Sir Niall Ferguson

And there was a general feeling that the big guy doesn't love us and the big guy doesn't get the economy.

and we're all going to move to Singapore, or we're all going to get out.

So this was the kind of conversation 12 months ago.

Now the conversation is, well, he seems to get the message now, so we're actually getting some sensible policy advice out of the two sessions, out of the kind of policy discussion in Beijing, and he loves Jack Ma again, and the rehabilitation of Jack Ma, as well as the fating of Chinese entrepreneurs, including the DeepSeek founders, to send a signal

to the Chinese private sector, the big guy, i.e.

Xi Jinping, gets the message.

We're course-correcting at the macro level, and we're also recognizing that you guys are indeed the rock stars of the Chinese economy.

So this is important because it means that the mood in China has changed.

Now, let me make two distinct points.

Number one, the technology story is unquestionably very impressive.

I can remember meeting Kai-Fu Lee last year in Beijing, and he said, despite the constraints imposed by the U.S.

Commerce Department that restricts China's access to GPUs, the most sophisticated semiconductors, China's going to just do so well, at least at inference, so well at adoption that it will be able to hold its own in AI.

That turns out to be pretty much right.

Yeah.

And so I think there's a big deal here, which is the success of China in not circumventing, but simply overcoming the obstacles put in its way by the Biden administration mostly.

But the second point, which I don't think is getting enough attention, is that it is really hard to turn the macro around in China.

Because consumption took such a hit between COVID, zero COVID going on and on and on, and the crisis in the property sector, households, which predominantly middle-class households save by acquiring apartments, have been rinsed.

Their balance sheets are a disaster.

And it is really hard for the Chinese government to turn that around.

Two really striking things.