BlackRock Investment Institute Videos

BlackRock Investment Institute

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Market take Weekly video_20260928 Serena Jiang Economist BlackRock Investment Institute SCRIPT Camera frame Title slide: China: up the value chain China is increasingly competing on quality in advanced manufacturing – not just scale. In our latest China research, we argue cheaper Chinese technology can lower costs for users while pressuring competitors’ margins and market share. 1: Moving up the value chain China’s move up the manufacturing value chain has global implications. Its long-held focus on cheap, labor-intensive exports has evolved. Today, China is gaining market share in cutting-edge industries like EVs, batteries, advanced machinery and AI. And there’s a key nuance underscoring this shift. While what China sells has moved decidedly upmarket, it’s relying more on its own supply chains. 2: Intensifying competition The result is greater competition for producers, even as low-cost Chinese technology benefits the end user. Outside of China, the important question is whether companies rely on Chinese technology, or compete against it. For example, cheaper Chinese robots can boost productivity, but they also put pressure on rivals. And China is moving from customer to competitor. Just last year, Beijing overtook Germany as the world's largest machine-tool exporter. We see a similar divide in AI, where cheaper Chinese models could accelerate adoption commoditizing the model markets. 3: Scale doesn’t equal returns Whether growth can translate into profits and shareholder returns inside China is an open question. China's industrial policies have built globally competitive companies, but market share gains don't always lead to stronger earnings. AI-related industries are benefiting, while intense competition is squeezing profits elsewhere. Industrial strength, in other words, doesn't guarantee investment returns. Outro: Here’s our Market take China's move up the industrial value chain is reshaping global competition. We’re neutral Chinese equities and stay focused on the areas where growth is translating into strong returns, including around physical AI. Closing frame: Read details: blackrock.com/weekly-commentary
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BlackRock Bottom Line: 2024 Global outlook Speaker: Wei Li, Global Chief Investment Strategist, BlackRock Investment Institute Script: Higher interest rates and greater volatility define the new regime we’re in. In turn, that’s creating greater dispersion of returns. We think investors will benefit from taking a more active approach to portfolios as we head into next year. Here’s our three investment themes for 2024: number one, managing macro risk; number two, steering portfolio outcomes; and number three, harnessing mega forces. BlackRock Bottom Line open Title: BlackRock Investment Institute 2024 global outlook Our first theme is managing macro risk. Production constraints mean central banks face tougher trade-offs between inflation and growth – they can’t respond to faltering growth like before. This leads to a wider set of outcomes and a more uncertain macro outlook. We don’t think investors should wait for the macro environment to improve. Instead, they should look to neutralize macro exposures or be very deliberate about which risks they take. Our second theme is steering portfolio outcomes. We believe the new regime rewards an active approach to portfolios. Greater volatility and dispersion of returns create space for investment expertise to shine – that involves being more dynamic with indexing and alpha-seeking strategies, while staying selective. Our third theme is harnessing mega forces. We see five structural shifts reshaping markets and driving returns now and in the future. We think they have become important portfolio building blocks on their own. The bottom line is: Going into 2024 in the new regime, we want to put money to work. We believe investors should take a more active approach to their portfolios and be deliberate in taking portfolio risk.

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