Fund managers diary

James Chong is the manager of the Martin Currie China fund. His diary runs from September 6-11.


After a 10-hour flight, a long queue at Beijing Airport is the last thing I need. But the queue moves quicker than expected, and I soon head into the city to meet Sun Liang, one of our Shanghai-based analysts. Autumn is the best time to visit Beijing – avoiding the humidity of the summer, the winter snows and the dust storms of the spring. This time, though, our first meeting is not in Beijing. Tomorrow’s destination is Baoding, an industrial city in Hebei province – an area best known for some spectacular stretches of the Great Wall. But in the meantime, I am hoping to get over jetlag by staying awake till nightfall. It is a challenge (not helped by some excellent food), but I make it in the end.


Sun Liang and I take the train to Baoding. We head into the ’real’ China – the kind of farmland that looks as if it has not changed for centuries. Baoding itself used to be famous for ’Baoding balls’, the pairs of metal globes that many Chinese use to relax the muscles in their hands. These days, the city is an important hub of China’s alternative-energy industry. We visit Yingli Green Energy, which makes photovoltaic modules. (article continues below)


Back in Beijing, I have a packed day of meetings – Hollysys, Sulon, Goldwind and Longyuan – plus a meeting with a government official with responsibility for renewable energy. The schedule provides much more food for thought. Afterwards, I stay up far too late discussing the meetings with Sun Liang – forgetting that we have an early flight south in the morning.


The next stop is Changzhou, Jiangsu province, where I pursue the alternative energy theme with visits to JA Solar and Trina Solar. In the afternoon, it is a two-hour train journey to Wuxi to see Suntech Power. The biggest surprise from these visits is the scale of the demand for solar-energy products – both from China and from overseas. Global solar-energy capacity has doubled since 2009, and the companies tell me that they expect 2011 to be another strong year, as falling product prices stimulate demand still further.


It is another day of company visiting in Jiangsu province – this time in Suzhou, where I meet Canadian Solar. Suzhou is a beautiful city; with its stone bridges, gardens and canals, it has preserved its ancient character. Mind you, when it comes to the company visit, one industrial estate is much like another.

As there is just the one meeting, I am able to reflect on what I have learned so far. Besides the specific opportunities in renewable energy, I have been deeply impressed by how quickly Chinese companies are moving up the value chain. Many of the companies I have seen are important global players in a highly technical field. It is far from the cliché of Chinese industry as just assembling other people’s components in sweatshop factories.


I round off my trip in Shanghai, where I have five more company visits: Comtec, Renesola, LDK, GCL Poly Energy and Solarfun. After meeting all these companies, I have gained a much deeper understanding of China’s alternative-energy industry, its development and the risks and rewards involved. It already feels like a long trip – not least because of all the intercity travel. But tiring as it is, this sort of on-the-ground research is invaluable to us – and all the more so in an under-researched market like China. I am confident that the trip has given me a wealth of knowledge that I could never glean from broker reports.