Dan Wang on China's Breakneck Economic Growth

Bullish:

• $SEMIS - China is significantly increasing its focus on semiconductor R&D and production, particularly through Huawei's efforts, indicating a potential growth opportunity in the Chinese semiconductor sector.

  • “Huawei was not super big into semiconductors in 2019 in terms of their production, but now Huawei is one of the biggest spenders in semiconductors R and D, and I believe I just saw a Bloomberg piece saying that Huawei's chips are now rolling off the production line.”

    Dan·41:15
• $ENGINEERING - China's leadership, heavily influenced by engineering backgrounds, is likely to continue prioritizing infrastructure and engineering projects, presenting potential opportunities in related sectors.

  • “China likes building stuff because it is made up of leadership that is very heavily engineering pilled.”

    Dan·5:47
• $CHINESEEVS - Chinese electric vehicles, particularly from brands like BYD and Xiaomi, are gaining popularity due to their quality and appeal, suggesting potential growth in the Chinese EV market.

  • “The cameras seem great, and the BYD cars and the Xiaomi cars seem to be also really good as well. People wanna buy these things.”

    Joe·48:24

Bearish:

• $SERVICES - China's focus on engineering and manufacturing may lead to underperformance in the services sector, as the country is not prioritizing services development.

  • “I think that overproduction is kind of endemic to China, which is partly why it's the engineering state. This is what they're really good at. They're just not thinking enough about services.”

    Dan·51:13
• $GERMANMANUF - China's growing industrial capabilities are negatively impacting German manufacturing, particularly in the automotive sector, suggesting potential decline in German industrial competitiveness.

  • “I think that we're already seeing that China is de industrializing Germany. Brad Setzer has great charts on this all the time, especially in the automotive sector.”

    Dan·44:26