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Fidelity International: Geopolitical Risks Intensify Divergence, China Remains Core to Emerging Market Development
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The "Fidelity International 2026 Analyst Survey" indicates that emerging markets are significantly impacted by supply-side shocks due to Middle East conflicts. Not only is energy flow disrupted, but geopolitical tensions also drive up prices, causing more divergence in development across emerging market regions. Long-term investors need to look beyond short-term noise and focus on the fundamentals shaping the market in the long run. Fidelity analysts observe that Mainland China remains the core of emerging market development. Although short-term pressures arise from increased energy import costs and renewed supply chain disruptions, other structural growth drivers continue to support its long-term outlook. These include policymakers' ongoing emphasis on promoting high-tech industries to enhance self-sufficiency, supporting growth in sectors such as electric vehicles, artificial intelligence, biotechnology, and robotics. Fidelity analysts note that Mainland China's semiconductor equipment manufacturers benefit from domestic capacity expansion and localized supply chains. The biotechnology sector also has advantages over Western peers, including faster R&D timelines and lower costs. However, consumer demand remains uneven, with a weak housing market and persistent deflationary pressures, though there is potential at both the high-end and budget consumer market segments. Niamh Brodie-Machura, Chief Investment Officer of Equities at Fidelity International, stated that geopolitical developments are once again affecting the outlook for emerging markets, whether through the direct impact of trade and policy uncertainties or the indirect transmission of energy prices and inflation. The energy market's volatility adds complexity, especially for regions more sensitive to energy supply shocks. If markets stabilize, short-term volatility may ease, but currently, risks are expected to persist longer, exacerbating inflationary pressures, particularly impacting energy-importing countries. (ca/w) Auto-translated by third-party software This translation was auto-generated by third-party software. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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