The impact of an aging population has taken a toll on China’s economy. Industrial automation and robotics could be the solution.

We believe that China is at the beginning of a structural shift thanks to the country’s policy support, demographic trends and technological progress. Furthermore, the ongoing trend of domestic substitution will likely provide a fertile breeding ground for local champions to be born and thrive – and our portfolio companies Shenzhen Inovance Technology Co., Ltd Class A (“Inovance”) (0.64% of Strategy assets)1 and Shanghai Baosight Software Co., Ltd. Class A (“Baosight”) (2.06% of Strategy assets)2 are a great example of that. These tailwinds make it an exciting time to invest in the thematic,3 and a deep understanding of the policy and technological landscape will be crucial for stock picking.

China’s Aging Population

The largest existential threat facing China is its declining population – the impact of an aging population on the country’s economy has the potential to be highly unsavory and should not be ignored by global investors. Industrial automation and robotics are the solutions to China’s aging population.

Problem – China’s population growth rate has decelerated to its lowest point in six decades. A higher cost of living, delayed marriages and a lack of social mobility are often cited as contributing factors.

Solution – Welcome to the world of China’s industrial automation! The country views industrial automation as a key component in its aging population playbook. It is no surprise that China now represents a staggering 30% of global automation, and continues to expand its role from a “final assembler” to one with a comprehensive end-to-end supply chain. Therefore, we believe that China is at the beginning of a structural shift thanks to its policy support, demographic trends and technology progress.

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