Investors tracking China have been forced to balance soft macro data with surging equity prices. The MSCI Asia-Pac index for China was actually up 28% last year… Shanghai up 18% and we’re seeing continued gains in 2026.
This dynamic raises the inevitable question of whether it is sustainable. “Yes, it is,” says Mark Mobius. He argues that equities are signaling future strength, explaining that “the stock market looks forward… the stock market is telling us that what China is doing in the technology sector is going to be very exciting going forward.”
But Mobius doesn’t expect such strength to revive broader growth. He stressed that “the way to revive the economy is by pushing the consumer sector… that’s not going to happen in China,” because “the emphasis is going to be an industry and technology, and that will not be reflected immediately in the GDP figures.”
As a result, the high growth rates of the prior era may remain unattainable since “we’re never going to see the seven 8% growth that we saw in the past simply because the population is older… smaller than it was before.”
From an asset allocation perspective, he is skeptical of property and consumer sector, observing that “there’s a risk to investing in the property sector and in the consumer sector… but the technology sector is a different story. That’s where you should be looking.”
Fund flows corroborate this rotation, as “people are diversifying away from the US market… there’s a lot of money sloshing around looking for a home.” Those funds have increasingly evaluated Asia because “anybody who wants to have a good portfolio wants to be diversified.”
Beyond China, Mobius continues to emphasize India, maintaining that the country boasts “an incredible consumer market” powered by a “young population, increasing urbanization.” He believes India will “become a major producer of semiconductors,” even if that sounds “farfetched at this stage.”
Until that goal materializes, he favors software exposure since “a lot of the chips software is already being produced and done in India.”
Commodities have also returned to the spotlight. Mobius acknowledges that “everybody’s excited about precious metals” but warns that silver and gold may be overheated: “when the market is so hot,” volatility can trap late buyers.
Rather than chase prices, he suggests patience, saying “maybe 20% lower from where it is now,” and admits that after the rally he has “about 20% in cash now.”
His final preference for India is pragmatic: “within this 20% we’re very diversified across many industries,” and he would increase exposure further “depending on what we can find,” even eyeing 30%.
You can watch the entire interview here:
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