(Yicai) Dec. 11 -- With China’s technological development just getting started and attractive tech stock valuations compared with the United States, they are Fidelity International’s main focus in the country, according to its global head of multi-asset investment.

“Our main investments at the moment are in the China tech area more than anything else,” Matthew Quaife said in a recent interview with Yicai. Fidelity also invests in Chinese credit bonds, he said.

China has the capability to capture new technology trends and drive their development, while its tech companies can go “a lot further,” Quaife said, adding that “there's incentive to allow them to be profitable as well, in terms of making them internationally competitive.”

Quaife is taken by how quickly Chinese people adopt new technology. “It amazes me, even when I’m down near the Vietnamese border and the mountains, just how digital the economy is,” he said. “I’m walking in the mountains and someone offers me some fruit, and I pay with WeChat.”

Quaife was also impressed by an app he used on a driving trip from Kunming in Yunnan province that told him when traffic lights were going to change, noting “how good those apps are and how adaptive everyone is to it.”

Quaife noted that even in rural areas, “it's very hard to find a car that isn't an EV these days. And so China has the ability to pick up on new trends and then move with them.”

He mentioned that Fidelity invests in other major economies in the Asia-Pacific region. “Both Korea and Japan have governments that are implementing policies that are quite friendly to the stock market,” he said, adding that valuations are particularly attractive in South Korea.

“Japan, we think can be a good story for 2026. If we were accessing Japan, we would invest through the mid caps,” he said, while noting that there are risks in the country’s bond market.

Regarding gold, Quaife noted that its rise to record high prices has also brought volatility, but he believes this is temporary. Gold remains attractive because of its hedging function in adverse times, and this is especially relevant amid recent uncertainty over government bonds, which has made gold one of the few high-quality safe-haven assets.

Should negative events befall the global market, then “gold could actually go significantly higher,” he said, noting that debt levels in developed markets are very high. “If you look at how much debt levels have increased since the financial crisis back in 2008, they're really quite exceptionally high.”

Silver also offers investment potential, he said, but it is important to manage risks effectively. Fidelity has made some silver investments this year, but the metal is more volatile and carries a risk of decline, he said, adding that “no precious metal can replace gold.”

Editor: Tom Litting