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As with any investment, your capital is at risk. Past performance is not a guide to future returns.   Danielle Levy (DL): Hello, and welcome to this programme for Baillie Gifford, the latest in a series of webinars where we talk to the managers of the business’ investment trusts.  My name is Danielle Levy and today, I’ll be talking to Linda Lin, co-manager of the Baillie Gifford China Growth Trust about how she runs the portfolio. She will then answer your questions, which you can submit at any time via the Q&A box.  Linda, welcome and thank you for joining us. Linda Lin (LL): Hi everyone, thanks for having me today. DL: You’ve spoken about a shift in the label ‘made in China’ to ‘invented in China’. Where are you seeing the biggest pockets of innovation right now? LL: Let’s start with the IP [intellectual property] data I have. I think China accounted for more than 49 percent of global patents filing in 2024. In number terms, I think China probably had about 5.7 million patents in force ahead of the US’s about 3.5 million. That doesn’t really say every patent is high-quality, but it actually shows the skill of China shifting from the old manufacturing capacity to the invention capacity. I see three areas which are quite exciting.  I think first one is about  AI  moving from the model layer to everyday products. China’s doing AI in a different, but more efficient way. I know everyone on the street now is talking about DeepSeek. Why was it important? I think DeepSeek changed the whole conversation globally, from who can spend the most into the capex to actually, who can use or apply AI more efficiently? Also, in China, we don’t only have DeepSeek, there are actually quite a few very competitive independent labs from China, like MiniMax or Kimi.  The second area is physical AI. When you are talking about the global, for example, I think robotics is a good example. China actually generates one of the largest IT and robotics industries, but in the meantime, China actually is the largest market for industrial robots. This is how we see China’s not only about IP, it’s about how to marry the IP to the real world. In the same case, I think autonomous driving and also battery technology are the same approved examples.  I think the last layer is about consumer innovation: how the internet platforms, how the China consumer brands use AI more efficiently to drive future revenue growth. And, also, we’re asking ourselves every day, where is the next WeChat? Where’s the next ByteDance? I think in the AI era, there must be some super-apps coming from China. DL: It sets me up nicely for my next question which is, which companies in the portfolio have the potential to benefit from this innovation, or it could be any companies that you are monitoring, perhaps? LL: I think we answer this question by layers. Firstly, like I mentioned at the model layer, we have invested in Chinese independent AI labs. For example, Minimax. Also, at the platform layer, our existing holdings Tencent, Alibaba, ByteDance, they have their own models and, also, distribution channels, data and they can actually use this to drive the next wave of monetisation opportunities. Also, at the infrastructure layer, companies’ holdings like Air Mac, Naura, Zhongji Innolight in our portfolio, they will benefit from the semiconductor localisation and, also, the global AI datacentre demand.  At the physical layer, I didn’t mention Horizon, but also, CATL Media, Inovance in our portfolio. They connect the best AI model with cars, factories, batteries and robots.  The last one I think I mentioned because the largest consumption market globally, how those brands and how those China consumer platforms use AI to drive the next wave of growth. For example, we’re excited to see some of our consumer platforms, like PDD or Rednote, use AI to generate more revenue in the future. DL: China’s next five-year plan was recently approved. It would be good if you could talk us through what the main takeaways were, and what the plan means for the Trust. LL: After carefully reading that plan, I think the main message is very clear. What China wants is firstly, high-quality technology innovation and self-resilience in the key technology areas, and also, domestic consumption. We read this plan very carefully, but it’s not a stock-picking book. It’s a useful map for investors to see where the capital will flow, where the industrial policy will support, and also, where the future talent may flow.  The priorities are very aligned, actually, to what we have in our China Trust portfolio. I mentioned AI, robotics, the semiconductor industry, healthcare innovation, the energy transition and, also, the consumption upgrade. But I think the most important lesson we learnt in the past is we need a combination of policy and profit. We don’t buy companies just because they’re on the favourite list from the government. We actually want to back up companies where the policy support meets real long-term competitor advantage, and also eventually provides positive shareholder returns. DL: What do you feel that the Chinese government is specifically doing to support innovation? LL: I think they normally support innovation in three ways: direction, capital and adoption.  I think the direction, like I mentioned, in the plan they have a very clear guidance where there are going to be the most important growth drivers for China in the next five to ten years. That actually gives a very clear guidance on who will drive the next wave of high-quality technology innovation.  Then, capital, I think they will supply sufficient capital to drive this growth and, also, together with that, very favourable industrial policies. Also, they will provide very strong support from the domestic supply chain.  The last thing is about fast adoption. In one of the guidance in the five-year plan, they talk about AI-plus. Rather than just letting the AI models stay in the lab, actually in China, they want this AI to be quickly and fast to adapt into different industries. I’m talking about factories. I’m talking about the energy industry. I’m talking about loads and loads of real cases in the physical world. DL: It's fair to say that China’s been a volatile ride for investors over the past five to ten years.  Do you think we’ve reached a turning point now, and if so, why? LL: I think I would like to say the direction of travel has really improved. I will not just simply call it  a straight-line turning point. There are three things that really changed, which we keep communicating with our shareholders.  I think that firstly, the local policy tone is more supportive to drive growth. Second, I think people worrying about the property sector, which is a drag, but I think it’s a less dominant problem than it was. Third, the most exciting thing is, actually, the innovation is showing more in the companies’ fundamentals rather than just in the headlines.  Another very interesting area is we see more Chinese companies actually becoming global leaders in different industries. For a Trust example, we have generated a strong year for 2026. I think the NAV return is about 34% versus 22.2% for the index. I would think that provides some evidence of the reengagement, but that’s not actually a promise. We emphasise many times, investing in China requires long-term patience, and also, volatility in the short-term. In return, the opportunity set is very large.  I think the old way of seeing China is only the old risk in the old economies, but wow, there are lots of interesting and exciting opportunities on the ground. We hope those opportunities are aligned with China’s next growth engine, which we choose for our shareholders. DL: You spoke about DeepSeek earlier. Obviously, that was a bit of a wakeup call for some of the western tech companies. What else do you think that the West can learn from China when it comes to AI, and how have things developed since the release of DeepSeek? LL: I think the lessons from DeepSeek are really about efficiency because China has a constraint with chips. There’s no other way Chinese players can do it, compared to the US players. So, it’s not only a story about DeepSeek. I think the story in China’s AI ecosystem is really to create a more open and lower-cost ecosystem, not only for China, but for global markets.  I think companies we mentioned, not only DeepSeek, MiniMax, Kimi, they’re trying not to build the most powerful and perfect model, but what they’re trying to do is trying to build models that are good enough, but also, cheap enough and easy to use enough for massive adoption.  One of our holdings, which is MiniMax, I think the founder, he keeps emphasising that they can use less than 10 percent of the cost that the US players are trying to use. They can actually drive up the capacity more than 90 percent. The reason for doing that is because, if you think about the future of the AI wars, all those models are going to be used by billions of users in different areas: application, cars, factories. I think China’s advantage is not about the single model, it’s actually the ability to make AI affordable, useful for billions of users globally. DL: You touched on a few companies there. I was wondering if there are any other companies in your portfolio that stand to profit from the development and the adoption of AI in China? LL: I think I would separate them into two baskets. One is like a direct basket that people probably will think about those technology platforms being powered by AI, which can use AI to drive the growth in advertising, in gaming, in the cloud, in SAaS and in consumer applications. Also, we mentioned Horizon Robotics in physical AI. They can apply the more powerful modelling: autonomous driving, the robotics industry. Naura and AMAC, they are the local champions for semiconductors. I put them in the direct basket. The indirect basket is about energy. I think that AI needs power, storage and, also, a very resilient national grid. In our portfolio, some holdings like CATL, Sungrow and, also, China Yangtze Power, I think those holdings provide us a second layer of China actually generating a much cheaper power cost compared to the US or the other developed world. The story of the indirect basket is not only about AI software. It’s about energy and the hardware in the future. DL: You touched on Horizon Robotics there, which specialises in AI chips and software for autonomous driving systems. That brings together a number of themes that are running through your portfolio. It would be good to talk about Horizon and the potential growth that you see coming through there. LL: For Horizon Robotics, I think most of the investors think this is only AI chips for autonomous driving.  Which, I think it’s already leading the Chinese market and probably has the potential to go global. But if you look at the name, it’s called Horizon Robotics. I think the founder, Dr Yu Kai, thinks actually cars are one of the robots.  The growth story in China for Horizon is very clear. I think they will drive more penetration ratio for the cars to have smart driving systems. By some numbers from the five-year plan we talked about, they mentioned by 2035, the smart driving system penetration ratio needs to reach to more than 65 percent. If you think about how many cars are sold in China, it’s about 31 million cars sold in China in 2025. In ten years’ time, most of the cars will be powered by this very strong autonomous driving system. I think that’s quite exciting. That’s only one story of Horizon. How about the robotics? Who’s going to build the brain for the next generation of robots globally? Also, for Horizon Robotics, it’s very interesting. They’re actually using the NVIDIA way to do business: they are not only doing the hardware, they actually combine the hardware and software together. Which means the founder has a very long-term ambition. He wants to build the Microsoft of the next wave of robotics computation systems globally. DL: ByteDance, another well-known name, the owner of TikTok, is one of the unlisted companies in your portfolio. How do you approach its valuation, given the regulatory risk associated with TikTok? It would be good to touch on your outlook for the business as well. LL: If you mean TikTok US risk, according to the company announcement in January this year, forTikTok US, I think the negotiation was already done. After the deal, which means TikTok US will be majority owned by the US investors, and ByteDance, as a parent company, will remain a small shareholder for the US entity, but they will share the economic benefits from the US.  I would say the risk of shutting down in the US is already gone. I think the next wave of growth is after they’ve been allowed to do more business in the US, how they’re going to drive the next opportunity? Is that  advertising? Is that ecommerce or is that AI opportunity?  Investors put too much attention on the US risk, but if you look at the company, it owns the largest super-app factories in China. Douyin now already became the largest ecommerce platform in terms of revenue and, also, one of the largest advertising platforms. Doubao, which is their chatbot, is already generating DAU (daily active users) about 100 million in China already. Is that the next WeChat or the next super-app from China? There are so many exciting opportunities they generate from China. I think that’s a big part of the revenue I think investors shouldn’t ignore.  Other than that, this is going to be an exciting global opportunity. I would like to also add, people didn’t really talk that much, but ByteDance, from my perspective, is one of the strongest AI players globally. How that’s going to bring the exciting growth for our shareholders.  That’s about the business side, and how about the valuation perspective? During the conversation with our shareholders, we didn’t really value the US business before in the valuation, which means any positive surprise coming from the US is actually a positive surprise to our valuation. That’s from the manager perspective. We also have the independent third-party valuation committee to help give us a checkup or more compliant way to do the valuation. If you look at our valuation check, that will be more done by the third-party experts. DL: China has ambitious plans to build its own domestic semiconductor ecosystem. Which companies have the potential to benefit from this? How do you see it panning out? LL: I would not say that China’s catching up to the most advanced global technology overnight. I think the opportunity is broader and, also more invisible than that. I think China, like we mentioned in the five-year plan, needs a domestic ecosystem across the whole semiconductor supply chain, including equipment, material, packaging and, also, foundries.  In our portfolio, I mentioned at the infrastructure layer, we own local champions like Air Mac and Naura. Also, I think we’re also looking at some Chinese GPUs as well. I think the direction of travel is very clear. Nowadays, I think the local semiconductor equipment is probably now about 35 [percent]. I think they have a very clear target by 2035 that ratio will reach 70 percent. So, I think that’s a very clear growth potential for us as well. DL: Robotics is another area where China has ambitions and is the world’s leading manufacturer in robotics. How does the portfolio have exposure to robotics? I know we spoke about Horizon, but perhaps there are other companies. What do you think lies ahead in this space? LL: I mentioned in the first question, China is not only the largest manufacturing base of robotics, it’s also the largest market for industrial robots. From a global demand perspective, I think China probably generates more than 50 percent of the global demand for industrial robots. We’re very excited about the opportunity in those areas.  For example, factory automation, we have some holdings like Inovance.  We have some holdings like Midea Group . If you look at what they’re trying to do, they’re trying to do the next generation of the factory, what it looks like. That’s quite exciting. Also, from the embodied AI perspective, Horizon has a robotics business, so Horizon will benefit from the embodied AI perspective.  Generally speaking, I think this is not only about China opportunity. I think once China [unclear] the local market and brings the cost down and drives up the technology innovation, I think probably the robotics industry will replicate what’s already happening in the EV industry. I think China will become one of the global leading players in the industry. DL: I guess this is the million-dollar question when it comes to China: how do you manage political risk? LL: That’s the most important question. To be very humble, I think political risk in China cannot be diversified away completely, because that’s now our situation today. I think our question is a part of, what’s our return to take this risk. Every time when we’re thinking about investing in China, we know there’s a risk of political complexity. That’s the reason we’re trying to fund the growth companies who can provide exciting returns for our shareholders, who are taking this risk.  Also, when we’re doing different company analysis, I think there’s a very interesting question we ask these companies, it’s whether this company is long-term aligned with Chinese development and, also, global development. If you look at the areas we invest in, we invest in global productivity improvement, energy security, better healthcare, not only for China, and also, better consumption and social sustainability. That’s how we think about long-term perspectives to align with, not only geopolitical issues, but also, the local government regulation risk issue.  The last thing we’re trying to do is we’re trying to manage the size. And also, we’ve been quite disciplined about the valuation we’re paying for those opportunities. DL: It’s been over a year since Donald Trump’s Liberation Day tariff announcements. What impact have these tariffs had on your portfolio and the economy as a whole? LL: So it has been a year, okay. I would say it’s clearly a headwind, I remember a year ago.  But that only creates uncertainty for the investors’ sentiment to be very honest.  If you look at our portfolio, most of the companies generate revenue from the domestic market. Because of what happened last year, we talked to a lot of companies in our portfolio. They actually keep thinking about how to diversify their supply chain globally. They keep thinking more about their supply chain security. I think that’s one thing.  From the portfolio revenue perspective, we didn’t really see meaningful negative impact to most of our portfolio companies. In the long term, I think it’s very clear that tariffs really matter. But if you look at the size, I think the domestic Chinese market opportunity is much larger than the exports to China. So, we are going to focus on funding those companies.  Localisation, like I mentioned, that’s another wakeup call for the semiconductor industry. In the long term, probably you can feel again why Chinese government is so keen on this independence in the key technology areas. DL: Finally, do you think there’s an opportunity cost to being out of China, and if so, why? LL: I think I would like to phrase this a little bit carefully, because I think China’s not a market you buy for comfort. It’s a market you’re buying for opportunity. That opportunity comes with volatility.  The opportunity, if you’re staying out of China, which means you ignore what’s going on in the global AI industry, because what’s actually happening in China really matters to what’s happening in the US and globally.  Also, like I mentioned, there are lots of opportunities in China. It’s not only a Chinese story, they’re actually becoming global leaders.  I would say if you are looking for the best growth opportunities globally, or you are looking for the right valuations of investment opportunities – because from the valuation perspective, I think Chinese market still remains cheaper compared the global markets. For the long-term growth investor, I think that combination gives us a favourable starting point for our shareholders. DL: Thank you, Linda. We’ve had a few questions coming in from our audience. The first question is, “How has the Chinese government’s anti-involution push inform your process?” LL: We did look at that question in different areas. I think anti-involution is back to our talk about the five-year plan. In China, if the government gives a very favourable industrial policy, everyone will go to that industry. That will actually create massive competition, and also, overcapacity.  I think the government’s intention is high-quality technology innovation. They don’t really want, for example, the food delivery platforms to compete with the subsidy only in the food delivery industry. They want those technology platforms to invest heavily in AI. I would say it’s different industry-by-industry, but in the meantime, it’s aligned with what the government, in the five-year plan, want. They want high-quality growth. They want high-quality innovation. That means you don’t really need to only compete in the Chinese market. What’s the global opportunity? Do you want to become one of the largest ecommerce companies globally, like Temu in PDD? They’re also encouraging those Chinese companies to take the opportunity to do globalisation. DL: “30 percent of the portfolio is held in old names: ByteDance, Tencent and Alibaba. Why is more weight not given to newer company names?” I think they mean companies that you’ve held, ByteDance, etc, for a longer period. LL: I think if you look at the whole portfolio shape perspective, we did bring some new ideas, exciting new ideas, to our portfolio this year. Like I mentioned, MiniMax, like I mentioned, Rednote, which is our second largest private holding alongside ByteDance.  After that, I think for  three of our core holdings like ByteDance, Tencent, Alibaba, we still believe they are three strong players to drive the next wave of technology growth in China. Especially from the AI perspective, because AI’s not a one-month or two-month topic, it’s another industrial revolution. How they can use AI to drive-, whether ByteDance can produce another best AI model in China or whether Tencent can drive to make more interesting new AI games. We’re actually quite excited to see the growth opportunities for those three companies.  In the meantime, at Baillie Gifford, we are long-term, patient shareholders. We would like to support those companies that still have enormous potential to grow in the next five to ten years. As a team, we do review the valuation, the upside, every six months for those opportunities. We did bring more interesting ideas, but we still think those are three best ideas we can hold for our shareholders. DL: Thank you. The next question is, “How do you see the AI race developing in China?” LL: AI race, that’s a very interesting question. Like I mentioned again, this is not a year-or-two race. I think this is really about the next generation technology that’s going to empower the Chinese economy. Like I mentioned, in China, the government doesn’t only want to produce the most powerful models in the digital world, they want those Chinese players to bring the cost down to try and apply those models into the real cases in different scenarios. I mentioned factory automation, autonomous driving, robotics, healthcare. I would say it will take another 10 to 20 years to finish this AI transformation.  At the same time, I feel quite excited. If you also ask me about the AI race versus the US and China, I think it’s very interesting because when people are talking about this, they only talk about the US and China. They don’t really talk about the other world. If you think about AI for the whole of society, I think China’s role is probably more about providing the most efficient, cost advantage and those models can be used for some Chinese companies or for some companies in Africa. We think that’s probably another global opportunity for those Chinese AI companies. DL: We have another question about your process. “How do you decide to invest in a stock and what characteristics do you look for?” LL: For stock picking, we have three stages. For the idea generation, as you know, we have a team based in Edinburgh and, also, team based in Shanghai. In total, we have eight investors in the team. Each investor is hunting for growth ideas, the most interesting growth ideas in China.  After finding that idea, we will have a second phase of investment research. We have a very fixed 10Q structure, in which you need to answer the ten questions. For example, why is this company aligned with China’s growth in the next 10 to 20 years? How that’s mainly for global opportunities? The second, whether the growth is exciting. Where the competitive advantage comes from. Whether we have the best quality management team and valuation and return. We have a very fixed 10Q framework to bring alive the team discussion.  Everyone comes with ideas to buy. You have to finish the report with the 10Q and then we have a team discussion. We just had a team discussion this morning about a company called Luckin Coffee, which is a coffee brand we bought for our shareholders last year.  Then, from the portfolio perspective, for the portfolio managers, we have a monthly discussion about what new ideas we would like to bring to the portfolio for our shareholders. DL: Great. We have a question about the conflict in the Middle East. They want to know, “What impact did the conflict have on the Chinese market earlier this year, and what are the potential repercussions for the economy?” LL: For China, I think the main exposure to the Middle East issue is energy. As you know, China’s still a large energy importer. Higher oil prices actually mean we have higher production costs and whether the consumer is going to pay for that cost. I think we need to be very careful if the oil price keeps very high, that’s going to have a negative impact on the Chinese economy. But I think China didn’t really think about this energy security problem yesterday, I think energy efficiency and security has been part of the five-year plan for several decades. I think in China, nowadays, renewable energy actually is becoming quite visible. Renewable energy now accounts for more than probably 60 percent of the Chinese newly installed power capacity. I think wind, solar probably accounts for about 47 percent and 20 percent coming from electricity.  I think the Middle East issue will have some short-term impact to the Chinese economy, but in the very long-term, China wants energy security. Also, in the AI stage, who probably can keep the most stable or most cost-effective energy price, I think will win the long-term race globally. DL: We have another question on the unlisted exposure in the portfolio. “Aside from ByteDance, what other unlisted companies do you hold? LL: I mentioned Rednote a few times. This is our second private holding in the portfolio. What does Rednote do? It is a consumer internet platform making the social discovery together with ecommerce. If you’re familiar with Instagram, that’s a similar thing. But they’re not only doing advertising, they also became the largest search platform in China. For example, I just got back from Zhenzhen and we’re going to have some interesting activities.  The first thing I would do is, Rednote is becoming my guidance on where to go. I search the activities on Rednote. It is becoming one of the most important traffic for the internet age for China. From the DAU perspective, this is one of the largest DAU user-based companies in China. I think they reach over 200 million. We feel quite excited about the opportunity this company will bring to our shareholders. DL: Great, thanks. Another question is about pent-up savings amongst households. “Which companies stand to benefit?” LL: I think savings is a strength, but also, is a big problem for consumption, right? If you look at how much the Chinese consumer saves, it’s probably around 11 trillion after Covid. It’s more than twice the UK’s GDP.  They need to spend. They need to spend. Where are they spending now? I know the general comment is about how Chinese consumption is soft. Actually, on the ground, we see some very interesting areas. They’re spending more money, not only just buying goods, they’re spending more money on entertainment, travel, and also, on experiences.  That’s a reason that this year we did invest in some new ideas. For example, H World, which is a hotel chain in China, because we found even though consumption was soft, actually the travel number looks quite good. Young people, if they don’t have pressure to buy a new house, they spend more on activities – for example, travel. We did try to fund new ideas from those areas. DL: Great, and the final question, but it’s quite a broad one: “What are the biggest risks and the biggest opportunities associated with investing in China at the moment?” LL: The biggest risk for us, as a growth investor in China, is losing the opportunity to identify the most exciting growth opportunities in different areas. That’s the reason we did invest in private companies in China, because that’s not only about investing in private companies, but those experiences or those learnings help us to identify the most exciting growth companies in China in the early stage, and we want to capture those returns as early as possible for our shareholders.  I think as a growth manager in China, the biggest risk is that we fail to do so. That’s the reason we remember every day where the most exciting companies in China are coming from.  In the meantime, geopolitical risk, local regulation, we bear those risks in mind, but again, if the return we can generate for our shareholders can adjust those risks we’re taking, we should have the right balance. DL: Thank you very much for your time today, Linda. Thank you for your insights.  Thank you to those watching and for your questions. We do have more sessions like this coming up from Baillie Gifford, so do keep your eye out for these if you found today useful. Thank you and goodbye.   <h3 class="TABLEHEADER1212pt">Baillie Gifford China Growth Trust plc</h3> Annual past performance to 31 March each year <table border="1" style="border-collapse: collapse; width: 100%; border-width: 0px; height: 74px;"> <tbody> <tr style="height: 18.5px;"> <td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(0, 0, 0); border-image: initial; padding: 10px; height: 18.5px;"> </td> <td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(0, 0, 0); border-image: initial; padding: 10px; height: 18.5px;">2022</td> <td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(0, 0, 0); border-image: initial; padding: 10px; height: 18.5px;">2023</td> <td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(0, 0, 0); border-image: initial; padding: 10px; height: 18.5px;">2024</td> <td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(0, 0, 0); border-image: initial; padding: 10px; height: 18.5px;">2025</td> <td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(0, 0, 0); border-image: initial; padding: 10px; height: 18.5px;">2026</td> </tr> <tr style="height: 18.5px;"> <td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.5px;">Share Price (%)</td> <td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.5px;">-32.7</td> <td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.5px;">-12.8</td> <td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.5px;">-26.0</td> <td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.5px;">39.7</td> <td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.5px;">11.1</td> </tr> <tr style="height: 18.5px;"> <td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.5px;">NAV (%)</td> <td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.5px;">-28.2</td> <td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.5px;">-4.7</td> <td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.5px;">-27.1</td> <td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.5px;">38.1</td> <td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.5px;">13.2</td> </tr> <tr style="height: 18.5px;"> <td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.5px;">MSCI China All Shares Index (%)</td> <td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.5px;">-20.5</td> <td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.5px;">-0.2</td> <td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.5px;">-18.2</td> <td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.5px;">26.1</td> <td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.5px;">8.2</td> </tr> </tbody> </table> Source: Morningstar, MSCI, total return in sterling.  The index data referenced herein is the property of one or more third party index provider(s) and is used under license. Such index providers accept no liability in connection with this document. For full details, see <a href="https://www.bailliegifford.com/legal">www.bailliegifford.com/legal</a>  Past performance is not a guide to future returns.   <h3 class="MsoNormal">Important information and risk factors</h3> This communication was produced and approved in May 2026 and has not been updated subsequently. It represents views held at the time of recording and may not reflect current thinking. This communication should not be considered as advice or a recommendation to buy, sell or hold a particular investment. This communication contains information on investments which does not constitute independent investment research. Accordingly, it is not subject to the protections afforded to independent research and Baillie Gifford and its staff may have dealt in the investments concerned.  The investment trusts managed by Baillie Gifford & Co Limited are listed UK companies and are not authorised or regulated by the FCA. The value of their shares, and any income from them, can fall as well as rise and investors may not get back the amount invested.  Baillie Gifford & Co and Baillie Gifford & Co Limited is authorised and regulated by the Financial Conduct Authority (FCA).   The specific risks associated with the Trust include:  <ul> <li>The Trust invests in overseas securities. Changes in the rates of exchange may also cause the value of your investment (and any income it may pay) to go down or up.</li> <li>Baillie Gifford China Growth Trust invests in China, where potential issues with market volatility, political and economic instability including the risk of market shutdown, trading, liquidity, settlement, corporate governance, regulation, legislation and taxation could arise, resulting in a negative impact on the value of your investment. Investments in China are often through contractual structures that are complex and could be open to challenge.</li> <li>Unlisted investments such as private companies can increase risk. These assets may be more difficult to sell, so changes in their prices may be greater.</li> <li>The Trust can borrow money to make further investments (sometimes known as "gearing" or "leverage"). The risk is that when this money is repaid by the Trust, the value of the investments may not be enough to cover the borrowing and interest costs, and the Trust will make a loss. If the Trust's investments fall in value, any invested borrowings will increase the amount of this loss.</li> <li>Values for securities which are difficult to trade such as private companies may not be readily available and there can be no assurance that any value assigned to such securities will accurately reflect the price the Trust might receive upon their sale.</li> <li>The Trust can make use of derivatives which may impact on its performance.</li> <li>Investment in smaller companies is generally considered higher risk as changes in their share prices may be greater and the shares may be harder to sell. Smaller companies may do less well in periods of unfavourable economic conditions.</li> <li>The Trust's exposure to a single market and currency may increase risk.</li> <li>Share prices may either be below (at a discount) or above (at a premium) the net asset value (NAV). The Company may issue new shares when the price is at a premium which may reduce the share price. Shares bought at a premium may have a greater risk of loss than those bought at a discount.</li> <li>The Trust can buy back its own shares. The risks from borrowing, referred to above, are increased when a trust buys back its own shares.</li> <li>The aim of the Trust is to achieve capital growth and it is unlikely that the Trust will provide a steady, or indeed any, income.</li> <li>The Trust is listed on the London Stock Exchange and is not authorised or regulated by the Financial Conduct Authority.</li> </ul> Further details of the risks associated with investing in the Trust, including a Key Information Document and how charges are applied, can be found in the Trust specific pages at <a rel="noopener" href="http://www.bailliegifford.com" target="_blank" title="Baillie Gifford">www.bailliegifford.com</a>, or by calling Baillie Gifford on 0800 917 2113.   195702 10062595

China Growth Trust: is China's tide turning?

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About the speaker

About the speaker

Linda Lin

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