AI Rally Threatened by US Monetization, Cheap Chinese Competition
Exactly. I think there are only two things that could derail the ongoing AI rally. The first is US AI itself—if monetization ultimately fails to justify the economics behind the massive capital and infrastructure investment. The second is China AI—if it continues to demonstrate that comparable levels of intelligence can be achieved at a fraction of the cost.
Moutai Slump Highlights China Consumer Upside Amid Recession
Today, the stock price of Kweichow Moutai, one of China’s most iconic listed baijiu producers, has fallen below the lows reached prior to the September 2024 Politburo meeting, following two weeks of intensified selling pressure. Moutai’s capitulation is yet another...
Iran Emerges Central in US‑China Strategic Bargaining
Araghchi’s visit to Beijing on May 6—just a week before the Xi–Trump summit—signals that Iran may have moved to the center of US-China strategic bargaining. There is a real possibility that the mid-May meeting will not only further stabilize Sino-US...
Non‑profit DeepSeek Hampers China’s AI Race
I’ve long argued that the initial decision to keep DeepSeek as a non-profit lab was a strategic misstep—not only for DeepSeek itself, but for the broader Chinese AI ecosystem. The AI race is, in many ways, an arms race: it...
US Chip Export Controls Fuel Chinese Industry Growth
Sebastian offers a calm and objective assessment of the US chip-export controls on China. While whether the rule is working or not remains a debate in Washington, the consensus among Chinese chipmakers is that US restrictions constitute the single strongest...
Inflation, Not Deflation, Threatens Sovereign Fiscal Stability
Basic Econ 101: Countries don’t spend themselves into bankruptcy in a deflationary environment. They run into trouble when inflation is rising and central banks lose control of the long end of the curve.
Allies Must Rethink Strategy If Security Can't Be Outsourced
This is something that all US allies will have to think about in the year ahead. If security cannot be fully outsourced, then diplomatic posture, economic strategy, and even capital allocation must adjust accordingly.
China Likely Remains Cautious on Iran Mediation, Not Catalyst
Will Beijing throw its weight behind Iran negotiations? That is a key question we tried to answer in our China Macro Watch report released yesterday. While markets and diplomats anticipate a more proactive Chinese role in mediating the Iran conflict,...
Traveling East Coast, Open to China Economy Discussions
Dear friends, I will be in DC, NYC, Boston, and Toronto from Apr 14–22. While China has taken a back seat amid the Middle East focus, that may change in H2 if Beijing's policy pivots accelerate. If you’d be interested in meeting...
China’s Chance to Cement Great‑power Status Through Diplomacy
While Beijing is likely to remain cautious and avoid being drawn directly into the conflict, the situation nonetheless presents a strategic opening for the Chinese leadership to deliver on its long-standing pledge to “inject stability” into the global system. Should...
Cheap Drones Could Neutralize US Naval Dominance
If a few thousand low-cost Iranian drones can effectively deter the US in the Strait of Hormuz, what does this chart below tell you? https://t.co/pC6HUG1X26
China's Restraint Defies Expectations Amid US Middle East Focus
For those China hawks who insist that Beijing is poised to invade Taiwan, a simple question is worth asking: why has it not acted when US military focus is tied down in the Middle East and American munitions stockpiles are...
Iran's Strategic Blunder: Chinese Ships Reroute Before Hormuz
Onshore media just reported that: "Two container ships under China's COSCO Shipping Lines have turned back toward the Persian Gulf and have not yet passed through the Strait of Hormuz." I think this is a strategic mistake by Iran.
Dollar Weakness Stalls Rally, Triggers Gold Collapse
This is perhaps the reason why the US dollar has failed to rally meaningfully amidst today's market carnage. It's likely also the key reason behind the collapse in gold prices.
China Won’t Extend Formal Security Guarantee to Iran
Based on my understanding, Beijing will try its best to mediate the conflict for the sake of its own economic interests, but the probability of it extending a security guarantee to Iran is extremely low. China’s foreign policy remains fundamentally anchored...