According to Derrick Irwin, Co-Head of the Emerging Markets Equity Team at SpoutingRock Asset Management, while recent geopolitical tensions have unsettled global stock markets, the structural factors driving the bull market in emerging markets persist. He expressed a positive outlook on the Chinese market, highlighting the significant potential of its domestic artificial intelligence (AI) industry. Irwin acknowledged the difficulty in predicting the duration of the Iran situation but noted that the two primary drivers for emerging markets have shifted. Structural factors, such as improved corporate earnings and more resilient economies, continue to support the market. However, cyclical factors, including a weaker US dollar, lower inflation, and anticipated central bank rate cuts, are currently stalled. He expressed concern that these cyclical challenges could evolve into structural issues, with the potential return of inflation and higher interest rates posing headwinds for emerging markets for the remainder of the year. Irwin is optimistic about China's development, specifically pointing to excellent opportunities in fields like AI. He explained that China's AI development follows a full-stack model with relatively lower capital expenditure. Some major tech companies are developing their own models and chips and integrating them directly into their businesses, which can enhance profitability and returns in real-time. While some market participants hope China will replicate the US's AI development model of recent years, Irwin does not foresee a similar scenario. He contrasted the US focus on achieving ultimate technological supremacy, where large companies aim to create the best models and win the race, often with less emphasis on return on investment. In China, however, companies plan for expansion in a more commercial and sustainable manner, focusing on leveraging AI to improve their businesses while carefully weighing return on investment. As a long-term investor, Irwin stated a preference for the latter approach. Additionally, he is monitoring China's consumer sector, noting that while a significant rebound is not yet evident, he anticipates a eventual recovery in Chinese consumption, which would benefit related stocks. He also mentioned that the intense price war in China's instant retail and delivery sector is likely nearing its end, expecting to see competition and pricing normalize. This environment should allow stronger, previously pressured companies with dominant market positions and genuine competitive advantages in logistics to emerge and benefit from reduced pricing pressures.