On the other hand, stock selection in the consumer discretionary and real estate sectors detracted from relative performance. The portfolio’s holding Midea Group Co. (SZSE:000333, Financial), a domestic demand-oriented consumer discretionary company, suffered from weaker performance given concerns about rising raw material prices compressing margins. However, we believe that consumer demand still remains resilient in China, which will likely facilitate the ability to pass on prices in the near future.
From Matthews China Fund (Trades, Portfolio)'s second-quarter 2021 commentary.
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