But it's different when you start going into the Shanghai, Shenzhen markets, which are much more locally focused and with names that we don't necessarily view as brand names, if there are such a thing for us in the US, vis-a-vis China.

Yeah, 100%.

I think this is where all ETFs are really driven by an underlying index.

And I think that's where this is very key that in the case of China, that definition of China is 80% Hong Kong, 5% U.S. ADRs.

If you look at the big companies in China, That Hong Kong market, you have banks, financials, but you also have a lot of discretionary names.

And to Andrew's point, you have a housing situation that's weighed on the consumer.

So those earnings per share growth has been very poor.

How then do investors go about expressing that view through ETFs as opposed to fundamental research on their own for trying to invest in these types of companies? And I say that because many of the types of companies that we're reading about are not really generally all that accessible for investors here in the United States, as opposed to those ETF managers with boots on the ground, so to speak, who can access those markets in a better way.

So, Brendan, if you could, maybe some insight from you on just where you see people trying to take this view, either on China as a broad macro play or on China more specifically as an AI play.

I think it's a little bit of both, Dom, that first and foremost you're seeing, particularly in the options market.

A lot of call options in KWeb.

Very big open interest on that ETF.

I think people are expecting a particularly better than anticipated outcome.

At the same time, there are AI plays.

Obviously, Alibaba, Tencent, and Baidu with cloud.

do people focus on, and it has been for years now, the kind of upper echelon market cap of these Chinese tech and Internet-related companies versus many of these other ones that we're hearing a lot more of because of the AI trade, but not necessarily ones that are worth the same amount that a Baidu or a Tencent or an Alibaba is?

If investors are looking internationally and they're looking for the reason kind of being because of the higher growth aspects of some of those economies, is China not the first answer now because of the growth industries being more semiconductor and sort of high tech things? Is it now Korea and Taiwan, like you mentioned, maybe Japan in there to kind of meet that goal in terms of just kind of straight exposure to those areas?

Yeah, I think that's a good point.

That definition of China has historically been Hong Kong, that the Shanghai and Shenzhen stock market is a very small part of MSCI China.

And that's where a lot of those semiconductors, a lot of the tech hardware companies are listed.

So China has an AI trade you just have to go you have to kind of really want to find it and i think i think that's where we're seeing um a little bit of a movement investors kind of connecting the dots at the same time the definition of china being hong kong you have these big players like alibaba and 10 cent that really have been affected by this knock-on effect of housing, consumer confidence, and very light domestic consumption.

Hopefully we see some more policies come from the Chinese government in terms of stimulus.

A lot of this economic data probably getting a little bit harder for the Chinese government.

Why the divergent success between an Alphabet and a Baidu?

So when we see these headlines now, when people look at the stocks now, do you think these stocks can truly thrive and throw the shackles off? What's the environment like?

I think for foreign investors, money will flow where it's treated best, and arguably you had some real challenges in China.

I think you've seen this 180, uh, because the Chinese government understands they actually need these tech entrepreneurs like a Jack Ma, like a Pony Ma at Tencent.

And so you've had this total pivot in sentiment.

Now you're seeing policy support.

You're seeing technology self-reliance is a big theme in China, and lo and behold, here's Alibaba with a very, very competitive, uh, their Qwen AI large language model leveraging their cloud, cloud computing.

So, um, are we frenemies? I mean, uh, how do you think about it?

Yeah, I, I think corporations, lot of data sensitivity, they're gonna use that enterprise model from an Anthropic, like an OpenAI.

garage rants.

Yeah.

Yeah.

I've done a few by myself.

Actually, it's funny.

You guys won't know who this is, but I'm sure there's two or three of these guys in fucking Cleveland.

There's a guy named Ernie Block, and Ernie Block Jr. owns... well he owned like the biggest car place like around right the auto mile ernie bach and he's a fucking loser and he has like a band called ernie and the automatics he has long hair he's fucking loaded of course i mean like and i actually did a rant on him and i put it on fucking instagram and it got like it like blew up because people like loses loser talking about ernie bach i'm like fuck ernie bach i'm like he's a fucking zero um and then like ernie bach's kid People were like – because I have this thing where I touch my beard all the time now because I'm a fucking loser.

Just fucking

Delve into it.

I think there's...

Yeah, I mean, you know, um, stepping back, I mean, some of the, the r- um, sell side research that you have, uh, uh, Bank of America Global Research, you know, they, they put the numbers at, um, uh, last year they, they thought there was probably 90,000, uh, or 20,000 humanoid robots, but that they think by 2030 that goes up to 1.2 million, 10 million by 2035, uh, actually three billion by 2060.

You know, Morgan Stanley Global Research, um, they, they put it by 2036 24 million humanoids.

That jumps to 137 million by 2040, 430 by 2044.

Um, you know, how they're coming up with this is actually, um, looking at electric vehicle adoption, hybrid vehicle adoption, that, uh, that as manufacturers scale, that what we've seen in terms of hybrid and electric vehicle production, they're kind of applying that, that, uh, that S-curve adoption rate to this humanoid robots.

Um, and that's why, you know, they're very, very bullish.

Please just keep going, 'cause there's so much interesting stuff you're sharing here.

Now, if Thursday's number comes in hot again, Brendan, Does that lock in a rate hike for real, for real, for sure? And what does that do to risk assets that have been running on cheap money assumptions?

Yeah, certainly.

And even with falling oil prices, other measures of inflation have been quite strong.

So I think that's where you're seeing, despite the narrative that the incoming, you know, the current Fed Chair Warsh was really just going to be a implementation tool for President Trump, other members of the committee are quite hawkish.

And I think you're seeing that a real 180, a real change from expectations, market expectations from earlier this year, from cutting to a potential hike.

At the same time, we are heading toward the midterm elections.

So I think there'll be some pressure on the Fed not to hike rates, that that would be considered almost a political move against President Trump and the Republican Party.

Where does China actually fit into this AI story, especially as it pertains to the CapEx super cycle right now? Do you think it's being left behind based on what you're seeing or is it building quietly in the background and it's not making as much noise as South Korea is?

What are your thoughts about that? Is that fair or unfair to China?

I mean, I think it's easy to Monday morning quarterback things and say should have, would have, could have.

I think that's true here in the United States where I always kind of give people, you know, give our government a pass that, you know, we haven't had a pandemic here in 100 years.

But when you hear that the head of the CDC spoke to the head of the CDC yesterday, China on January 2nd, that people in very high levels of government knew by mid-January that this was a very serious situation.

And they let me get on an airplane and fly into China at that time period, knowing that something was happening.

And from being in China at that time period, I attended a very large financial conference, almost 2,500 people I can tell you coronavirus was not discussed.

The people.

They just won't pay American wages for those types of jobs because the employers have been spoiled, too.

So what does this mean for the tech piece of the equation, as we have seen this decoupling, if you will, of those tech supply chains and tech stacks over the last couple of years, and does seem to be a flashpoint in these geopolitical tensions?

Yeah, I mean, AI is viewed as this race between the two sides, which I don't...

We'll see how that all plays out.

Maybe some of that's a bit self-serving for some of the companies that are looking to raise money.

Uh, at the same time, we've seen Chinese semiconductors companies really benefit from companies like Nvidia being limited on what they can sell.

Uh, that ultimately is potentially a headwind to US companies' bottom line if they're somewhat restricted on China.

Obviously, it's not just a large consumer base, but it's really is the fa- world's factory, and so that limits the ability of US companies to reach clients, not just in China, but in broader Asia, and, and really globally.

Um, so just break that down, especially as we do look to earnings from Alibaba and Tencent a- and other Chinese tech players.

And, you know, I wanna just start with this Anthropic story because it just keeps getting better and better and better and better, and you guys have a bunch of this in your, in your fund.

Yeah.

Thank, thanks for the opportunity, Charles.

Yeah, we uniquely within AGIX, we're, we're a USAI play.

Uh, public was ...

We went out and got exposure on behalf of our shareholders in both Anthropic and our XAI stake is now part of SpaceX.

So yeah, Anthropic, a really exciting company.

What do you mean by that?

Is that trade part of the reason why we're seeing such strong, uh, performance there?

Yeah, I think you had a real relief rally, uh, across Asia, including both China and Hong Kong.

Hong Kong reopening for the first time in five...

They had a five-day weekend.

But yeah, I think there's some other factors at play.

You had some very positive signs from Chinese regulators about the importance of e-commerce and their efforts to raise domestic consumption.

You also had a new AI video from, from Alibaba released, so, so there are some net positive.

Um, and also, again, just the, the focus now shifting to the president's meeting, uh, with Xi Jinping that's coming up in a few weeks' time.

When you're looking at the health of the Chinese consumer, how much of that is linked to stimulus by the Chinese government? And how much of it is because there are new opportunities for the Chinese middle class?

Yeah, I mean, certainly, Contessa, having been in Macau myself last year or this year, earlier this year, you were just overwhelmed by the number of Chinese tourists in Macau and how crowded those casinos were.

So the Chinese consumer has money.

It's just... getting it out of their proverbial wallet or purse, that the housing crisis, where upwards of two-thirds of Chinese urban household wealth is invested in, you see these big declines.

So, the issue is, how does the government stimulate, incentivize those consumers to actually spend money? And that's where we've seen consumer subsidies You're seeing a lot of the Chinese EV stocks, the ADRs, rallying today because they announced that they're actually going to extend those auto and EV consumption incentives.

And we expect very similar around electronics and home appliances, as we saw in 2025.

Can you give us a hint of some of your other top picks?

Yeah, I mean, certainly Baidu, like all of the companies we hold in K-Web, the founder is currently the chairperson or CEO.

Why are investors not too worried about the state of the Chinese economy right now?

Yeah, thanks.

Great, great to reconnect, Sam.

Good to see you here in the U.S.

But no, I think the economic data in China has been not too hot, not too bad.

It's kind of mediocre at best.

But at the same time, you still see from the company some great earnings growth.

And I know you are supposed to be talking about a lot of the retail and e-commerce players, but I do want to pick up on what we've seen this week with this kind of view that it's going full Tesla right now with this sort of validation of, you know, robotics, humanoids, etc., I'm just wondering what you're seeing as far as that company, as to how much credence we should give to this story as maybe another sort of cheaper way to play the whole AI trade and particularly off the back of what Tesla's been doing.

I want to get your thoughts on this.

Yeah, thanks, Morgan.

Yeah, we certainly believe that we are in the process of a re-rating of Chinese equities amongst global investors.

We've had a very strong performance, not just year to date, but really over the last year and a half.

And I think you're going to have some volatility due to some of the geopolitical narrative.

But I really do think that If we see this coming together of Xi and Trump, the potential for a state visit, you know, President Trump visiting China in the first quarter of next year, it's really going to allow a further rerating of Chinese equities amongst U.S. institutional investors who really are on the sidelines due to the geopolitical narrative at this point.

So what does it mean in terms of navigating those dynamics as an investor?

Yeah, I mean, certainly within that NDDA, Morgan, there's really two anti-China provisions in there, the biosecure as well as the Fight China Act.