Financial pundits on Monday emphasized that China's strengths in technology policy support, market scale, and talent education provide a solid foundation for high-quality economic development, with the capital market playing a pivotal role in driving growth.
“The focus in China has been on technology, starting from picking the right technology to invest in, having the right policy to support, and orchestrating different sectors to achieve the goal,” Ken Wong, executive vice-president at personal computer maker Lenovo, said during the Asia Financial Forum that kicked off in Hong Kong on Monday.
Wong also underscored that with a population of 1.4 billion, China benefits from abundant technology use and a strong foundation in tech talent education. Each year, more than 5 million graduates emerge from science, technology, engineering, and mathematics (STEM) disciplines, providing fresh momentum for innovation, according to Wong.
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Addressing the same panel discussion, Li Yimei, chief executive officer of China Asset Management Co Ltd, said that the top opportunities for long-term investments in China consistently revolve around technology and innovation.
In the US market, the Magnificent Seven group of large-cap technology companies - Apple, Nvidia, Microsoft, Amazon, Alphabet, Meta, and Tesla - has been the biggest equity market driver, advancing more than 60 percent last year, leading the market to a bumper 2024. According to JP Morgan, the group also made up approximately 75 percent of the S&P 500's earnings growth last year.
Li said this provides a striking example for the Chinese market where small-cap tech companies are poised to grow and eventually become large firms that will buttress market performance.
Wilson Zhang, managing director and global executive head of equities at China International Capital Corporation Ltd, underlined the critical role of the capital market in fostering new quality productive forces, which is seen as the next big thing to help China foster new industries by using innovative technology.
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“The capital market enables direct financing with greater tolerance for innovation, supported by investors with diverse risk appetites. This provides crucial backing for economic development,” Zhang said.
Charles Li Xiaojia, founder and chairman of Micro Connect, a small-business financing platform, called for a shift in investment thinking towards opportunities in China, urging a return to the foundational principles of value-based finance.
When discussing the most promising sector in China, he highlighted the digital economy as a transformative force that is redefining the country and forming the foundational infrastructure for nearly everything, including artificial intelligence (AI).
