Houze Song

I don't see there's a fundamental tension between pursuing both initiatives, that they can, on the one hand, just...

For example, either through providing more income transfer to the household or other means to boost the overall economic growth as well as job creation.

And on the other hand, they can continue to fund those manufacturing initiatives.

There's really no fundamental tension between those two initiatives.

So the surprise is really not that they are doubling down on manufacturing.

The surprise seems to most people, myself included, is that they continue to be very reluctant

to really to stimulate the economy, to reflate the Chinese economy.

I would say in terms of investment implications, one is really the, I would say the most clear implication is the relevance for the Chinese equities.

Basically, since late 24, that Chinese equities has enjoyed pretty solid rally that the equal weighted A shares has been basically up by close to 50% since late 24.

And in the meantime, the curious thing is that the fundamentals of corporate earnings has not improved much.

So as a result, basically what suggests the much more expensive valuation, the PE ratio of Chinese equity indicates that investors have taken a categorically more optimistic view about the Chinese equity.

the outlook of the Chinese economic future.

I think, but the next step question is really that whether the coming year, the Chinese economy performance can validate or disprove this, the current quite optimistic expectation investors already press in.

Here I see really kind of like risk or tensions between the fact that on the one hand, the Chinese government continue to be very reluctant

to stimulate the economy.

And on the other hand, the Chinese equity is being at a really historically high valuation level.

My pleasure.

Thank you.