Summary of Key Points
This article focuses on "China's opportunities in the midst of global changes," highlighting two main directions: First, the internationalization of the RMB is poised to seize a historical opportunity similar to that of the United States after World War II, as geopolitical restructuring (with the U.S. retreating) creates favorable conditions, supported by China's industrial base and substantial foreign exchange reserves. Second, with AI being described as "the last industrial revolution," China's comprehensive industrial chain gives it a competitive advantage. The article also analyzes current market volatility, attributing it to U.S. dollar policies and recommends that ordinary investors pay attention to undervalued Chinese AI companies (especially those listed on the Hong Kong stock market) and gold. It points out that the U.S. economy is facing risks related to the high duration of its stocks and bonds.
1. The Internationalization of the RMB: Seizing the "Window of Opportunity" Amidst U.S. Retreat
The United States is attempting to reorient its resources back to the Americas, leading to a reshuffle in global geopolitics—similar to the post-WWII situation when Europe was in ruins and the U.S. launched the Marshall Plan to promote the spread of the dollar worldwide. China now has similar opportunities: it possesses the most complete industrial base in the world (capable of producing almost everything from chips to cars) and significant foreign exchange reserves. These two strengths will help the RMB gain international prominence. For individuals, using the RMB to purchase foreign goods or invest in overseas assets may become more convenient, and companies engaged in foreign trade will no longer be as reliant on the dollar, reducing the risk of exchange rate fluctuations.
2. The AI Revolution: Why China's Comprehensive Industrial Chain Will Have the Upper Hand
Ren Zhengfei has described AI as "the last industrial revolution," which is indeed a profound transformation. Unlike the internet revolution that primarily affected software, AI requires massive capital investment (more than 100 times that of the internet). AI relies on data centers, GPU chips, stable power grids, optical communications, and intelligent robots—all of which can only be developed with a complete industrial chain. China has the capability to meet these demands, from mining resources (such as lithium and copper) to manufacturing chips and building data centers, and even creating smart factories. Additionally, China's open-source AI models could potentially change global trade patterns, further accelerating the internationalization of the RMB.
3. Behind the Market Volatility: The Role of the Dollar
Recent market fluctuations are largely driven by U.S. policies. From July to September, the U.S. plans to issue a large amount of government bonds (to borrow money), but interest rates are high and inflation remains stubbornly difficult to control. The Federal Reserve and the Treasury Department deliberately create uncertainty about their policies, directing market attention towards AI and semiconductor sectors. However, most of the volatility has already been released, making this a potentially good time for investors to buy into AI-related assets at lower prices.
4. Opportunities for Ordinary Investors: Undervalued AI Companies and Gold
- AI Companies: Chinese AI companies (especially technology platforms listed on the Hong Kong stock market, such as Tencent and Alibaba) are significantly undervalued. They have stable cash flows and ample computing power (essential for AI development), and many of their investments are generating returns. The current low prices reflect valuation distortions caused by U.S. dollar dominance, which will eventually be corrected.
- Gold: The U.S. dollar's role in global pricing is declining, making gold a more reliable store of value. Although gold prices have dropped at the beginning of this year, its long-term potential is significant as the dollar may become less stable.
5. The U.S.'s Weaknesses: The High Duration of Stocks and Bonds
The U.S. is facing a dilemma: it needs to maintain the stability of both the stock market (which requires long-term investment) and the bond market (which also involves long-term debt repayment). Even for a deity, this would be challenging. Therefore, there is a risk of significant fluctuations in the U.S. stock and bond markets from the third quarter to the second half of this year.
In summary, the article argues that China has the advantage in this global context, with the decline of U.S. dollar dominance creating opportunities for the internationalization of the RMB and Chinese AI technologies. Ordinary investors should consider undervalued AI assets and gold as potential investments.