Transcription
Hello everyone, welcome to Stock Market C View. With me are Mr. Shi and Hao De, two guests we've mentioned a few times before.
The US President's visit to China has indeed materialized. Trump has announced that he will pay a state visit to China from May 13th, which is today, the day of recording, to the 15th. Previously, the focus was on what political discussions he would have with China. However, recently, the media has been more concerned about which representatives are accompanying Trump on his visit to China. The delegation includes tech giants like Elon Musk and Tim Cook. But many have noticed that Jensen Huang was not invited. However, as of the time of recording, the latest news is that he will also be boarding Air Force One to visit China. Mr. Shi, do you think this is a situation where Jensen Huang was only invited at the last minute? Or is it that AI or chips are no longer of significant importance in US-China relations, or that the US does not want to play the AI card?
I believe it might be that our news is delayed, and it's not necessarily a deliberate arrangement. Jensen Huang should have a certain influence on both the US and China. Many companies in China need to purchase NVIDIA chips. However, it seemed that the H200 was not available for purchase before. The government apparently did not officially allow some large companies to buy them. Are there other private channels... because Chinese companies can buy from NVIDIA, and I haven't heard that the whole country is prohibiting it. It's just that some large companies have been told not to buy, which is an individual directive, not a comprehensive one. So there should be some inflow. I heard from a friend... I don't know if it was from you, that US chips of different brands and models are now easily available in mainland China. One is that the US government's restrictions are not very tight, meaning they are loosening up. If you want to buy, you can. The Chinese government also should not prevent Chinese companies from buying US chips. Not buying the H200, I believe, is more of a gesture, one of the bargaining chips. After not buying the H200, I saw Jensen Huang was also anxious, lobbying the US government everywhere not to ban it. If it's banned, he will suffer losses. What I produce, I could sell a lot, help the US earn more money, and exert US influence. If you don't let me buy, it can only gather dust in the warehouse. In reality, whether Jensen Huang is acting for his own benefit or considering China's interests, he has always wanted the US government not to be too strict on this issue. I believe China's own stance is that it believes it should be partners with the US, not adversaries. If we are partners, we should share what we have and what others have. What I don't have, you have, so sell some to me. If you are willing to do this, I will be more flexible on rare earth and other issues. Ideally, this visit will de-escalate the adversarial situation between China and the US, increase the space for win-win cooperation, which is beneficial to both countries and the world.
Regarding the domestic chip ecosystem, is it dominated by domestically produced chips, or are there also many foreign chips? First, a data supplement: chip controls were relatively strict from 2023 to 2024. Therefore, NVIDIA's stock price was significantly affected because chips could not be directly sold to mainland China. Of course, during this period, some NVIDIA chips did return to mainland China. But I think China's own strategic consideration is that it does not want to be overly reliant on external chips. In fact, you can see that for a period of time, the objective situation has shown that domestic technology development chips have not received external chip support. Even if foreign chips can be imported now, I understand that some enterprises, whether state-owned or private, have received a "warm reminder" to try to use domestic chips if possible. This is actually quite good for supporting domestic companies over the past few years. So you can see that many Hong Kong-listed chip companies have experienced explosive growth in recent years. This is also due to practical considerations. If US-China or political relations cause China... in fact, technology is a manifestation of strength. If you continue to rely on external sources, it will easily lead to the control of domestic technological development. Strategically, it's a bit unreasonable. Of course, China's chip or hard technology development is now progressing very rapidly. But it's still an objective fact that for a period of time, Europe, America, Japan, and South Korea have had more understanding and control of the industry's technology. Many people may not understand this. It's not just about the technology itself, which can be written in a paper and come out. It's about the accumulation of various experiences in the manufacturing process. These are areas where others lead. China wants to do this, setting aside some objective conditions for developing this industry, perhaps what people have heard before like lithography machines, materials, etc. But now, I think the situation is that while foreign chips and hardware can continue to be imported, the general direction domestically is to quickly narrow the gap. Don't say others stop... It's best for everyone to be friends and complement each other. But this is a two-way street. Even if China wants to deal with you politely, sometimes Trump acts erratically, and you can't do anything about it. So I think China's national policy is like this. For China's domestic semiconductor or the entire hard technology industry, it will be beneficial in the future. Now is a window period where technical exchanges are easier. But will there be any breakthroughs in this US-China talk? I think China's attitude is like "if we have it, it's good; if we don't, it's no big deal."
Mr. Shi, what do you think about the US President's visit to China, with so many tech giants accompanying him? Will there be any negotiations? I personally feel that the US attitude towards China has changed. During Trump's first term as president, his Vice President, Pence, gave a speech on China policy that was a turning point. It clearly explained why the US was targeting China, which was the Thucydides Trap (slip of the tongue). He believed that in this world, if there is a new and rapidly rising power, it will inevitably conflict with the existing hegemonic power. Two tigers cannot share one mountain, and most conflicts end in war. Consequently, the US concentrated its efforts on suppressing China. The method of suppression, he said, would be to use the same approach as against the Soviet Union: decoupling. Give them nothing, prevent them from accessing the outside market, prevent them from using outside capital, prevent them from accessing new technologies. In short, complete decoupling, letting them slowly die. Initially, they intended to do this, but as soon as they acted, they realized something was wrong. It turned out that cutting ties would also hurt them significantly. So their recent rhetoric has changed, saying they don't want to completely decouple from China. Also, as a US national leader, Trump often says, "Xi Jinping is my good friend," and "I can resolve any issues with him." This shows that the US sees that China has become such an influential economy with political influence. Therefore, if the US does not reach a consensus with China on certain matters and handle them together, they will encounter obstacles. So their attitude has changed. Their changed attitude has led to a change in attitude among some of their US companies and US funds. That's why Hong Kong, once mocked as a relic of a financial center, has suddenly revived. You see investment banks and funds renting prime office space recently, and they are spending lavishly. If the US government's attitude was to kill Hong Kong, would they allow this? Someone must have tacitly agreed for them to dare to do this. So, in reality, I personally believe that the US attitude towards China has changed. If it hadn't changed, and companies saw the president frequently visiting Beijing, they wouldn't be so nervous about returning to the mainland. If the US were targeting China, you would need courage to return to the mainland. So, from the US perspective, it seems they want to mend relations with China. From China's perspective, are they willing to accept this, or has the treatment been too bad previously, making it possible for relations to remain poor?
China's attitude is very clear. Before Trump's visit to China, Wang Yi met with a member of the US Senate and mentioned that China's attitude towards the US is to seek win-win cooperation, not confrontation, and to jointly maintain world stability and peace so that the world can develop well. President Xi Jinping has also said that the US should not bet on China's failure, and China should not bet on the US's failure. They should not constantly watch others die, but rather look for areas of cooperation where both sides can benefit. If you undermine me, and I restrict you, the development of the entire world will be slowed down.
Mr. Shi just mentioned Hong Kong's revival. I'll add some numbers. In fact, recent economic data has been very good. Hong Kong's GDP growth in the first quarter of 2026 was 5.9%, the highest in nearly five years. Many major institutions have also raised their GDP growth forecasts for Hong Kong this year, with the most optimistic forecast being 4.8% year-on-year. Do you both think that Hong Kong's trend, as Mr. Shi just said, due to external relations and even the improvement of China's economy, can continue?
The momentum is good. If you think about Hong Kong's economy, it's not difficult to understand. The very important financial services industry has started to improve in the past one or two years. This is well reflected in everyone's participation in the stock market or IPOs, which we see in the newspapers every day. So financial services are clearly booming. Some sectors have not yet caught up, such as retail and tourism, but they are also improving. The latest four retail sales figures are all good, with double-digit growth reaching 12%. Of course, one very important reason is the "one-for-one" car purchase policy, where people want to buy before subsidies end, which has a slight one-off effect. But overall, it's good. Overall retail is improving. Secondly, there's the wealth effect. The property market has also become much more active. When the property market is good, the surrounding wealth effect, sentiment, or even actual renovations, real estate agents, etc., all contribute to the overall feeling that it's easier to make money. When you feel it's easier to make money, you spend more freely. This is what we've seen this year. For example, we're seeing more traffic jams on the roads. When I came up from Canton Road just now, I saw people queuing in front of luxury stores, and some police officers had to manage the queues or traffic. These all indicate a positive trend. Hong Kong has clearly started to improve during this period, compared to the past one or two years. As you mentioned earlier, the macroeconomy of mainland China has started to stabilize a bit. Hong Kong's economy is highly integrated with the mainland's economy. So, now that the mainland is doing better, my friends in wealth management say that some mainland bosses are rethinking many things, whether it's in terms of fund allocation or demand for the Hong Kong capital market. These are all things that I believe will benefit us as the mainland economy starts to move upwards.
Mr. Shi, what do you think about Hong Kong's recent economy? Do you feel it's really booming a lot?
Hong Kong's economy used to depend on the US economy because it was basically exported to the US. But now it heavily relies on the Chinese economy. The Chinese economy was previously dragged down significantly due to problems in the real estate market, causing financial difficulties for local governments, and even potentially delaying salaries for civil servants. However, at this time, the Chinese government invested in "new productive forces," focusing on technology, and the government bet on industries like green energy and AI. These industries have successfully generated new productive forces, and these forces are relatively advanced and competitive. At the same time, it has successfully broken away from its reliance on real estate. Previously, whenever there was talk of real estate overheating, they would suppress it while continuing to rely on it. This time, they have truly been resolute. Besides real estate, many related industries have also suffered. Falling real estate prices have also made people feel that their wealth has decreased, affecting their consumption and investment capabilities. New productive forces have offset these negative impacts. However, the real estate market has also improved recently. The latest round of policies in first-tier cities has begun to have a positive impact. We still have a certain presence in the mainland, so we have noticed that performance from March to May has improved, and it's not just concentrated in first-tier cities; second-tier cities are also responding. Therefore, mainland real estate stocks have also improved. This means that the new productive forces cultivated to offset the real estate downturn have begun to take effect. Additionally, the real estate sector is now also being sorted out a bit. Therefore, I believe China's economic growth in the next phase will be faster. Previously, there were concerns about trade wars and increased tariffs, but as tariffs increased, China's exports continued to grow, and are now growing very rapidly. Even Hong Kong's re-exports are breaking records. Hong Kong's re-exports act as agents for Chinese products, which are marketed internationally. Hong Kong's re-exports are doing well. With good re-exports, the associated financial services needed for re-exports, such as opening LCs (letters of credit), buying insurance, logistics, and shipping, have all been boosted significantly. Therefore, Hong Kong has benefited from the easing of US-China relations and the mainland economy's return to a relatively faster growth phase. It should be benefiting.
Listening to both of you, it seems that the situation in China and Hong Kong is quite good. What are your views, dear viewers, on Trump's visit to China and the recent economic conditions in China and Hong Kong? You are welcome to leave your comments. This segment of our time is up. In the next segment, we will return to discuss China's economic issues in more depth. See you in the next segment.