Notes on China

Bearish:

• $CHINAEQUITIES - Chinese equities have been performing poorly for an extended period, indicating a bearish outlook for the overall Chinese stock market.

  • “And even if you somehow make it to the public markets, Chinese equities have been performing terribly for years.”

    Dwarkesh·33:45
• $CHINAVC - The Chinese venture capital ecosystem faces significant challenges, including uncertainty in fundraising and government intervention, making it a risky environment for investors.

  • “Even if you build or invest in something great, there's no guarantee that your company will be able to raise the next round. And even if you do raise again and succeed, the government might randomly cancel your IPO.”

    Dwarkesh·33:30
• $CHINATECH - Chinese tech companies, particularly in the AI sector, are facing significant capital constraints compared to their US counterparts, potentially limiting their competitiveness and growth.

  • “The biggest surprise from talking to Chinese VCs and researchers at their AI labs was how capital constrained they felt. For example, Moonshot AI, which is one of China's leading AI labs, raised $1,000,000,000 at a $3,000,000,000 valuation. Meanwhile, just xAI's new cluster in Memphis alone will cost 3 to $4,000,000,000.”

    Dwarkesh·32:15
• $CHINAEDU - There's a significant mismatch between the education level of Chinese youth and available job opportunities, leading to potential issues in the labor market and education sector.

  • “There's plenty of menial jobs that are available, but today's educated youth who have gone through high school and college just won't take the low skill positions that their parents and grandparents did. So there's a real shortage of the high skill jobs that would actually match their education and aspirations.”

    Dwarkesh·24:15
• $CHINARE - China's construction boom appears to be over, suggesting a potential downturn in the real estate sector.

  • “The great construction binge is indeed over, it'll be a shame that China's infrastructure was built out during a period of particularly uninspired architecture.”

    Dwarkesh·9:30