Five Myths About China Investors Need To Rethink

Many investors continue to view China through an outdated lens – as an imitator rather than an innovator, or as a fragile economy reliant on the West. Having recently completed its second annual investment immersion trip to China, Foord Asset Management says that what’s happening on the ground tells a very different story.

“What we saw was extraordinary scale, speed and innovation. Cities that were once humble coastal settlements are now economic powerhouses,” says Julie Macleod-Henderson, Head of Retail Investments at Foord Asset Management. “It is no longer an emerging market and should not be underestimated.”

Although China already accounts for around 40% of global GDP, it remains underrepresented in global indices, such as holding a 3% weight in the All Country World Index (MSCI ACWI). For investors, separating perception from reality is essential to recognising where true value and innovation lie. Here are five persistent myths about China, and the realities investors should be paying attention to.

MYTH 1: CHINA JUST COPIES THE WEST

One of the biggest misconceptions about China is that it simply imitates Western ideas. In reality, the country is pushing the frontier in fields like AI, robotics, biotech and EVs. 

Companies like Pony.ai are pioneering autonomous driving, while brands such as Huawei are redefining connectivity and infrastructure. In robotics, innovators like Mech Mind Robotics have carved out global niches, supplying advanced vision systems to leading car manufacturers.

It’s no longer a matter of catching up; China is leading in critical areas of the future economy.

MYTH 2: CHINA DOESN’T PRODUCE QUALITY GOODS

Many people still associate “Made in China” with low quality. But walk the streets of cities like Shenzhen and Shanghai, and you’ll find beautifully designed stores, premium local brands, and a confident consumer base choosing Chinese products over imports.

Take Chagee, the modern tea brand that intends to open 5,000 stores in just two years because demand is there. Or the new generation of Chinese EV makers, producing high-quality cars at price points global competitors struggle to match.

MYTH 3: CHINA’S ECONOMY IS FRAGILE

From high-speed trains to state-of-the-art urban developments, the scale of infrastructure investment and execution is difficult to overstate. Over the past two decades, “sleepy” cities have transformed into innovation hubs.

Shenzhen, for example, was once a fishing village; today, it’s a city of over 17 million people with a thriving middle class, world-leading tech clusters, and advanced manufacturing. “What stands out is the visible evidence of long-term planning,” says Macleod-Henderson. “This isn’t short-term stimulus. It’s structural, sustained growth.”

MYTH 4: CHINA NEEDS THE WEST

China’s economy is increasingly inward-focused, driven by domestic consumers, local supply chains, and homegrown technology. Digital platforms like Tencent’s WeChat and Ant Group’s Alipay power financial systems independent of Western payment networks, while leading global companies are innovating for Chinese consumers first, and then the rest of the world.

“The truth is China doesn’t need to mirror Western economies to thrive,” says Macleod-Henderson. “Its ecosystems are self-reliant and extremely competitive.”

MYTH 5: CHINESE CONSUMER DEMAND IS WEAK

Far from being cautious spenders, Chinese consumers are brand loyal, value-driven and aspirational. Rising incomes and urbanisation have created one of the world’s most powerful domestic consumer markets.

From premium homeware at Atour Hotels to flagship technology products, domestic demand is a key growth driver, enabling local brands to define consumer trends. Falling sales growth of Western brands in China are due to Chinese consumers increasingly preferring their homegrown brands.

“China isn’t just competing with the world’s leading economies; it’s quietly building its own version of the future at scale. Ignoring this means missing out on structural, long-term growth opportunities,” says Macleod-Henderson. “Investors need to look through the myths and understand what’s happening on the ground. This will be critical in making informed decisions.”

Foord Asset Management benefits from its Singapore-based research team, which provides first-hand insight into these rapidly evolving markets as well as exposure to some of these innovative companies. For investors, the Foord Asia ex-Japan Fund, Foord Global Equity Fund and Foord International Fund provide measured and mandate-dependent exposure to one of the world’s most dynamic growth stories.