad?" but rather "Can we find exciting growth companies under the current backdrop?" She states bluntly: "This is why stock selection matters in targeted positioning." Supporting argument: China is setting the global pace in green technology, advanced manufacturing, robotics, and AI.
Lawrence Burns 指出，地缘政治和监管风险主要在个股层面评估，且已反映在定价中。基金假设比亚迪（BYD）不会在美国销售乘用车，理由直白：“不是因为产品没有吸引力——事实上，它们太过有吸引力，政治不允许。”欧洲的前景则因关税和政治阻力尚不明朗。
该判断的核心是，避开水中国股票并不能消除中国风险，因为苹果（Apple）和特斯拉（Tesla）等公司仍依赖中国既是消费市场也是制造中心。Burns 补充，直接持有中国资产可能提供“异常低价”——因为悲观情绪已经打进价格。苏格兰抵押贷款的中国配置已从2020年底的约24%降至约11%。
Tom Slater 断言，中国在消费行为上的许多变化，会在五年后出现在西方。他以亲身经历为例：“现在西方看到的一些东西，我们在五年前的上海就已经体验过。”具体证据包括扫码支付的全面普及和EV的高接受度。
Linda Lin 以美团（Meituan）为案例佐证：用户在长城偏远地段可下单冰拿铁，由无人机在五分钟内送达。美团去年服务超过8亿用户，自推出以来已完成超过100万次无人机配送。这种“数字+物理”的融合模式，被视为中国对全球消费行业变革的早期预览。
Burns believes the view that Chinese EVs are "cheaper but not technologically sophisticated" is outdated. BYD covers the low-price market with the ~£8,000 Seagull while launching the extreme version of the Yangwang U9 Xtreme — the world's fastest production car. The technological foundation lies in vertical integration: BYD "builds its own chips, its own motors, and its own batteries."
The Han L model features flash-charging technology that can deliver 400 km of range after just 5 minutes of charging. Behind this equation stands CATL (Contemporary Amperex Technology Co., Ltd.) : it held nearly 40% of the global EV battery market last year, and its batteries have been installed in over 24 million vehicles. Slater highlights CATL's manufacturing prowess, scale, and a unique culture — "the willingness to abandon last year's effective solution if a better one emerges this year." Future growth engines also include energy storage batteries for fixed stations and power grids.
Lin points out a systemic divergence between Chinese and U.S. AI paths. U.S. companies focus on developing Artificial General Intelligence (AGI) and frontier models, whereas Chinese developers prioritize practical deployment, often relying on open-source models for low-cost adaptation to boost efficiency in factories, schools, public services, and the broader economy.
Case one: Horizon Robotics. Lin first met founder Kai Yu during their time at Baidu and subsequently tracked the company for several years at the private stage before investing. She candidly notes: "Relationships open the door, but deep research determines whether we walk through it." Case two: ByteDance. Lin argues it may be China's strongest AI company, as it combines its proprietary models with a massive user base across domestic and international applications, creating a unique dual-moat of "model + distribution."
| Security | Guest's Stance | Key Data |
|---|---|---|
| 比亚迪（BYD） | Bullish on tech competitiveness, cautious on political risk | Seagull approx. £8,000; Han L adds 400km in 5 minutes; Yangwang U9 Xtreme is world's fastest production car |
| CATL（宁德时代） | Bullish on dual-drive from manufacturing and energy storage | ~40% global EV battery market share; batteries installed in >24 million vehicles |
| 美团（Meituan） | As a benchmark for digital life | >800 million users; >1 million drone deliveries |
| 地平线机器人（Horizon Robotics） | Bullish on long-term research value | Tracked Yu Kai since Baidu era; researched as a private company for years prior to investing |
| 字节跳动（ByteDance） | Strongest AI company in China | Own models + domestic/global application ecosystem; no specific revenue/user data provided |
| 苹果（Apple）、特斯拉（Tesla） | Risk alert: China risk cannot be eliminated by avoiding Chinese stocks | China is a key consumer market and manufacturing hub |
1. "Judging the quality of a dish by the weather outside the restaurant" (Linda Lin): Macro headlines are not worth excessive attention; micro evidence comes from founder ambition and innovation pace.
2. AI is advancing, but the endpoint of AGI is not urgent (Linda Lin): Chinese companies prioritize using low-cost open-source models to improve factories, schools, and public services. The indicator is not the number of parameters, but the actual deployment rate.
3. BYD is explicitly assumed not to sell passenger cars in the U.S. — because the product is "too attractive, politics won't allow it" (Lawrence Burns): The U.S. market has been priced at zero, the outlook for Europe remains unclear.
4. A company that simultaneously offers an affordable entry-level model (Seagull, approx. £8,000) and the world's fastest production car (Yangwang U9 Xtreme) (Burns): Technical value and cost advantage are not a binary choice; they can coexist.
5. A phenomenon seen in Shanghai five years ago is only now appearing in the West (Tom Slater): A falsifiable transmission time window (3–7 years), which can be used to anticipate consumer tech tracks.
6. CATL has a culture of "being willing to discard last year's proven solutions" (Tom Slater): The moat lies not only in scale but also in the ability to self-iterate on production processes.
7. Avoiding Chinese stocks cannot eliminate China risk (Burns): Apple and Tesla remain highly dependent on China as a dual node for manufacturing and consumption; stock selection is more effective than avoidance.
8. "Guanxi opens the door for us; deep research decides whether we walk through that door" (Linda Lin): Pre-investment relationships can shorten screening time, but the condition for disclaimers remains independent, deep fundamental research.