Filtering Daily China Developments Through a Long-Term Lens

Hi, this is Li Chen Ren, director of modern alpha western tree ETFs. Welcome to China of tomorrow podcast series where we navigate China, India, Japan and the broad emerging markets with members of western tree and other industry leaders. Hi, today is April 13th, 2026. Uh we usually record on Monday and uh you'll hear us first thing on Thursday and the reason I mention this is because dayto-day there's just so many different headlines in what's happening around and um I feel you know um but I think from our point of view with China you just need to like remember the some of the fundamental things then it's easier to look at the headlines. So anyway, um probably starting with domestic u I think in the last couple of days um the Shanghai's secondary housing market was seeing some recovery with trans trades um more than 30,000 uh transactions. That's usually a good news. But at this point, I I still, you know, caution somewhat on getting u too positive on China's uh real estate market because mainly because Shanghai is um is a special city in China. It's like a New York City. Uh it's not just the New Yorkers who live there. There are almost other welloff people in other provinces. um if they're very well off they usually will have uh some place in Shanghai. So it's um it's it's a global market as well. I think people outside uh China particularly for the ones who have as you know Chinese ethnicity um generally may buy in Shanghai or um Beijing. uh now nowadays it's also moving into provincial capitals like Hanjo and Chun you know Chandu or Chongqing or Tenjing but again I would say yes the I think the speed is slowing down in terms of the price is still going down uh somewhat but having higher transactions is generally good news but I wouldn't um get this to be a you know a bot I mean up of Chinese real estate u I will also be traveling to China. Hopefully the air tickets price is not too high. Um which um during the summer and I'll report back you know what I see there. Um the other thing I think in China headlines uh again I try not to um focus too much on Taiwan news because I feel people has this you know very high u thinking on what happens in Taiwan has to do with what you know Taiwanese headlines are obviously it's important but I think ultimately it's US and China that decides uh the I hate to say this but decides the trajectory of what's going on in Taiwan. Um, but one of the really big local news I think it does worth uh mentioning is that uh Taiwan's opposition leader chairwoman uh Miss um Mrs. or miss she is married um in ch in English I think it's the translation for her um she went visit mainland which is quite a risk-taking behavior because everybody was worried that you know and usually the nationalist party which sometimes is called KMT party as well versus the DPP party uh in Taiwan um they were the party that lost to the communists and went to Taiwan. They have been losing political power and they're trying to win back in 2026 midterm Taiwan election and then 2028 presidential election. Um so generally it's considered risky to go to mainland because it's seen as um kind of you know kissing up to the mainland but actually I think she was a she was quite a daring person. uh she originally was uh DPP uh she was for the other party and then she switched parties and now she's chairman chairwoman of this the party and um she went to China she went to see Suning which is the grave of Sunen which is you know considered the guy who got rid of theQin dynasty in 1911 established China as the first republic uh in Asia which not many people know that um actually you know people always think about China

as communist but actually China is the first uh republic now there are other disputes whether it's truly a first republic but I think it's generally historians agree that the first republic in Asia um from 1911 so she went there and then she went to Shanghai visited did uh companies like Muan met the political leaders and then she went to Beijing and met with President Xi and uh one thing that stands out is like she's 5'11. So President CH president Xi is she's 5'10. President Xi is like 5'11. So when you see Shin standing next to um President she even though she's in flat shoes they look very uh tall. Um I think uh it is a success. Um I no matter how much people want to I think the DPP party want to paint her as like colluding with the communist but it is a success because she wants to manage this and she's not running for office. Uh so she's trying to get the you know the people to see the KMT party as a party which can bring peace uh to the Taiwan state. So I think at this point it is a success. Uh even though ultimately it's a US China that's going to um decide and actually I kind of joked on Twitter that I'm not going to wasting my time on Taiwan related news anymore because there's just so much I have to pay attention to you know from our factory research and currency research. And um I think in some way it is true. Right now a mainland uh strategy to Taiwan has changed somewhat. Uh it already kind of realized that you know it's not going to like depending on Taiwanese to change their mind is probably not going to work. what's going to likely work is China working with the US directly and then see whether it can um get something out of you know US whether US can change some mind now if it doesn't change the mind then we'll see um you know so this is fluid but in the next one year or two I think there is no um the there is a very small risk of Taiwan which I've been keeping same for years. Uh so given that there's so many headlines, I'm probably not going to spend as much time on Taiwan. Um and then this brings us to another political event. I think in Hungary, uh there was a change of president overnight. Uh the one who getting out of power is um friendly with China. But I think a lot of people kind of uh jump into conclusion too fast. They saying that oh because China's favorite candidate is lost and then the relationship with China was sore. I think that's a misread of what China means to a lot of countries nowadays. What China means is business is uh um bring investment. China is willing to invest in countries like uh Spain or Hungary when the government is generally a bit more friendly with China. Um so I don't think uh China will necessarily uh you know hurt. Um this is also when the Iran war started many people instantly say China will hurt but I think now people realize that yeah China will be hurt but not necessarily hurt more than the other countries. Uh so I think uh again if you have a general framework of China that's generally on target then for a lot of these headlines you won't be you know you'll have a quick read on the headlines uh and turn out to be better hopefully. So back to the Iran war I think you know we all know about the blockade uh of President Trump. Um I think from China's point of view it did not really want to get involved. Uh there are headlines about you know President Trump says if China sends weapons to Iran there will be 50%. I think a lot of these is really the so-called fog of war information. Both sides are using uh headlines to do media control. uh so these news are not necessarily news per se it's more about shaping the political opinion so I think uh for people like us who are ordinary person we have to be very conscious that

in some way you don't want to be brainwashed and um I know people usually think about China engaging in brainwash but what people I hopefully know is that every country uh engage in these kind of information war and try to shape the public opinion for the benefit of the politician. Um now some people don't like the politician and then they tends to overreact a lot which I think neither that or the other way is is a good way. Usually you want really pay attention to policies like just like President Trump, you know, people have strong opinions about him, but a lot of his policies uh does have significant impact and you can kind of back out what he is doing right now like what he wants. Um and similar to China um the party obviously engage in uh propaganda or PR domestically and outside China as well but ultimately it's a very resultoriented entity. It wants to stay in power uh forever. Um so it's trying many different things. So their positions um can change. So I think uh you know if you have that right then you generally um can get a slightly better China read than a typical person who is very focused on you know the politician while the focus really should be on what policies in China is being implemented particularly in the lower level. Um so these are mostly these headlines. I think ultimately China equity again we said this many times just take a look you know even from um the KMT chairwoman from Taiwan her she visited two companies uh Mayan and uh Xiaomi unfortunately their stocks hasn't you know done very well uh and they probably not the leading edge um but they are generally doing well at both companies um and ultimately It's the business side and China right now is really one of the only country that is competing with us across the board on every industry. Um you know when you look at um the NASA uh launch to the moon um it's very moving. I hope you watched it too. I was uh very move moving with the astronauts, you know, very brave and also um within the Chinese American, you know, community, there are a lot of Chinese scientists who work at NASA. So, extra, you know, kind of proudness. Um I think ultimately you see that even in space, China is also competing very uh vigorously. Uh China also has a moon um has a sites toward going to the moon uh to the similar agenda. I believe it's 2030 or 2030. I mean it's before 2035. That's what I at least that's the you know public information. So I think at this point um having some China equity definitely is a good hutch. Um on the other hand it is a you know slightly higher risk. Um but even um over the you know over the years you can see Chinese uh equity has done relatively well in this very volatile um environment. So I think it definitely speaks about you know the I wouldn't say the rise because I don't think China has you know kind of achieved the on par but China is trying to achieve what you know Japanese equity had which is to you know to convince people it's investable and uh to convince people that it ultimately uh US China can avoid the for. So I think at that point that's still my baseline as well. Okay. Well, thank you and uh thanks for listening and uh give us feedback and we'll bring better analysis in the future.