Alice Han

He was the head of China.

He was a computer science graduate from Nanjing University of Science and Technology, worked for HP and Dell before NVIDIA, and now is a newly minted billionaire along with a lot of his other colleagues.

So we'll see whether or not he can be the new Jensen Huang of China.

But certainly, I think we agree, James, that there's a lot of government backing behind this guy, as well as the other companies that are coming up behind them.

Okay, we'll be back with more just after a quick break.

Stay with us.

Welcome back.

As we head into 2026, one of the biggest open questions in global markets is whether China is finally ready to let the renminbi strengthen in a meaningful way.

On paper, the currency is deeply undervalued, and historically so, by as much as 40% to 50%, depending on the metric you use.

And economists inside and outside China say a stronger yuan could boost household spending, ease trade tensions with the rest of the world, and help Beijing pivot away from its export-led growth model.

But politically, Xi Jinping's team is caught between wanting global credibility for the yuan and wanting tight control over the exchange rate at a time of deflation, weak domestic demand and a fragile property sector.

Just to walk this back to first principles, the reason a currency's value matters relative to other currencies is that it decides the trade competitiveness or cheapness simply relative to other currencies.

So if China...

and it has been, devaluing its currency relative to other currencies around the world, it effectively is making its good cheaper relative to other goods around the world.

So that's why this currency issue remains salient when we're talking about trade imbalances.

You know, we've done some internal calculations over the last few years, and it seems that the currency could be devalued by as much as 20% if you are accounting for internal and external dynamics in the balance of payments.

We can go into the nitty gritty of the balance of payments and why they diverge so much from the customs data that the Chinese government officially present.

But I found compelling Brad Setz's point, and Brad Setz is really someone I rate highly in this space, based on the IMF data, we could see the currency being devalued between 18 to 30%, so as much as 30%.

And the reason this matters is because it is fundamental to China's trade surplus with America.

with Europe, with many countries in the rest of the world.