At the opening of the Shenzhen Stock Exchange 2026 Global Investors Conference in Shenzhen on May 28th, Shan Weijian, Executive Chairman and Co-founder of PAG, delivered a keynote address. The conference's theme was "Capital Markets and Innovation Growth – China's Opportunities Under the 15th Five-Year Plan."
Shan Weijian began by expressing his honor to speak and framed his perspective as an investor, emphasizing that investment decisions hinge on the environment, profitability, and sustainable growth potential. He shared his recent surprise at the advanced state of Shenzhen Bao'an International Airport upon arrival from Hangzhou, noting that AI analysis indicated it was more modern and handled more passengers annually (66 million) than Hong Kong International Airport (60 million), attributing this to its newer infrastructure.
Reflecting on Shenzhen's transformation, Shan Weijian cited his personal experience in 2005 when, representing TPG Newbridge, his firm acquired a controlling stake in Shenzhen Development Bank from the municipal government. At the time, the bank had approximately $20 billion in total assets. Over five years, this grew to $80 billion before being sold to Ping An Insurance, creating today's Ping An Bank Co.,Ltd. (000001). The investment yielded a 15-fold return. He highlighted that Ping An Bank's current scale of $800 billion is ten times larger than when sold two decades ago, exemplifying Shenzhen's rapid development and potential driven by its open and advanced investment climate. He positioned Shenzhen's growth as a microcosm of China's broader development.
Shan Weijian contrasted China's economic standing thirty years ago, when its per capita GDP was lower than India's, with the present day, where China's per capita GDP is five times that of India. He noted that in the early 1990s, the US GDP was 15 times and Japan's 10 times that of China. Today, China's nominal GDP is two-thirds that of the US, and based on purchasing power parity (PPP), it exceeds the US by 30%. He explained PPP by referencing the trend of Hong Kong residents shopping in Shenzhen due to lower prices and high quality, suggesting significant potential for RMB appreciation and strong purchasing power.
Despite this rapid growth, Shan Weijian pointed out that China remains a middle-income country, ranked around 73rd globally in per capita terms, comparable to Mexico, Malaysia, and Turkmenistan. He presented a paradox: while still relatively poor by income metrics, China has achieved modernity in infrastructure—exemplified by Shenzhen's airport, 50,000 km of high-speed rail, ultra-high-voltage power grids, bridges, ports, and highways—that surpasses even the most developed nations. He noted the US lacks high-speed rail and ultra-high-voltage grids, while China dominates global markets in electric vehicles, wind, and solar power, each holding about a two-thirds share.
The core of his address focused on explaining this paradox through technological leadership. Citing a twenty-year tracking study by the Australian Strategic Policy Institute (ASPI) on 64 critical technology fields, he noted that in 2003, the US led in 60 fields and China in 3. By the end of 2023, China led in 57 fields, with the US leading in only 7. He argued that China has become a global science and technology center by uniquely meeting five essential conditions: talent concentration, clustering of high-level research institutions, abundant capital (noting China's high savings rate around 40% of GDP), deep processing capabilities (where China's share of global manufacturing value-added rose from under 7% thirty years ago to over 30% today), and a vast, unified market. He contrasted this with the 1990s, when only the US met all these conditions, and highlighted Shenzhen's growth from having few universities to now hosting 50, and Beijing's Haidian District hosting 83 institutions.
Addressing China's demographic challenges, such as an aging population and a declining workforce since its 2012 peak, Shan Weijian asked how China's GDP still doubled in the following decade. His answer was technology, recalling Deng Xiaoping's 1992 statement that "science and technology are the primary productive forces." He argued that post-2012 growth was driven not by increased labor input but by rising labor productivity. Citing his own research, he stated that China's manufacturing labor productivity, measured in physical output, is on average two to three times higher than that of the US.
He challenged the academic consensus that China's total factor productivity (TFP) stagnated or declined after 2009, suggesting instead that it was a key driver of growth in the absence of a demographic dividend. He referenced a revised estimate released on October 7th of last year by the Penn World Table (PWT), the global authority on TFP measurement, which found that China's TFP grew at an average annual rate of 2.3% from 2009 to 2019, and 2.1% annually from 2019 to 2025.
In conclusion, Shan Weijian asserted that technology is the fundamental driver of productivity gains. The increase in total factor productivity, fueled by technological advancement, is the essential guarantee for China's future economic development.
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