At the 25th China Private Equity Annual Conference held in Shenzhen from December 2-5, Chen Wei, Chairman and Founding Partner of Oriental Fortune Capital, delivered a keynote speech titled "Investment Trends: Seizing the Era."
Chen Wei noted that despite recent market consolidation around 3800 points, unprecedented policy support is driving China's stock market upward. "Since September 24, it’s evident that multiple government departments are actively supporting the stock market and direct financing," he said.
He emphasized the growth potential of China’s stock market, citing Warren Buffett’s index: while U.S. stock market capitalization stands at 230% of GDP, China’s is only 87%. "A logical recovery to 150% of GDP is a reasonable target, especially given technological advancements. From this perspective, 4000 points might just be the beginning—we may never see 3000 points again," Chen stated.
**Key Projections:** 1. **GDP Growth**: China’s GDP is projected to surpass the U.S. by 2037, reaching $18 trillion—an increase of $15 trillion from current levels. 2. **Market Expansion**: China’s stock market, currently valued at ~¥110 trillion, is expected to add another ¥100 trillion in market cap, driven by sectors like AI. 3. **Tech Giants**: The era of Chinese tech giants is dawning. While Tencent ($770B) is China’s largest firm, the U.S. boasts ten companies above $1 trillion. However, China’s Sci-Tech Innovation Board has already spurred a 33% rise in firms with ¥100B+ valuations.
**AI’s Role and Market Dynamics** Chen addressed concerns about an AI bubble, comparing it to the early internet era. Despite recent volatility (e.g., NVIDIA’s 13% drop and科创50’s decline), he argued current valuations (28x P/E for U.S. tech leaders vs. 60x during the dot-com bubble) suggest no overheating.
AI infrastructure investments ($1.4T by 2025-27) and data center expansion ($5-7T globally) underscore its transformative potential. "AI’s commercialization is still nascent, but its long-term impact—like the internet’s—will far outweigh short-term fluctuations," he said, citing Microsoft, Apple, and Amazon’s post-bubble growth (8x, 520x, and 190x, respectively).
**China’s Innovation Ecosystem** Chen highlighted China’s robust innovation landscape, backed by policies like the "15th Five-Year Plan," which prioritizes quantum tech, biomanufacturing, and 6G. "The best opportunities lie in China’s market and tech-driven growth," he urged, advocating for all-in bets on Chinese innovation.
**Stock Market Outlook** With M2 twice the U.S. level but direct financing at just 1/8th, China’s equity market is poised for expansion. "Property’s dominance is fading; stocks and primary markets will absorb capital," Chen said, noting policymakers’ pro-market stance since late September.
**Conclusion** Chen closed with a call to action: "This is an era of miracles, and China is its epicenter. Invest relentlessly in innovation—don’t miss the smartest entrepreneurs."
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