June 6, 2025 • 29 mins
Fidelity International’s Dale Nicholls joins this week’s Merryn Talks Money to discuss the Asian giant as a viable place to park your money. He explains China is now one the most innovative economies in the world. Its research and development spend is up forty-fold since 2000, and you can see the results in its clear leadership in electric vehicles, in battery storage, renewable energy infrastructure and increasingly artificial intelligence.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, Radio News. Welcome to Merren Trogs Money,
the podcast in which people who know the markets explain
the markets. I'm Maren Sum's that Web. This week I'm
(00:24):
speaking with Dale Nichols, portfolio manager of the Fidelity China
Special Situations Trust. As we have discussed many times this
year already on this show, the spell around American exceptionalism
appears to have broken. Investors are looking elsewhere for places
to park their money, and one of those places looks
like China. So we thought it'd be a good idea
to get on a China expert, which Dale is, get
(00:45):
his insights on what he's saying on the ground, see
what he makes for the various policy measures in place,
think tariffs, and what companies he thinks have the greatest
upside potential. Dale. Welcome to Merren Dorogs Money.
Speaker 2 (00:55):
Thanks Brian, great to be here.
Speaker 1 (00:57):
Okay, China is such a big topic as almost impossible
to know where to start. I suppose that the first
thing says that very few people are really invested in
China in any significant way. It's a very small part
of the World Index. It's percentage of the World Index
in general. Nowhere near matches its share of GDP. So what,
(01:17):
we're about twenty percent of global GDP and what three
percent of the indices?
Speaker 2 (01:23):
Yeah around there.
Speaker 1 (01:24):
Yeah, So that's a huge mismatch. And most people will
look at that and say, well, that makes a lot
of sense because China is more or less uninvestable for
an institutional investor and retail investors to tear clear of it.
And if you look at the news over the last week,
you think to yourself, well, that kind of makes sense.
So politically, you've got China in the US now really
(01:46):
involved in a fairly nasty row over trade, everyone accusing
everyone else of violating, seriously violating, said China absolutely violating,
totally violating, says Trump. And then you had the US
Defense Secretary out the other day saying that China poses
is real, that it could be imminent. You look at
the polls and you see that, depending on who you
listen to, between thirty five and forty percent of Americans
(02:08):
class China as an enemy. And so you look at
that and you think, well, for starters, given that political background,
ignoring everything else, given that political background, when earth would
I put money into China. So let's start there. How
bad do you see that political conflict moment?
Speaker 2 (02:26):
Yeah, if we're talking about the political element, I think
you're focusing more on the geopolitical side. And there's no
question that you know, this friction that we've seen between
China and the US is going to be with us
for a long time. It's sort of a natural part
I think of sort of China's rise. So I think that's,
you know, that something we're going to have to have
to deal with. I do feel that people have sort
(02:48):
of becoming more comfortable with that.
Speaker 1 (02:51):
So let's just go right back when you say it's
a natural part of China's rise, what do you mean
that that economic challenge to the US will naturally cause
geopligical conflict.
Speaker 2 (03:02):
Absolutely. What's often missed in a discussion where we talk
about China's competitiveness is the element of scale. You know,
obviously a huge population, a lot of companies leveraging that
domestic population, taking that scale off shore, so the companies
are extremely competitive. It's obviously not just scale we're going
to talk about china competitiveness. We shouldn't also ignore the
fact that companies in China have basically to compound at
(03:25):
R and d spend at about twenty percent for the
last decade, So I think that's that's a big part
of the story. But I do feel that the scale
element is often understated. No, we shouldn't be surprised. I
think that China is so competitive in evs when they're
producing sixty per seventy percent of the world's evs, and
obviously the share of the supply chain, you know, more
up upstream is even higher. So you know, I think
(03:50):
that's that's sort of an important backdrop to keep in mind.
Speaker 1 (03:55):
Yeah, and we'll come back to all that kind of thing.
I just want to keep it for the first bet
right heavily high level. Exactly. It does it concern you
that the Americans American administration is now talking in clear
terms of you know, conflict and threat and enemy and
all these words that, added to the endless tariff difficulties
(04:20):
make it make it feel like a you know, stim
that it has been a non confrontational relationship for the
last twenty years, but now it really does feel kind
of dirty.
Speaker 2 (04:30):
Yeah, But I think at the same time, there's a
recognition of just how interconnected the systems are. Having scored
percent come out and say there's not going to be decoupling.
There's a recognition of just how interwoven the economies are.
China's producing thirty percent of the world's goods. You know.
It's it's you can't just decouple. The impact is too great.
(04:52):
So I expect there's going to be friction, There's going
to be you know, high level of competition, but I
think at the same time as a recognition that both
both are going to develop.
Speaker 1 (05:02):
And where do you see these trade talks ending out?
Then where do you think we'll settle?
Speaker 2 (05:06):
We'll see on how you know, I would expect you know,
I would expect you know, you're probably going to see
cart levels towards Chine if I had to guess, probably
around the thirty percent level, but it'll probably vary. Bisector. Yeah,
I wouldn't be surprised if I had. If I was
a betting man, i'd I'd say that's probably where you
know things end up.
Speaker 1 (05:26):
You are a betting man.
Speaker 2 (05:27):
Those fund management is right, right, But I do think
it's again it's you know, it's important to keep things
in context. First of all, you know, I invest in companies.
I'm sort of evaluating things, you know, at the stock level.
I do feel, you know, from a market's perspective and
as a bottom up sock picker, it often gets overstated.
If you look at if you look at US sales
(05:48):
as a percentage of total revenues of MSCI China, we're
talking at about three percent, So you know, it's not
huge exposure in terms of the companies. The domestic market
is just it's just you know, so much, so much
more important to the company. Obviously, you know, with tariffs,
there's going to be a greater economic impact. You know,
the export sector is still significant, but I do feel
it's often you know, sort of overstated. I think it's
(06:10):
also you know, important to keep in mind that you know,
Chinese companies have obviously dealt with tariffs before they come
through one point zero and the first sort of you know,
the tariffs that are implemented, China you know, continued to
gain global market share through that. So I think, you know,
and again this is a reflected mind discussions with companies
as well. The ones that do have exposures to the
(06:31):
US are pretty well prepared. And you know, as someone
who looks beyond China as an investor as well, if
there's a you know, if there's a group of companies
that I would sort of rely on for adaptability, resilience,
et cetera, would probably be the Chinese group of companies
to come through this. Another thing that you know is
I think perhaps underappreciated and a lot of sectors, the
(06:52):
whole supply chain is is is Chinese is Chinese companies.
So you know, in those cases when we talk to companies,
no one worried about market share loss, you know, through terrorists.
The discussion all comes down to what happens around price elysicity,
What happens to volumes when prices go up thirty forty percent.
That's this type of discussion, and obviously, you know there
(07:14):
a lot of them are thinking about, you know, if
they were to you know, you know, invest in us,
what would that involve. And it's a tough decision for
them because a lot of a lot of the time
there is no supply chain, so they're starting a very
low level. It's going to take years, and you know,
there's a good chance the political environment might be different
by the time that capacity comes online. So that's sort
(07:35):
of the that's sort of the you know, the discussions
that we're having the companies at the company.
Speaker 1 (07:39):
Level, and outside that the macro background involving the terriffts,
et cetera. The macro situation in China, we read a
lot about the dunning, a high debt level, the aging
population and income and wealth inequality, property downturn, property downtime
being the big one, of course, but all those elements
(08:00):
areas a problem, are they for the listed companies in China?
Speaker 2 (08:05):
Sure? Obviously the economic backdrop is important. Again, I think
it's important to keep things in context. You know, we're
still talking about five percent growth in a global context.
It's not that it's not that bad, and I think
it's you know, looking forward, it's fair to assume that,
you know, the consumption part of that grows faster. So
you know, it's not you know, it's not a it's
(08:26):
not a it's not a particularly bad environment. You touched
on property, you know, it's definitely been a significant drag
for the economy over over the past few years. You know,
my senses that where we're definitely past the worst part
of that adjustment. I'm particularly focused on, you know, the
property market is definitely not going back to the head
(08:47):
of years of you know, of huge growth. I'm very
focused on what's happening at property prices because I think
that's a key factor behind the mindset of the consumer.
And you know, the consumer has definitely underspent through COVID.
Post COVID, we've had a significant increase in deposits, tumber
(09:07):
confidence is low, so you know, I'm very focused on that.
But actions have been taken. You know, you need to
keep in mind that there was a period of significant
property tightening that's mostly unwound now, but there's still there's
still you know, things like christ caps and that sort
of thing in certain areas. So you've seen significant action
to support the property sector, but I expect there's there's
(09:28):
definitely more to come. I do feel, you know, particularly
from September last year, as a greater recognition amongst policymakers
of just what a drag that has been. And we're
starting to see signs of stabilization. So, you know, looking
at that price element, if you look at first tier
cities in I think six of the last eight months,
you've had price increases, not the loss, and there's signs
(09:49):
of stabilization in the primary market there as well, So
you know, I think it's you know, we're sort of
on track at some point, but you're on your prices
to improve, and once that stabilization continues, you have to
think that there's there's more potential for you know, that
very sort of low levels of consumption to to start
to improve.
Speaker 1 (10:09):
Okay, so this this is the sorry carry on.
Speaker 2 (10:11):
And I was just going to finish the point on property.
I mean, as I said, that's been a major drag.
The peak of the drag is probably this year as well.
And again it will still be a drag I expect,
but it will be less than it has been has
been in the past. So you know, I think it
is a pretty good case for things to to slowly improve.
(10:33):
And you know, again we get the sense of the
government is very much focused on on driving that you know,
they're looking at the potential drag that that traffs can
be and I think, you know, there's there's you can
rest assured that there's going to be there's going to
be more coming.
Speaker 1 (10:47):
Although we have heard, for we do here a year
after year after year that the Chinese government is very
very focused on shifting the Chinese economy away from being
a pure export driven model towards being more of a
consumer model, and we do hear this constantly and we
don't necessarily see it happening. There's an awful lot of
wish for thinking and not necessarily the big macro move
that everyone is after.
Speaker 2 (11:08):
True, I mean, we haven't seen the sort of you know,
post COVID stimulus that you've seen in a lot of
the West. But you know, again, the sense we have
from listening to the policy makers is an increasing awareness
of the need to do more, and I think we
see we will see more to come. And again I
think that property element is important. And the fact that
(11:31):
we're seeing things start to say but stabilize, I think
is is a good positive sign.
Speaker 1 (11:37):
Let's talk then a bit about the market. I mean,
the long term performance of the Chinese starle market. If
you look at MSc China is pretty awful, really and
you've had a slightly better year this year, but nonetheless
not great. And partly the things that we've been talking about,
the macro stuff, but also the fact that you've got
a very large section of the market that is state
(11:59):
owned enterprises, that you have relatively low margins, that you
have a sense that an awful lot of Chinese companies
are more focused on market share than profits, that possibly
their operations can be more driven by state ambition than
by corporate ambition, and those are some of the elements
that maybe have led it to underperform and still be
(12:20):
remarkably cheap, but cheap relative to global markets. Cheap practice
for US, the.
Speaker 2 (12:25):
State owned portion of the market has has declined. Yeah,
so there's been a real market change in the makeup
of the market over the past five to ten years.
That so proportion has definitely fallen. You know, it's no
longer market that is completely dominated by energy, banks and telcos.
(12:48):
The private sectors can become a much bigger part of
the market but important the biggest driver of the economy
as well, the driver of growth, biggest driver of employment, etc.
And you know, it's worth noting we've had the creation
of of whole new sectors. If you look at what's
happened in the auto space with the evs, you know
that we've touched on this is obviously mostly driven by
(13:10):
by private companies. So that's where the majority of the
focus is for us, and we don't ignore the sos,
particularly when the obviously evaluation is a is a big factor.
So you know, there can be good opportunities we did
in the SOS, but gain if we're looking out sort
of five to ten years, it's the private companies that
are going to be are going to be driving and.
Speaker 1 (13:31):
Driving the growth, okay, and what might close up? Who's
going to come into this market? Who will the buyers be? Now?
Are you seeing shift in the institutional mindset? That's the
institutional investors are looking at their allocations and saying, well, way,
we're exposed to the US. We've got this giant economy
over there, We've slightly been alerted to by the teriff argument,
and maybe it's time to go above two three percent
in China because of course, an awful lot of institution
investors and global funds, they are underweight even the index
(13:55):
allocation to.
Speaker 2 (13:55):
China, aren't they absolutely Well, first of all, you know,
you would hope it's the domestics, So you know, you
have the big domestic institutions that are you know, clearly
investing in the market. But you would hope that you know,
the individuals you can come back to the market. We've
seen an increase in the number of brokerage accounts and
(14:16):
that sort of thing last year or so, so hopefully
that would be a driver you know, on on the
you know, the more international stage. As we've talked about,
we're starting from a very low point. I think, you know,
sort of commentary out of the US that you know,
we're not to coupling. I think there's a recognition that
China is investable. If we think about where weights are,
(14:37):
you know, there's good potential you know, for that to
move up. You know, we talked about that discount relative
to the US and what's driven that if you think
about things like, you know, policy certainty and things like that.
You know, obviously, you know, we've been through a very
volatile period in terms of policy, you know, coming out
(14:58):
from the US. You know, China is on the fifth
year of its fourteen five year plan, so they're pretty
you know, there's a fair bit of certainty about you know,
so generally where policy is going, you know, over time,
if they're not to coupling, hopefully there's a recognition of
that stability that can start to bring and what is
a pretty still a pretty significant discount back.
Speaker 1 (15:21):
Yeah, let's talk then about the kind of companies that
you're looking for. I mean, if it's obvious to say
that the Chinese market should be something of a stock
picker's paradise, right, that it's not necessarily a market that
the passive investors should go for again, because you might
get poked with a whole portfolio full of of sees
et cetera. So, if you are an active manager going
into this market, do you that, I'm slightly assuming you
(15:41):
end up with a bias to med and small cap companies?
How do you choose?
Speaker 2 (15:46):
Where do you look ow do the work? Yeah, yeah, absolutely,
I completely agree with you that. You know, it's as
a bottom up stock picker, you've got, you know, a
huge range of toysture. You've got massive change on the ground,
the winners and looters losers are being a being sort
of separated all the time as a process of consolidation
that's happening. And yet you know, you have this market
(16:06):
that's driven by macro headlines, geo political headlines, et cetera.
So a little them up stock picker, it's you know,
it's very good. You know, we spread the net very
wide in terms of what we're looking for, but you know,
I do tend to focus on those areas of the
economy that we know are going to be bigger parts
if you're looking out sort of five to ten years.
I talked about, you know, the consumer. I think that
(16:28):
particularly just in sort of the mass area, that's it's
I think the investment set up is really strong. You know,
you've got companies that have been sold over over the
concerns the consumer has been weak. But as I've mentioned,
we've got a consumer that has underspent for many years.
As a result of that, they've got very strong balance
sheets and stimulus is coming. And I've trust that with
(16:50):
perhaps other markets in the West where you may have
a consumer that's more extended and austerity is coming. So
I think, you know, the setup for the consumer is
is actually quite good. Would you know. I focus on
areas like some of the staples areas you look at,
you know, you talked about increased competition, the lig an area,
like beer, and I think competitive intensity has definitely come
(17:11):
down natural premialization. They're getting pricing. They've done a lot
in terms of rationalizing factories and things like that, and
that capital return story is very live and well. Sports
where you've got look at that spend per capita on
sportswear in China, it's a fraction of what we see
in the West.
Speaker 1 (17:28):
Well, let me ask you before before you move on
to anything else about the luxury goods sector in China,
and that one of the things we've been reading about
a lot recently, and the decline of interest in Chinese
consumer is in the big Western luxury brands and they
are shift back to more more of a sense of
domestic luxury.
Speaker 2 (17:45):
You're seeing that, yeah, I mean, if you're talking true luxury,
I mean this is a space globally that's dominated by
the European. Yeah. So you know, if you were to
focus on luxury in China, there's not many ways to
play it. I'd say, you know, this strongest luxury brand
in China is probably Malti as the top by Jo Brandy.
(18:06):
So you know, it's not a it's not a big
space if you focus purely on luxury. Obviously there's there's
there's some upper market brands, but you know, the real
opportunity I think is much more in mass nice market.
Speaker 1 (18:20):
Okay, And what about the and I suppose when we
look at China at the moment, we tend to see innovation,
don't we. We see the biggest producers of the evs.
We see this extraordinary progress in in AI, the catchy,
the unexpected catch up, and we see the huge leadership
in solar panels and renewable energy. And also of course
they're a much faster shifted to using nuclear energy than
(18:43):
the rest of us. So we see this this this
ongoing innovation and the whole idea that even a few
years ago, people would be writing about how China with
China was all very well, but really they're just copying
and that story is over stunning innovation in China.
Speaker 2 (18:57):
Now absolutely true. Yeah, absolutely, it's something that we see daily.
I talk about how companies are investing and you're seeing
that coming through it just you know, improving competitiveness, which
is teating into priss and plow for companies, you know.
So yeah, I mean that's definitely a big trend. I
have a pretty big, big bet in the trust in industrials,
(19:17):
and there's still there's still you know, room for that
to play out. If you look at an area like robotics,
up until a few years years ago, the top four
players were all far you know, the top sort of
the big four. Now two of those are now local,
but there's still room to make to make share gains.
Speaker 1 (19:34):
Domestical what are those local what are those local robotics.
Speaker 2 (19:37):
Companies, companies like Stern and in events. You know, companies
that are that are pushing up into into that robotic space.
A lot of them, like an Inmates, is doing some
of the other components as well. You know, there's definitely
room to room to grow there. That whole ev chain
that we talked about is very exciting.
Speaker 1 (19:56):
They've got this great shift to high quality growth. One
of the problems that people have felt with that with
stock markets over the last four or five years, last decade,
maybe is it an awful lot of the growth takes
place off market before companies list. Right, So the real growth,
the real innovation, the real excitement is in private markets,
not public Do you feel that in China as well,
(20:18):
that maybe the listed stocks don't necessarily represent the extent
of the innovation in the economy. It's hard to get
real access.
Speaker 2 (20:28):
Yeah, no, it's a very fair point that, you know,
I mean, globally, companies are coming to market later. You've
got some huge private companies. Luckily for us, we're quite
active in the private space as well.
Speaker 1 (20:40):
How it's a the trust of privates, so.
Speaker 2 (20:43):
It's just over ten percent.
Speaker 1 (20:45):
What else is in that how do you find those?
I mean that's even harder, right, finding finding a good
listed stock in thousands of listed companies is hard enough,
but going out and looking for private companies on the
ground in China, how do you do that?
Speaker 2 (20:58):
Releverage our public team, So as our public team is
you know, sort of obviously focused on you know, the
public listeness doocs, but you know they can, you know,
they can look at the larger private companies as well.
But we have people that are purely focused on private
as well, and it's an area that we've expanded out.
The majority of potential opportunities that we're finding now is proprietary.
(21:23):
So years back were probably more reliant on the banks,
but you know, these days, you know, it's very much
the proprietary opportunity that we're that we're seeing, you know,
by tents we added to you know, in the secondary
market last year we think at a single digit type
of valuation and that's where the international business losing money.
(21:43):
So you know, the TikTok part of the story is
actually a drag on earners and very much we feel
not factored into into the overall story. And you know,
again I feel it's probably another area where the US
exposure is somewhat overstated. I mean it's not insignificant. They've
got one hundred and seventy million or so users in
(22:04):
the US, which is about half of pation. But you
know TikTok has have a two billion users.
Speaker 1 (22:09):
And how do you exit a position like that? I mean,
you're hoping that the IPO market will come back and
you will be able to exit that in the public markets.
Speaker 2 (22:19):
Yeah, IPO will be the main form of exit. You know,
there could be potential trade sales and that sort of
thing in the future, but you know, you've got to
assume that that, you know, IPO is going to be
the main, you know, the main way to exit these positions.
Speaker 1 (22:37):
Well, a lot of the things that you've been talking about,
it sounds like they might give some hope to those
worrying about how countries such as China will cope with
their demographic disasters or somedly like them disasters. I mean,
China is one of the first places to start think
in actual falls in population, right, which is quite a thing.
(22:59):
So you see that unfolding, I mean it is extraordinary
and that you know, we've never really I was writing
the other day about how the world is through effectively
peak humanity at the moment, we may already have hit it.
Given out how incorrect most forecasts of fertility are, we
may already be at peak humanity, which is an extraordinary
thing for us for anyway our living and for the
first time ever positively topping out of the global population.
(23:21):
And you can see it in action in some European countries.
You can see it in action in Japan, and you're
beginning to see it in action in China.
Speaker 2 (23:29):
What happens?
Speaker 1 (23:29):
How does this work? I mean, no one knows that works, right,
because we haven't seen it before. But lots of the
innovations that you've been discussing feel like they would feed
very well into a declining population or certainly a heavily
aging and declining population.
Speaker 2 (23:42):
Yeah, I mean it's a challenge. And as you say,
it's not just China. Obviously, Europe, Japan, you know, clearly
clearly have these challenges. I don't feel like it's you know,
something that sort of you know, really changes the outlook
for a lot of stocks. If we're sort of looking
out about to ten years, you know, in a big
(24:02):
one for a lot of companies, and there are things
that China can do obviously, you know, it's the potential,
you know, raising of the retirement age. There's still the
urbanization story in China. There's still you know, something that's
definitely going to play out. You know, you would have
heard the potential for things like Houko reform, the household
registration reform still got you know, two hundred and eighty
(24:25):
million or so workers that aren't afforded the same rights
as others. So still a lot of room to you know,
address these challenges, and I think that can be you know,
definitely supports for consumption as well.
Speaker 1 (24:38):
One of the things that is really required for a
big expansion of the consumer economy, and China is in
a bigger welfare state.
Speaker 2 (24:45):
Right.
Speaker 1 (24:45):
One of the reasons why it's very hard for being
able to spend and feel confident in spending, particularly in
a declining population environment, is the lack of a real
safety net. So hotly you want to save as much
as you can if no one else is going to
take care of you. So surely that the the biggest step
forward to creating a consumer economy would be the creation
of a genuine, more all encompassing welfare state.
Speaker 2 (25:07):
Yeah, I think all encompassing is the right word. It's
it's there, but it needs to be you know, there's
room for it to be bolstered. And the things that
we've talked about about potential reform in the household registration
and that sort of thing, you know, it can be
boost to that. And I think you've got to assume
that those types of things are on the radar and
thinking about you can support the out look of the
consumer going forward.
Speaker 1 (25:28):
Okay, what would make you feel less optimistic about the
Chinese market? We've talked about all the reasons to be
optimistic about long term returns and the things that are
exciting particularly particularly innovation, etc. But what would make you worry?
Make you think ically, you know, maybe this is more
of a more of a trade and a long term investment,
(25:48):
which was is how a lot of people do see.
Speaker 2 (25:50):
The market, right. I think, you know what would make
me more negative? Obviously, you know what happens with property
as are set is key, so you know it's sort
of aging. Commitment to you know, continue to drive that
recovery would be a concern. I think also if we
saw you know, a ramp up in domestic regulation, that
would be that would be a concern obviously. You know,
(26:12):
we went through a period where we did see that
you know, pretty pretty significant ramp up in domestic regulation. Uh.
You know, we feel we're definitely you know, the focus
is much very clearly now on growth. But for whatever
reason we saw, i'd say regulation, you know, move strongly
in the other direction, that would be definitely be a
(26:33):
concern for us.
Speaker 1 (26:35):
On the flip side, what would make you want to
shout from rooftops, everyone get your money and now.
Speaker 2 (26:40):
It would just be a continuation of a sort of
steady recovery. No, I don't think I'd be that bullship.
You know, we sort of had you know, sort of
huge stimulus you know, infrastructure type packages of the past,
but you know, just sort of you know, increasing support
for the consumer, gradually roving consumer sentiment. And if we're
(27:03):
sort of you know, able to draw on some of
those savings and things and things gradually gradually recover, that
would be great. Obviously, a more stable global environment mm hmm,
that would do it for everybody that would It would
be nice to have.
Speaker 1 (27:18):
Pill tell us this, tell us the story of the
most exciting stock you've added recently.
Speaker 2 (27:23):
I would say it's in my top ten. But if
you look at like a company like her Side, you know, Lied,
they're extremely competitive in that space. And you know, obviously
you know, a very strong like a position in China,
but you know, going going off shore making sort of
you know big big wins globally as well, and you know,
(27:44):
I just it's hard to see how that competitive position,
you know, reverses and you know, let's face it, I mean,
Autonomous is really just getting going. So we're sort of
at the starting point.
Speaker 1 (27:55):
Last question, then, Belle, what are you reading at the moment?
Speaker 2 (27:59):
Is not investment related. It's a book called The Line
Tracker's Guide to Lives and the author, Boyd Barty, if
you've heard him talk, is a fantastic storyteller and they've
heard many of his of his stories, but hadn't read
the book yet, so I'm sort of working through that.
I highly recommend it. There's some great stories and I
(28:20):
think probably lessons for life in there as well.
Speaker 1 (28:23):
Brilliant. Thank you very much and thanks for joining us today.
That was fascinating.
Speaker 2 (28:27):
Thanks Marek, great to chat.
Speaker 1 (28:34):
Thanks for listening to this week's Marin Talks Money. If
you like our show, rate review and subscribe, wherever you
listen to podcasts and keep sending questions or comments to
Marryn Money at Bloomberg dot net. You can also follow
me and John on Twitter or x I'm at marins
w and John is John Underscore Stepic. This episode was
hosted by Me Maren Sunset Web. It was produced by
Someersardian and sound designed by Blake Maple's and special thanks
(28:57):
to Dale Nichols
Bloomberg Audio Studios, Podcasts, Radio News. Welcome to Merren Trogs Money,
the podcast in which people who know the markets explain
the markets. I'm Maren Sum's that Web. This week I'm
(00:24):
speaking with Dale Nichols, portfolio manager of the Fidelity China
Special Situations Trust. As we have discussed many times this
year already on this show, the spell around American exceptionalism
appears to have broken. Investors are looking elsewhere for places
to park their money, and one of those places looks
like China. So we thought it'd be a good idea
to get on a China expert, which Dale is, get
(00:45):
his insights on what he's saying on the ground, see
what he makes for the various policy measures in place,
think tariffs, and what companies he thinks have the greatest
upside potential. Dale. Welcome to Merren Dorogs Money.
Speaker 2 (00:55):
Thanks Brian, great to be here.
Speaker 1 (00:57):
Okay, China is such a big topic as almost impossible
to know where to start. I suppose that the first
thing says that very few people are really invested in
China in any significant way. It's a very small part
of the World Index. It's percentage of the World Index
in general. Nowhere near matches its share of GDP. So what,
(01:17):
we're about twenty percent of global GDP and what three
percent of the indices?
Speaker 2 (01:23):
Yeah around there.
Speaker 1 (01:24):
Yeah, So that's a huge mismatch. And most people will
look at that and say, well, that makes a lot
of sense because China is more or less uninvestable for
an institutional investor and retail investors to tear clear of it.
And if you look at the news over the last week,
you think to yourself, well, that kind of makes sense.
So politically, you've got China in the US now really
(01:46):
involved in a fairly nasty row over trade, everyone accusing
everyone else of violating, seriously violating, said China absolutely violating,
totally violating, says Trump. And then you had the US
Defense Secretary out the other day saying that China poses
is real, that it could be imminent. You look at
the polls and you see that, depending on who you
listen to, between thirty five and forty percent of Americans
(02:08):
class China as an enemy. And so you look at
that and you think, well, for starters, given that political background,
ignoring everything else, given that political background, when earth would
I put money into China. So let's start there. How
bad do you see that political conflict moment?
Speaker 2 (02:26):
Yeah, if we're talking about the political element, I think
you're focusing more on the geopolitical side. And there's no
question that you know, this friction that we've seen between
China and the US is going to be with us
for a long time. It's sort of a natural part
I think of sort of China's rise. So I think that's,
you know, that something we're going to have to have
to deal with. I do feel that people have sort
(02:48):
of becoming more comfortable with that.
Speaker 1 (02:51):
So let's just go right back when you say it's
a natural part of China's rise, what do you mean
that that economic challenge to the US will naturally cause
geopligical conflict.
Speaker 2 (03:02):
Absolutely. What's often missed in a discussion where we talk
about China's competitiveness is the element of scale. You know,
obviously a huge population, a lot of companies leveraging that
domestic population, taking that scale off shore, so the companies
are extremely competitive. It's obviously not just scale we're going
to talk about china competitiveness. We shouldn't also ignore the
fact that companies in China have basically to compound at
(03:25):
R and d spend at about twenty percent for the
last decade, So I think that's that's a big part
of the story. But I do feel that the scale
element is often understated. No, we shouldn't be surprised. I
think that China is so competitive in evs when they're
producing sixty per seventy percent of the world's evs, and
obviously the share of the supply chain, you know, more
up upstream is even higher. So you know, I think
(03:50):
that's that's sort of an important backdrop to keep in mind.
Speaker 1 (03:55):
Yeah, and we'll come back to all that kind of thing.
I just want to keep it for the first bet
right heavily high level. Exactly. It does it concern you
that the Americans American administration is now talking in clear
terms of you know, conflict and threat and enemy and
all these words that, added to the endless tariff difficulties
(04:20):
make it make it feel like a you know, stim
that it has been a non confrontational relationship for the
last twenty years, but now it really does feel kind
of dirty.
Speaker 2 (04:30):
Yeah, But I think at the same time, there's a
recognition of just how interconnected the systems are. Having scored
percent come out and say there's not going to be decoupling.
There's a recognition of just how interwoven the economies are.
China's producing thirty percent of the world's goods. You know.
It's it's you can't just decouple. The impact is too great.
(04:52):
So I expect there's going to be friction, There's going
to be you know, high level of competition, but I
think at the same time as a recognition that both
both are going to develop.
Speaker 1 (05:02):
And where do you see these trade talks ending out?
Then where do you think we'll settle?
Speaker 2 (05:06):
We'll see on how you know, I would expect you know,
I would expect you know, you're probably going to see
cart levels towards Chine if I had to guess, probably
around the thirty percent level, but it'll probably vary. Bisector. Yeah,
I wouldn't be surprised if I had. If I was
a betting man, i'd I'd say that's probably where you
know things end up.
Speaker 1 (05:26):
You are a betting man.
Speaker 2 (05:27):
Those fund management is right, right, But I do think
it's again it's you know, it's important to keep things
in context. First of all, you know, I invest in companies.
I'm sort of evaluating things, you know, at the stock level.
I do feel, you know, from a market's perspective and
as a bottom up sock picker, it often gets overstated.
If you look at if you look at US sales
(05:48):
as a percentage of total revenues of MSCI China, we're
talking at about three percent, So you know, it's not
huge exposure in terms of the companies. The domestic market
is just it's just you know, so much, so much
more important to the company. Obviously, you know, with tariffs,
there's going to be a greater economic impact. You know,
the export sector is still significant, but I do feel
it's often you know, sort of overstated. I think it's
(06:10):
also you know, important to keep in mind that you know,
Chinese companies have obviously dealt with tariffs before they come
through one point zero and the first sort of you know,
the tariffs that are implemented, China you know, continued to
gain global market share through that. So I think, you know,
and again this is a reflected mind discussions with companies
as well. The ones that do have exposures to the
(06:31):
US are pretty well prepared. And you know, as someone
who looks beyond China as an investor as well, if
there's a you know, if there's a group of companies
that I would sort of rely on for adaptability, resilience,
et cetera, would probably be the Chinese group of companies
to come through this. Another thing that you know is
I think perhaps underappreciated and a lot of sectors, the
(06:52):
whole supply chain is is is Chinese is Chinese companies.
So you know, in those cases when we talk to companies,
no one worried about market share loss, you know, through terrorists.
The discussion all comes down to what happens around price elysicity,
What happens to volumes when prices go up thirty forty percent.
That's this type of discussion, and obviously, you know there
(07:14):
a lot of them are thinking about, you know, if
they were to you know, you know, invest in us,
what would that involve. And it's a tough decision for
them because a lot of a lot of the time
there is no supply chain, so they're starting a very
low level. It's going to take years, and you know,
there's a good chance the political environment might be different
by the time that capacity comes online. So that's sort
(07:35):
of the that's sort of the you know, the discussions
that we're having the companies at the company.
Speaker 1 (07:39):
Level, and outside that the macro background involving the terriffts,
et cetera. The macro situation in China, we read a
lot about the dunning, a high debt level, the aging
population and income and wealth inequality, property downturn, property downtime
being the big one, of course, but all those elements
(08:00):
areas a problem, are they for the listed companies in China?
Speaker 2 (08:05):
Sure? Obviously the economic backdrop is important. Again, I think
it's important to keep things in context. You know, we're
still talking about five percent growth in a global context.
It's not that it's not that bad, and I think
it's you know, looking forward, it's fair to assume that,
you know, the consumption part of that grows faster. So
you know, it's not you know, it's not a it's
(08:26):
not a it's not a particularly bad environment. You touched
on property, you know, it's definitely been a significant drag
for the economy over over the past few years. You know,
my senses that where we're definitely past the worst part
of that adjustment. I'm particularly focused on, you know, the
property market is definitely not going back to the head
(08:47):
of years of you know, of huge growth. I'm very
focused on what's happening at property prices because I think
that's a key factor behind the mindset of the consumer.
And you know, the consumer has definitely underspent through COVID.
Post COVID, we've had a significant increase in deposits, tumber
(09:07):
confidence is low, so you know, I'm very focused on that.
But actions have been taken. You know, you need to
keep in mind that there was a period of significant
property tightening that's mostly unwound now, but there's still there's
still you know, things like christ caps and that sort
of thing in certain areas. So you've seen significant action
to support the property sector, but I expect there's there's
(09:28):
definitely more to come. I do feel, you know, particularly
from September last year, as a greater recognition amongst policymakers
of just what a drag that has been. And we're
starting to see signs of stabilization. So, you know, looking
at that price element, if you look at first tier
cities in I think six of the last eight months,
you've had price increases, not the loss, and there's signs
(09:49):
of stabilization in the primary market there as well, So
you know, I think it's you know, we're sort of
on track at some point, but you're on your prices
to improve, and once that stabilization continues, you have to
think that there's there's more potential for you know, that
very sort of low levels of consumption to to start
to improve.
Speaker 1 (10:09):
Okay, so this this is the sorry carry on.
Speaker 2 (10:11):
And I was just going to finish the point on property.
I mean, as I said, that's been a major drag.
The peak of the drag is probably this year as well.
And again it will still be a drag I expect,
but it will be less than it has been has
been in the past. So you know, I think it
is a pretty good case for things to to slowly improve.
(10:33):
And you know, again we get the sense of the
government is very much focused on on driving that you know,
they're looking at the potential drag that that traffs can
be and I think, you know, there's there's you can
rest assured that there's going to be there's going to
be more coming.
Speaker 1 (10:47):
Although we have heard, for we do here a year
after year after year that the Chinese government is very
very focused on shifting the Chinese economy away from being
a pure export driven model towards being more of a
consumer model, and we do hear this constantly and we
don't necessarily see it happening. There's an awful lot of
wish for thinking and not necessarily the big macro move
that everyone is after.
Speaker 2 (11:08):
True, I mean, we haven't seen the sort of you know,
post COVID stimulus that you've seen in a lot of
the West. But you know, again, the sense we have
from listening to the policy makers is an increasing awareness
of the need to do more, and I think we
see we will see more to come. And again I
think that property element is important. And the fact that
(11:31):
we're seeing things start to say but stabilize, I think
is is a good positive sign.
Speaker 1 (11:37):
Let's talk then a bit about the market. I mean,
the long term performance of the Chinese starle market. If
you look at MSc China is pretty awful, really and
you've had a slightly better year this year, but nonetheless
not great. And partly the things that we've been talking about,
the macro stuff, but also the fact that you've got
a very large section of the market that is state
(11:59):
owned enterprises, that you have relatively low margins, that you
have a sense that an awful lot of Chinese companies
are more focused on market share than profits, that possibly
their operations can be more driven by state ambition than
by corporate ambition, and those are some of the elements
that maybe have led it to underperform and still be
(12:20):
remarkably cheap, but cheap relative to global markets. Cheap practice
for US, the.
Speaker 2 (12:25):
State owned portion of the market has has declined. Yeah,
so there's been a real market change in the makeup
of the market over the past five to ten years.
That so proportion has definitely fallen. You know, it's no
longer market that is completely dominated by energy, banks and telcos.
(12:48):
The private sectors can become a much bigger part of
the market but important the biggest driver of the economy
as well, the driver of growth, biggest driver of employment, etc.
And you know, it's worth noting we've had the creation
of of whole new sectors. If you look at what's
happened in the auto space with the evs, you know
that we've touched on this is obviously mostly driven by
(13:10):
by private companies. So that's where the majority of the
focus is for us, and we don't ignore the sos,
particularly when the obviously evaluation is a is a big factor.
So you know, there can be good opportunities we did
in the SOS, but gain if we're looking out sort
of five to ten years, it's the private companies that
are going to be are going to be driving and.
Speaker 1 (13:31):
Driving the growth, okay, and what might close up? Who's
going to come into this market? Who will the buyers be? Now?
Are you seeing shift in the institutional mindset? That's the
institutional investors are looking at their allocations and saying, well, way,
we're exposed to the US. We've got this giant economy
over there, We've slightly been alerted to by the teriff argument,
and maybe it's time to go above two three percent
in China because of course, an awful lot of institution
investors and global funds, they are underweight even the index
(13:55):
allocation to.
Speaker 2 (13:55):
China, aren't they absolutely Well, first of all, you know,
you would hope it's the domestics, So you know, you
have the big domestic institutions that are you know, clearly
investing in the market. But you would hope that you know,
the individuals you can come back to the market. We've
seen an increase in the number of brokerage accounts and
(14:16):
that sort of thing last year or so, so hopefully
that would be a driver you know, on on the
you know, the more international stage. As we've talked about,
we're starting from a very low point. I think, you know,
sort of commentary out of the US that you know,
we're not to coupling. I think there's a recognition that
China is investable. If we think about where weights are,
(14:37):
you know, there's good potential you know, for that to
move up. You know, we talked about that discount relative
to the US and what's driven that if you think
about things like, you know, policy certainty and things like that.
You know, obviously, you know, we've been through a very
volatile period in terms of policy, you know, coming out
(14:58):
from the US. You know, China is on the fifth
year of its fourteen five year plan, so they're pretty
you know, there's a fair bit of certainty about you know,
so generally where policy is going, you know, over time,
if they're not to coupling, hopefully there's a recognition of
that stability that can start to bring and what is
a pretty still a pretty significant discount back.
Speaker 1 (15:21):
Yeah, let's talk then about the kind of companies that
you're looking for. I mean, if it's obvious to say
that the Chinese market should be something of a stock
picker's paradise, right, that it's not necessarily a market that
the passive investors should go for again, because you might
get poked with a whole portfolio full of of sees
et cetera. So, if you are an active manager going
into this market, do you that, I'm slightly assuming you
(15:41):
end up with a bias to med and small cap companies?
How do you choose?
Speaker 2 (15:46):
Where do you look ow do the work? Yeah, yeah, absolutely,
I completely agree with you that. You know, it's as
a bottom up stock picker, you've got, you know, a
huge range of toysture. You've got massive change on the ground,
the winners and looters losers are being a being sort
of separated all the time as a process of consolidation
that's happening. And yet you know, you have this market
(16:06):
that's driven by macro headlines, geo political headlines, et cetera.
So a little them up stock picker, it's you know,
it's very good. You know, we spread the net very
wide in terms of what we're looking for, but you know,
I do tend to focus on those areas of the
economy that we know are going to be bigger parts
if you're looking out sort of five to ten years.
I talked about, you know, the consumer. I think that
(16:28):
particularly just in sort of the mass area, that's it's
I think the investment set up is really strong. You know,
you've got companies that have been sold over over the
concerns the consumer has been weak. But as I've mentioned,
we've got a consumer that has underspent for many years.
As a result of that, they've got very strong balance
sheets and stimulus is coming. And I've trust that with
(16:50):
perhaps other markets in the West where you may have
a consumer that's more extended and austerity is coming. So
I think, you know, the setup for the consumer is
is actually quite good. Would you know. I focus on
areas like some of the staples areas you look at,
you know, you talked about increased competition, the lig an area,
like beer, and I think competitive intensity has definitely come
(17:11):
down natural premialization. They're getting pricing. They've done a lot
in terms of rationalizing factories and things like that, and
that capital return story is very live and well. Sports
where you've got look at that spend per capita on
sportswear in China, it's a fraction of what we see
in the West.
Speaker 1 (17:28):
Well, let me ask you before before you move on
to anything else about the luxury goods sector in China,
and that one of the things we've been reading about
a lot recently, and the decline of interest in Chinese
consumer is in the big Western luxury brands and they
are shift back to more more of a sense of
domestic luxury.
Speaker 2 (17:45):
You're seeing that, yeah, I mean, if you're talking true luxury,
I mean this is a space globally that's dominated by
the European. Yeah. So you know, if you were to
focus on luxury in China, there's not many ways to
play it. I'd say, you know, this strongest luxury brand
in China is probably Malti as the top by Jo Brandy.
(18:06):
So you know, it's not a it's not a big
space if you focus purely on luxury. Obviously there's there's
there's some upper market brands, but you know, the real
opportunity I think is much more in mass nice market.
Speaker 1 (18:20):
Okay, And what about the and I suppose when we
look at China at the moment, we tend to see innovation,
don't we. We see the biggest producers of the evs.
We see this extraordinary progress in in AI, the catchy,
the unexpected catch up, and we see the huge leadership
in solar panels and renewable energy. And also of course
they're a much faster shifted to using nuclear energy than
(18:43):
the rest of us. So we see this this this
ongoing innovation and the whole idea that even a few
years ago, people would be writing about how China with
China was all very well, but really they're just copying
and that story is over stunning innovation in China.
Speaker 2 (18:57):
Now absolutely true. Yeah, absolutely, it's something that we see daily.
I talk about how companies are investing and you're seeing
that coming through it just you know, improving competitiveness, which
is teating into priss and plow for companies, you know.
So yeah, I mean that's definitely a big trend. I
have a pretty big, big bet in the trust in industrials,
(19:17):
and there's still there's still you know, room for that
to play out. If you look at an area like robotics,
up until a few years years ago, the top four
players were all far you know, the top sort of
the big four. Now two of those are now local,
but there's still room to make to make share gains.
Speaker 1 (19:34):
Domestical what are those local what are those local robotics.
Speaker 2 (19:37):
Companies, companies like Stern and in events. You know, companies
that are that are pushing up into into that robotic space.
A lot of them, like an Inmates, is doing some
of the other components as well. You know, there's definitely
room to room to grow there. That whole ev chain
that we talked about is very exciting.
Speaker 1 (19:56):
They've got this great shift to high quality growth. One
of the problems that people have felt with that with
stock markets over the last four or five years, last decade,
maybe is it an awful lot of the growth takes
place off market before companies list. Right, So the real growth,
the real innovation, the real excitement is in private markets,
not public Do you feel that in China as well,
(20:18):
that maybe the listed stocks don't necessarily represent the extent
of the innovation in the economy. It's hard to get
real access.
Speaker 2 (20:28):
Yeah, no, it's a very fair point that, you know,
I mean, globally, companies are coming to market later. You've
got some huge private companies. Luckily for us, we're quite
active in the private space as well.
Speaker 1 (20:40):
How it's a the trust of privates, so.
Speaker 2 (20:43):
It's just over ten percent.
Speaker 1 (20:45):
What else is in that how do you find those?
I mean that's even harder, right, finding finding a good
listed stock in thousands of listed companies is hard enough,
but going out and looking for private companies on the
ground in China, how do you do that?
Speaker 2 (20:58):
Releverage our public team, So as our public team is
you know, sort of obviously focused on you know, the
public listeness doocs, but you know they can, you know,
they can look at the larger private companies as well.
But we have people that are purely focused on private
as well, and it's an area that we've expanded out.
The majority of potential opportunities that we're finding now is proprietary.
(21:23):
So years back were probably more reliant on the banks,
but you know, these days, you know, it's very much
the proprietary opportunity that we're that we're seeing, you know,
by tents we added to you know, in the secondary
market last year we think at a single digit type
of valuation and that's where the international business losing money.
(21:43):
So you know, the TikTok part of the story is
actually a drag on earners and very much we feel
not factored into into the overall story. And you know,
again I feel it's probably another area where the US
exposure is somewhat overstated. I mean it's not insignificant. They've
got one hundred and seventy million or so users in
(22:04):
the US, which is about half of pation. But you
know TikTok has have a two billion users.
Speaker 1 (22:09):
And how do you exit a position like that? I mean,
you're hoping that the IPO market will come back and
you will be able to exit that in the public markets.
Speaker 2 (22:19):
Yeah, IPO will be the main form of exit. You know,
there could be potential trade sales and that sort of
thing in the future, but you know, you've got to
assume that that, you know, IPO is going to be
the main, you know, the main way to exit these positions.
Speaker 1 (22:37):
Well, a lot of the things that you've been talking about,
it sounds like they might give some hope to those
worrying about how countries such as China will cope with
their demographic disasters or somedly like them disasters. I mean,
China is one of the first places to start think
in actual falls in population, right, which is quite a thing.
(22:59):
So you see that unfolding, I mean it is extraordinary
and that you know, we've never really I was writing
the other day about how the world is through effectively
peak humanity at the moment, we may already have hit it.
Given out how incorrect most forecasts of fertility are, we
may already be at peak humanity, which is an extraordinary
thing for us for anyway our living and for the
first time ever positively topping out of the global population.
(23:21):
And you can see it in action in some European countries.
You can see it in action in Japan, and you're
beginning to see it in action in China.
Speaker 2 (23:29):
What happens?
Speaker 1 (23:29):
How does this work? I mean, no one knows that works, right,
because we haven't seen it before. But lots of the
innovations that you've been discussing feel like they would feed
very well into a declining population or certainly a heavily
aging and declining population.
Speaker 2 (23:42):
Yeah, I mean it's a challenge. And as you say,
it's not just China. Obviously, Europe, Japan, you know, clearly
clearly have these challenges. I don't feel like it's you know,
something that sort of you know, really changes the outlook
for a lot of stocks. If we're sort of looking
out about to ten years, you know, in a big
(24:02):
one for a lot of companies, and there are things
that China can do obviously, you know, it's the potential,
you know, raising of the retirement age. There's still the
urbanization story in China. There's still you know, something that's
definitely going to play out. You know, you would have
heard the potential for things like Houko reform, the household
registration reform still got you know, two hundred and eighty
(24:25):
million or so workers that aren't afforded the same rights
as others. So still a lot of room to you know,
address these challenges, and I think that can be you know,
definitely supports for consumption as well.
Speaker 1 (24:38):
One of the things that is really required for a
big expansion of the consumer economy, and China is in
a bigger welfare state.
Speaker 2 (24:45):
Right.
Speaker 1 (24:45):
One of the reasons why it's very hard for being
able to spend and feel confident in spending, particularly in
a declining population environment, is the lack of a real
safety net. So hotly you want to save as much
as you can if no one else is going to
take care of you. So surely that the the biggest step
forward to creating a consumer economy would be the creation
of a genuine, more all encompassing welfare state.
Speaker 2 (25:07):
Yeah, I think all encompassing is the right word. It's
it's there, but it needs to be you know, there's
room for it to be bolstered. And the things that
we've talked about about potential reform in the household registration
and that sort of thing, you know, it can be
boost to that. And I think you've got to assume
that those types of things are on the radar and
thinking about you can support the out look of the
consumer going forward.
Speaker 1 (25:28):
Okay, what would make you feel less optimistic about the
Chinese market? We've talked about all the reasons to be
optimistic about long term returns and the things that are
exciting particularly particularly innovation, etc. But what would make you worry?
Make you think ically, you know, maybe this is more
of a more of a trade and a long term investment,
(25:48):
which was is how a lot of people do see.
Speaker 2 (25:50):
The market, right. I think, you know what would make
me more negative? Obviously, you know what happens with property
as are set is key, so you know it's sort
of aging. Commitment to you know, continue to drive that
recovery would be a concern. I think also if we
saw you know, a ramp up in domestic regulation, that
would be that would be a concern obviously. You know,
(26:12):
we went through a period where we did see that
you know, pretty pretty significant ramp up in domestic regulation. Uh.
You know, we feel we're definitely you know, the focus
is much very clearly now on growth. But for whatever
reason we saw, i'd say regulation, you know, move strongly
in the other direction, that would be definitely be a
(26:33):
concern for us.
Speaker 1 (26:35):
On the flip side, what would make you want to
shout from rooftops, everyone get your money and now.
Speaker 2 (26:40):
It would just be a continuation of a sort of
steady recovery. No, I don't think I'd be that bullship.
You know, we sort of had you know, sort of
huge stimulus you know, infrastructure type packages of the past,
but you know, just sort of you know, increasing support
for the consumer, gradually roving consumer sentiment. And if we're
(27:03):
sort of you know, able to draw on some of
those savings and things and things gradually gradually recover, that
would be great. Obviously, a more stable global environment mm hmm,
that would do it for everybody that would It would
be nice to have.
Speaker 1 (27:18):
Pill tell us this, tell us the story of the
most exciting stock you've added recently.
Speaker 2 (27:23):
I would say it's in my top ten. But if
you look at like a company like her Side, you know, Lied,
they're extremely competitive in that space. And you know, obviously
you know, a very strong like a position in China,
but you know, going going off shore making sort of
you know big big wins globally as well, and you know,
(27:44):
I just it's hard to see how that competitive position,
you know, reverses and you know, let's face it, I mean,
Autonomous is really just getting going. So we're sort of
at the starting point.
Speaker 1 (27:55):
Last question, then, Belle, what are you reading at the moment?
Speaker 2 (27:59):
Is not investment related. It's a book called The Line
Tracker's Guide to Lives and the author, Boyd Barty, if
you've heard him talk, is a fantastic storyteller and they've
heard many of his of his stories, but hadn't read
the book yet, so I'm sort of working through that.
I highly recommend it. There's some great stories and I
(28:20):
think probably lessons for life in there as well.
Speaker 1 (28:23):
Brilliant. Thank you very much and thanks for joining us today.
That was fascinating.
Speaker 2 (28:27):
Thanks Marek, great to chat.
Speaker 1 (28:34):
Thanks for listening to this week's Marin Talks Money. If
you like our show, rate review and subscribe, wherever you
listen to podcasts and keep sending questions or comments to
Marryn Money at Bloomberg dot net. You can also follow
me and John on Twitter or x I'm at marins
w and John is John Underscore Stepic. This episode was
hosted by Me Maren Sunset Web. It was produced by
Someersardian and sound designed by Blake Maple's and special thanks
(28:57):
to Dale Nichols
Host
Merryn Somerset Webb
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