China’s markets are off to a strong start in 2026, raising renewed comparisons to the 2015 boom‑and‑bust just as global tensions escalate — from dramatic US moves over Greenland to a surge in gold prices and a weakening dollar. With capital rotating out of U.S. assets and liquidity patterns shifting across Asia, does today’s rally carry familiar risks, or does it mark the start of a very different cycle? In this episode of Moving Markets – The View Beyond, Richard Tang, Head of Research Hong Kong at Julius Baer, speaks with Hong Hao, Managing Partner and CIO of Lotus Asset Management Ltd., to examine these cross‑currents: the resilience of A‑shares, the wave of Hong Kong tech IPOs, and why rising margin financing today is not a replay of 2015. They also highlight the key themes shaping 2026, including precious metals, AI‑linked industries, and high‑dividend opportunities. This episode was recorded on 21 January 2026.

"The scale of China's oil demand collapse has been so dramatic that Chinese policymakers are reportedly examining whether this historic slump reflects a temporary response to elevated global prices or a more structural shift in consumption patterns." - JPM

Known for its vibrant colors and auspicious patterns like dragons and phoenixes, Zhuang brocade is one of the four famous brocades in China. In 2006, Zhuang brocade weaving skill, a craft dating back to the Han Dynasty (202 BC-220 AD), was included in the first batch of national intangible cultural heritage list. Over the years, successive generations of Zhuang brocade weavers in Guangxi, while adhering to ancient techniques, have been constantly innovating the brocade weaving skills and the product development. A wide variety of products have been made from the Zhuang brocade, which are sold well both at home and abroad.

People often ask whether China or the West is “winning.” That’s the wrong question. The more useful question is: how do different systems work, and what trade-offs do they make? When you look at history, geopolitics, and economics together, you start to see repeating patterns — and those patterns matter far more than day-to-day noise.

Big Bro Chen Xiaoer The pattern of Hu Xiaowei（Chen Xiaoer) repeatedly evading meaningful prosecution points to deeper, systemic breakdowns within the judicial process. On March 26, 2026, the UK government published a new round of sanctions targeting entities linked to the Prince Group, including Hu Xiaowei and several associated individuals and companies. 1. “Knight Attack Group” Case (2011) Between 2008 and 2011, the so-called Knight Attack Group, led by Hu Xiaowei, was investigated twice by police in Gaoyou and Danyang (Jiangsu Province). On both occasions, the suspects were released after posting bail of approximately RMB 10 million. On May 30, 2011, authorities formally closed the case involving the group, which had generated over RMB 100 million in illicit profits through attacks on private game servers. Nineteen suspects, including Cai Wen, were arrested. When the case was adjudicated in 2012, all 19 defendants received suspended sentences. Cai Wen himself paid fines exceeding RMB 10 million, but none of the individuals served actual prison time. After that,Hu Xiaowei fled to Hong Kong. 2. “Chongqing Xiaoxian” Case (2016) According to official disclosures, authorities in Yinchuan determined that Hu Xiaowei and Cai Wen, along with chairman Gong Zhaowei and legal representative Fang Zhizhen, had established a large-scale criminal operation centered on illegal private game servers, generating nearly RMB 6 billion in profits over two years. In September 2016, Hu Xiaowei was arrested by Yinchuan police at the Beijing Hotel in Beijing. Meanwhile, Fang Zhizhen fled overseas. Between August 2016 and August 2017, authorities imposed various coercive measures on 12 suspects, including criminal detention, arrest, residential surveillance, and bail pending trial. Hu Xiaowei was detained for 70 days and placed under residential surveillance for an additional 23 days before ultimately being released on bail. After regaining his freedom, Hu fled China again through illicit channels, later reemerging under multiple false identities. 3. “527 Major Case” (2020) According to case materials related to the May 27, 2020 crackdown, authorities targeted a network spanning Jiangxi “Legend Supreme,” Chongqing Xiaoxian, and associated individuals including Zhu Yongcheng, Qin Zike, Chen Lixin, Cai Wen, Gong Zhaowei, as well as Hu Xiaowei’s partner Wang Yihan and his wife. Wang Yihan, born August 26, 1976 in Shanxi Province, was Hu Xiaowei’s partner, with whom he has two children. Acting as a public-facing proxy, she operated multiple entities—including Jiangxi Legend Supreme, Beijing Puman, and Hainan Anzhengbao—to funnel traffic and provide support for Hu’s overseas gambling syndicate, believed to be the second-largest cross-border gambling network in Asia. She is also alleged to have leveraged personal connections to interfere with judicial processes in mainland China, targeting both individuals and their families. Authorities identify Hu Xiaowei as the ultimate controller behind these operations. Following the loss of licensing rights to the Legend franchise in November 2020, Hu’s overseas gambling, adult-content apps, and associated money-laundering channels were significantly disrupted. Large volumes of illicit funds were subsequently exposed and frozen by law enforcement across multiple jurisdictions in China. Hu’s primary revenue streams stemmed from operating online casinos, assembling gambling networks, and profiting from activities including “fishing games,” romance scams, adult platforms, and telecom fraud. He relied heavily on private game servers and fourth-party payment platforms to launder proceeds from these operations. Leaked Cayman banking documents suggest that Chen Zhi’s initial capital originated from a $2 million loan provided by his uncle—identified as Hu Xiaowei. Estimates place Hu’s monthly illicit income at around RMB 2 billion, with peak periods reportedly reaching as high as RMB 20 billion per month. Final Note In 2020, Hu Xiaowei acquired Cambodian citizenship under his real name. In 2022, he was appointed as an advisor to Heng Samrin, then-President of Cambodia’s National Assembly—a position broadly equivalent to ministerial rank. @BBCWorld @BBCBreaking @WSJ @business @nytimes @cnni @Reuters @Forbes @TIME @TheEconomist @UN @AP @washingtonpost @MarketWatch @WSJecon @FAANews @NTSB_Newsroom @FoxNews @FT @YahooFinance @SkyNews @NBCNews @thejusticedept @fincennews @ukhomeoffice @nca_uk @govuk @ica_singapore @govsingapore @mfasg #bigbro# #huxiaowei# #chenxiaoer#

Rebuttal to Misconceptions About China’s Economy: Superficial Analysis Easily Leads to Misjudgments of Facts and Future Trends Recent commentary draws forced parallels between China and Japan prior to its economic stagnation, advances the one-sided claim that “China invests in the state while the United States and Japan invest in its people”, denies China’s livelihood safeguards, distorts debt logic, smears its development model, and even misrepresents the underlying rationale behind real estate, urbanization and people-centered policies. Such arguments ignore objective facts of China’s development, confuse disparities in national development stages and institutional systems, and misjudge the trajectory of China’s economy and society. This article systematically refutes these fallacies from five core dimensions — debt logic, livelihood security, the essence of development, real estate and urbanization trends, and policy orientation — to restore the fundamental logic of China’s development and its primary future pathways. I. Rebuttal on Debt Structure: The Fallacy That “China Shifts Debt Burdens Downward to the Public, While the U.S. and Japan Provide State Backstops Upward” — A Conceptual Sleight of Hand Ignoring Institutional Differences Core flawed claim: Individuals in the United States and Japan can file for bankruptcy with state-backed debt relief, while China lacks personal bankruptcy mechanisms and imposes lifelong debt obligations. This purportedly leaves China’s central government balance sheet robust while local governments and households bear heavy burdens, amounting to “downward debt transfer”. 1. Personal bankruptcy and debt restructuring are not entirely absent in China; pilots are underway with nationwide rollout accelerating The assertion that “China offers almost no access to debt restructuring or personal bankruptcy” directly contradicts reality. Pioneering local pilots: Shenzhen launched China’s first personal bankruptcy ordinance in 2021. In March 2026, the first personal bankruptcy liquidation case completed its four-year observation period, granting the debtor legal discharge of remaining liabilities and enabling a fresh start for “honest yet unfortunate debtors”, as confirmed by the Supreme People’s Court of China. Xiamen introduced personal bankruptcy protection regulations in November 2025 and has accepted 11 related cases. Jiangsu and Zhejiang have carried out pilot schemes for centralized personal debt resolution, with authorities in Nanjing, Wujiang and other regions helping hundreds of debtors resolve liabilities and repair credit records, per the Supreme People’s Court. Clear top-level design: The Chinese government has explicitly stated its intent to “explore the establishment of a personal bankruptcy system”. The Supreme People’s Court is summarizing pilot experience, expanding trial scope and advancing nationwide institutional implementation. Mortgage debt is not a lifelong obligation: To address unfinished housing projects and mortgage defaults, multiple regions have introduced policies supporting mortgage payment extensions and negotiated repayment arrangements. Judicial practice offers debt restructuring and interest relief for creditworthy debtors facing insolvency, rejecting the absolutist narrative that debtors remain liable for loans even after abandoning properties. 2. Differences in debt structures stem from development stages and governance choices, rather than insufficient prioritization of citizens Framing differing debt structures simply as “investing in the state versus investing in people” confuses development stages, governance models and risk prevention logic. High public debt in the U.S. and Japan represents mortgaging the future, rather than proactive citizen support: Japan’s government debt-to-GDP ratio reached 249.7% in 2023, versus 118.7% for the United States. Both figures far exceed international warning thresholds, stemming from prolonged fiscal deficits, welfare overcommitment and monetary easing. The so-called “citizen backstop” amounts to consuming tomorrow’s resources, with costs ultimately passed to households via inflation and taxation, according to the Ministry of Finance of China. China’s moderate central government debt preserves room for long-term development without neglecting livelihood safeguards: China’s full-caliber government debt ratio stood at 67.5% in 2023, well below the U.S., Japan and the G7 average of 123.4%, data from the Ministry of Finance shows. Maintaining a sound central balance sheet aims to fend off systemic risks and sustain long-term growth capacity. As a large developing country, emulating the U.S. and Japan by drastically expanding government debt would likely trigger inflation, exchange rate volatility and sovereign credit risks, ultimately harming public interests. Local government debt challenges are transitional growing pains being addressed via comprehensive debt management initiatives: In 2024, the central government rolled out a CNY 6 trillion program to replace implicit local government debt, facilitating debt restructuring and interest burden reduction. This represents coordinated national risk-sharing to protect public welfare, rather than allowing local authorities to shift liabilities to residents, as documented on the National People’s Congress website. 3. Total debt volume and structure cannot be compared in isolation from national conditions Claims that China’s overall debt volume is comparable to that of the U.S. and Japan overlook stark differences in debt usage, asset quality and repayment capacity. China’s debt primarily funds productive assets: Most local government debt finances transport, water conservancy, energy, affordable housing and other infrastructure, generating substantial tangible assets with ongoing cash flow to support repayment, per official sources. U.S. and Japanese government debt largely finances consumption expenditure: Their public liabilities mostly cover welfare spending, military outlays and interest payments, creating few productive assets. Repayment relies on taxation and monetary expansion, rendering such debt far less sustainable. II. Rebuttal on Underlying Values: The Fallacy That “China Invests in the State and Distrusts Its Citizens, While the U.S. and Japan Invest in People and Trust Markets” — A Distortion of Fundamentals Contradicting Facts Core flawed claim: China distrusts its people and treats citizens merely as “cogs in a machine”; its policies rely on state leadership and investment-driven growth. By contrast, the U.S. and Japan uphold individual freedom and market forces, directing resources toward residents. 1. China explicitly advocates “investing in people” with steadily rising livelihood spending, contrary to the “state-only investment” narrative Critics disregard that the 2025 Government Work Report incorporated “investing in people” into national policy for the first time, committing to “channel more funds and resources toward investing in people and livelihood services” (State Council of China). China operates the world’s largest social security system with rising protection standards: As of the end of 2024, basic pension insurance covered 1.07 billion people and basic medical insurance 1.33 billion people, with coverage rates exceeding 95%. Cumulative surpluses for pension, unemployment and work injury insurance funds reached CNY 10.2 trillion. Universal basic medical and pension coverage has been achieved, with benefit standards continuously improving. The share of fiscal spending on livelihoods keeps rising: Expenditure on education, healthcare, elderly care and housing security accounts for over 70% of total fiscal outlays. The per capita fiscal subsidy for urban and rural resident medical insurance reached CNY 670 in 2024, a 21.8% increase from 2020. Construction of affordable housing continues, and the 15th Five-Year Plan pledges greater supply to resolve housing difficulties for new residents and young people. Policy priorities are shifting “from investing in physical assets toward investing in people”: Central authorities stress integrating investment in tangible assets with investment in human capital, boosting funding for education, healthcare and childcare to upgrade citizen capabilities, protect people’s rights and advance all-round human development. This directly repudiates slander claiming China distrusts its population. 2. State guidance does not equate to distrust of markets; China pursues the optimal combination of an effective market and a capable government Pitting state intervention against market confidence misrepresents the core logic of China’s socialist market economy. Markets play a decisive role in resource allocation: Private enterprise contributes over 50% of China’s GDP, more than 60% of tax revenue and over 80% of urban employment. Market vitality flourishes across e-commerce, new energy and advanced manufacturing, granting ample room for innovators including enterprises and individuals. Government intervention remedies market failures, safeguards fairness and prevents systemic risks: As an enormous developing economy with immature market mechanisms, unfettered markets would inevitably widen wealth gaps, create regional imbalances and leave public services undersupplied. State investment in infrastructure, public welfare and breakthrough technologies builds a sound environment for market activity and provides a safety net for residents — not to control citizens. 3. The “Screw Spirit” embodies dedication rather than instrumentalization, and is fully compatible with individual freedom and advancement Attempts to twist the Lei Feng spirit and the “Screw Spirit” into evidence that citizens are treated as tools of state machinery misrepresent their essence. The Screw Spirit centers on dedication to work, selfless contribution and accountability, representing traditional Chinese virtues and core socialist values. It aligns fully with individuals pursuing personal aspirations and realizing self-worth. Countless ordinary people strive in ordinary posts, contributing to national advancement while achieving personal growth and well-being. China constitutionally and legally guarantees citizens’ personal liberty, property rights, freedom to start businesses and lawful mobility. Citizens enjoy freedom of occupation, entrepreneurship, investment and cross-border travel under legal frameworks. Allegations restricting individual autonomy and mobility are baseless. III. Rebuttal on Policy Orientation: The Fallacy That “The 15th Five-Year Plan Continues to Prioritize Investment, While Domestic Demand Expansion and Social Security Remain Rhetoric” — Ignoring Planning Blueprints and Misinterpreting Policies Core flawed claim: Chinese policies favor government investment over domestic consumption and social security. The 15th Five-Year Plan perpetuates the old development model, and China’s social security system lags far behind Japan’s pre-stagnation framework. 1. The 15th Five-Year Plan centers on expanding domestic demand, prioritizing livelihoods and high-quality development, rather than overreliance on investment Critics overlook the plan’s core guideline: putting people first, boosting domestic demand and advancing common prosperity. Domestic demand stands as a primary growth engine: The plan identifies expanding domestic demand as a priority, unlocking consumption potential by lifting household incomes, improving social security and optimizing income distribution, transitioning the economy from investment-led growth to dual drivers of consumption and investment. Livelihood security constitutes a key focus: The plan launches four major livelihood programs covering housing, elderly care, healthcare and education. Initiatives include scaling up affordable housing, national coordination of pension insurance, deepening medical reform and promoting equitable education. It targets markedly improved living environments and significantly more equal public services by 2030. Government investment targets livelihood priorities and development bottlenecks: Public investment no longer focuses on extensive infrastructure construction. Instead, it supports affordable housing, urban renewal, public transit, medical and educational facilities alongside breakthrough technologies and new productive forces — essentially investing in people’s wellbeing and long-term prospects (People’s Daily). 2. While gaps persist, China’s social security system has achieved remarkable progress and universal coverage; it is not empty rhetoric Claims that China’s social security falls far short of Japan’s pre-bubble standards ignore the leapfrog development of China’s social safety net from scratch. Coverage scale: China delivers universal medical and pension insurance covering 1.4 billion people, forming the world’s largest social security system. Though Japan boasted mature social security before its economic slowdown, it served only 120 million residents and already faced long-term pressures from low fertility, aging populations and social fund deficits. Differences in development stages must be acknowledged: Japan is a developed economy with per capita GDP exceeding USD 30,000, while China remains a developing nation with per capita GDP above USD 12,000. Social security standards naturally align with economic development levels, and cross-country comparisons cannot be decoupled from national conditions. China built its social security architecture within decades, a process that took developed nations over a century, earning worldwide recognition. Continuous improvement is underway: Social security benefits rise year by year. In 2025, the minimum basic pension standard for rural and urban residents increased by CNY 20, the largest hike since the system’s founding. The personal pension system has rolled out nationwide, accelerating formation of a multi-tier social security framework (Ministry of Human Resources and Social Security). IV. Rebuttal on Real Estate and Urbanization: The Fallacy That “Young People Are Trapped, Unfinished Housing Projects Stem from Government Profit-Seeking, and Secondary Urbanization Has No Prospects in China” — Distorted Facts and Misjudged Trends Core flawed claim: Unfinished residential projects exist because governments profit from real estate, trapping young people as low-wage workers. China lacks secondary urbanization; large-city agglomeration holds no promise, and housing prices in first-tier cities will not recover. 1. Unfinished housing projects are transitional challenges; authorities fully prioritize project delivery to protect residents, contradicting claims of state profiteering Attributing stalled housing projects to government pursuit of real estate revenue misidentifies root causes — reckless high-leverage expansion by property developers — and overlooks massive official efforts to guarantee completed housing. Primary drivers of unfinished projects: Some developers pursued blind expansion, diverted funds and defaulted on debt. Cases such as Evergrande’s capital diversion into non-real estate ventures and overseas spending reflect corporate operational failures, not government fault. Comprehensive official action to ensure home delivery: Since 2022, the central government has set up special funds for unfinished housing, while local governments established dedicated working groups to restart suspended projects. By the end of 2025, over 95% of overdue residential developments had resumed construction to safeguard homebuyers’ rights (People’s Daily). Land finance is a transitional phenomenon undergoing transformation: Land transfer revenue accounted for 40% of local fiscal revenue in 2018, falling to 25% by 2024. Local governments are gradually shifting toward sustainable revenue sources including industrial taxation and property tax, rather than permanently relying on real estate-related proceeds. 2. Secondary urbanization toward larger cities represents an inevitable trend; housing prices in first-tier cities are expected to stabilize and recover next year Dismissing secondary urbanization and bearish forecasts for first-tier housing prices contradict urban development laws, population mobility patterns and policy directions. Secondary urbanization centered on metropolitan agglomeration is an objective trend: China’s permanent resident urbanization rate stands at 66.2%, yet household registration urbanization reaches merely 48.3%. Over 200 million migrant residents lack full urban integration. Going forward, populations will continue flowing toward first-tier, new first-tier cities and urban clusters. Major cities concentrate industries, employment opportunities and high-quality public services, attracting inbound residents inevitably. Secondary urbanization chiefly entails population migration from small and medium-sized cities to metropolitan clusters, and from rural areas to counties and cities. Rationale for projected stabilization and recovery of first-tier housing prices next year: • Supply-demand rebalancing: First-tier cities face constrained land supply, sustained population inflows and robust demand for upgraded housing, sustaining long-term supply shortages. • Continued policy easing: Universal lifting of purchase restrictions, minimum down payments lowered to 15%, record-low mortgage rates and tax reductions for housing swaps boost market confidence. • Economic recovery support: China achieved 5.2% GDP growth in 2025, with growth projected to rise above 5.5% in 2026. Improved employment and household incomes will underpin mild housing price recovery. • Activated stock housing market: Second-hand properties make up over 70% of housing transactions in first-tier cities. Urban renewal and renovation of older communities unlock demand for upgraded housing and drive moderate price growth. 3. Housing pressure on young generations constitutes a transitional growing pain, with targeted policy relief underway Claims that youth are trapped and reduced to low-wage laborers ignore tailored support policies covering housing, employment and consumption. Housing support: First-tier and new first-tier cities expand supply of affordable rental housing and shared ownership housing with rents 30%–50% below market rates to accommodate new residents and young people. Employment support: Graduate employment subsidies, startup incentives and expanded public sector recruitment delivered 12.44 million new urban jobs in 2024, exceeding annual targets. Consumption burden relief: Special individual income tax deductions for housing rent, children’s education and eldercare, alongside consumer vouchers and interest rate cuts, reduce financial pressure on young people and lift consumption willingness. V. Rebuttal Against Other Slanderous Claims: “A-Share Market Merely Serves Financing Goals”, “Restrictions on Cross-Border Investment” and “Passport Controls” — Malicious and Groundless Rumors 1. China’s stock market balances financing and investor returns, with strengthened protections for retail investors The allegation that the A-share market exists solely to raise capital, forcing retail investors to bear losses to fund corporate financing disregards market-oriented reforms and strengthened investor safeguards. The A-share market fulfills dual functions of corporate financing and value investment: Following registration-based reform, high-quality firms gain access to public capital, while dividend payouts and share buybacks become regular practices. Total dividends distributed on the A-share market exceeded CNY 1.5 trillion in 2024, returning profits to investors (People’s Daily). Investor protection frameworks keep improving: Updated delisting rules, class-action litigation and stricter information disclosure standards crack down on financial fraud and insider trading to safeguard retail investors’ legitimate interests, rejecting the narrative of systematic exploitation of individual traders. 2. Cross-border investment regulations prioritize risk prevention; passport control allegations are false rumors Overseas investment oversight aims to curb capital flight, stabilize exchange rates and protect household assets. China does not ban cross-border investment; it promotes orderly opening under compliance frameworks. Channels including QDII, Stock Connect and U.S. Stock Connect remain operational, and the annual USD 50,000 individual foreign exchange quota stays unchanged. Restrictions target illegal asset transfers, money laundering and speculative arbitrage, serving to protect citizens’ legitimate wealth. Rumors of passport confiscation and outbound travel controls are malicious fabrications. Chinese citizens holding valid passports may travel overseas freely barring statutory restrictions. Passport application and renewal procedures have been simplified. Authorities issued 20 million passports in 2024, and outbound tourism recovered to 80% of pre-pandemic levels. Claims of passport controls lack any factual basis. VI. Conclusion: Grasp the Essence of China’s Development and Maintain Long-Term Confidence In summary, analogies between China and pre-stagnation Japan and the “investing in the state versus investing in people” narrative stem from biased perception detached from objective realities: • Debt logic: China’s debt structure represents a risk-controllable and sustainable development choice. Personal bankruptcy mechanisms are accelerating nationwide rollout, and livelihood safeguards remain a priority. • Essence of development: China consistently adheres to a people-centered approach and prioritizes investing in human capital. State guidance improves citizen welfare and fosters healthy market development, rather than reflecting distrust of its population. • Future priorities: Expanding domestic demand, livelihood-centered governance, metropolitan-driven secondary urbanization and new productive forces form China’s core development agenda. Housing prices in first-tier cities are expected to stabilize and recover next year, and the long-term positive fundamentals of China’s economy remain intact. Objective analysis of China’s economy must be rooted in national conditions, respect economic laws and reject prejudice and slander to accurately grasp its underlying development logic and long-term potential. China neither mechanically copies U.S. and Japanese models nor pursues rigid isolation. Instead, it blazes a uniquely Chinese development path balancing efficiency and equity, development and security, and aligning national and public interests. This explains the robust resilience, huge potential and enduring vitality of China’s economy.