He Xun Investment Advisor Yu Rongzhuo: Why would foreigners be confident about the future of our assets?

In the current market environment, a deeper question is worth considering: where does our confidence in the future rise of Chinese assets come from? The fundamental premise is having confidence in China itself.

Recently, more and more foreign institutions have started to call for “buying Chinese assets,” and there are even various rumors and jokes circulating. We cannot be certain about the accuracy of these messages, but the emergence of such phenomena must be backed by logical support. People do not easily believe fabricated stories, especially mature investors. So, what are the clues behind these voices?

The most direct validation comes from comparison. From a global perspective, Chinese assets have shown relative resilience. Amid recent turmoil in the Middle East and the widespread pressure on European and American stock markets, Chinese assets have experienced relatively smaller declines. This “anti-fall” is not accidental but rooted in deeper reasons. Some might say it’s because heavyweight stocks like the “Three Oil Giants” are supporting the market, but relying solely on a few sectors cannot fully explain the overall performance. What truly deserves attention is the structure of China’s economic system.

China’s economic structure is the most solid and comprehensive. Just like a student aiming for good grades cannot rely solely on excelling in one subject but needs balanced development across all subjects. China has strong competitiveness in several key areas. For example, in the power industry, China’s infrastructure and supply capacity are among the world’s leading. The U.S. is currently facing power shortages, and Elon Musk has publicly expressed envy of China’s power system. Even in the chip sector, although there is still a gap compared to the top global levels, progress is significant. The 7-nanometer process has achieved stable mass production, and 5-nanometer technology is also advancing, easily meeting most current computing needs. We do not need to pursue first place in everything; meeting our own needs is what matters.

From an economic structure perspective, China has a solid foundation on both demand and supply sides. On the demand side, China boasts the world’s largest consumer market, with a population of over a billion, which determines the breadth and depth of domestic demand. Even during economic adjustments, consumer behavior becomes more rational, but this healthy pattern itself is a long-term advantage. On the supply side, China’s industrial system is complete, with resilient supply chains and leading global export competitiveness. Regarding resources, although some energy sources depend on imports, China has effectively secured supply security through extensive trade partnerships and multi-channel arrangements.

This structural health and resilience are the fundamental reasons why Chinese assets can remain attractive in the medium to long term. We do not rely on short-term events or external fluctuations to prove ourselves. Instead, we base ourselves on our own economic foundation and development potential, gradually accumulating advantages. When market sentiment stabilizes, these structural advantages are likely to translate into upward momentum for assets. Understanding this is crucial for assessing the long-term value of Chinese assets.

(Edited by: Zhang Yan)

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