The Year of the Fire Horse

Chinese New Year ushers in the Year of the Fire Horse – a time associated with bold decisions and forward momentum. You may have been on the sidelines before, but China is now too big, too important, and too central to future global growth to ignore. This leaves one unavoidable question: how do you approach investing in the world’s second-largest economy?

A moment for bold decisions

The Year of the Fire Horse is traditionally associated with energy, transformation, and decisive action. Financially, it’s a reminder that periods of change often reward confidence and forward-looking decisions, while standing still can mean missing long-term opportunity.

That symbolism feels particularly apt for China in 2026. The outlook for the year ahead is encouraging, with positive market momentum and forecasts pointing to rising company earnings as business conditions improve. At the same time, Chinese equities remain priced more conservatively than developed markets, creating an opportunity for investors as earnings growth and sentiment begin to align.

Yet for many people, China still feels uncomfortable as an investment.

Hesitation is understandable – but costly

If you’ve been wary of investing in China, you’re not alone. Headlines, geopolitics, and unfamiliar markets can make it feel safer to look elsewhere. But avoiding China altogether means ignoring the world’s second-largest economy and a central driver of global growth.

Emerging markets now generate around 65% of global growth, and China sits at their heart. It leads the world in electric vehicle production, dominates rare earth supply chains, and accounts for a huge share of global manufacturing output. These aren’t marginal industries – they’re foundational to how the global economy will function in the years ahead.
 

Western governments clearly recognise this reality. Recent trade and engagement efforts reflect a growing acceptance that China remains economically essential. As UK Prime Minister Keir Starmer said during a recent visit to China:
 

For investors, the real question isn’t whether China matters. It’s whether you have the right way to invest.

Why investing in China with TEMIT makes sense

China is not a market you approach blindly. This is where Templeton Emerging Markets Investment Trust (TEMIT) comes in.

TEMIT has been investing across emerging markets for more than 35 years, through multiple cycles. Its managers don’t rely on headlines or indices – they rely on deep, local research. TEMIT benefits from on-the-ground investment teams across China and other emerging markets, giving insights that simply aren’t available from a desk in London or New York.

That local presence allows TEMIT to be selective. Rather than buying “China” as a concept, TEMIT invests in individual businesses with strong fundamentals, competitive advantages, and long-term relevance.

From China’s innovators to global leaders

In China, TEMIT owns companies such as BYD, a global leader in electric vehicles and battery technology; NARI Technology, which plays a key role in modernising China’s power grid; and Weichai Power, a leader in industrial engines supporting logistics and infrastructure worldwide. These are not speculative investments – they are profitable businesses embedded in long-term structural trends.

But TEMIT’s strength doesn’t stop at China.

Across emerging markets, you gain exposure to companies like TSMC in Taiwan, the backbone of the global semiconductor industry; MediaTek, powering the connected world; Naver in South Korea, a dominant digital platform; and Itaú in Brazil, a high-quality financial franchise serving a growing middle class.

Together, these companies reflect the reality of today’s emerging markets: innovative, globally competitive, and increasingly resilient.

A year to act with confidence

The Year of the Fire Horse isn’t about reckless risk-taking. It’s about decisive action grounded in preparation and expertise.

If your portfolio remains underexposed to emerging economies, now is the time to reassess. China and emerging markets are not fringe opportunities – they are central to future global growth.

With TEMIT, you don’t need to navigate that complexity alone. You can invest with conviction, backed by decades of experience, deep local insight, and a disciplined stock-picking approach.

This year, the Fire Horse invites you to be bold. TEMIT gives you the confidence to invest.