So what were the main drivers behind this acceleration?

Yeah, so the industrial upgrading, I think, is making the most of the contribution behind this figure.

So if you look at the high-tech manufacturing output, it rose by 14.3%, equipment manufacturing by 10.2%.

So I think the strongest strongest growth is definitely concentrated in the technologically intensive industries and also i think the global investment cycle especially more global spending on ai computing on you know electricity networks on basically the green energy transition it creates a lot of orders for china's uh you know electronics for our equipment and also other industrial inputs so also i think domestic producers are also improving their capability uh in to meet the demand so we're talking about engineering experience we're talking about more specialized and niche suppliers and also production at scale so a lot of these are helping firms to develop these products very quickly and also to deliver them to global you know consumers in a reliable fashion so these capabilities are going to matter alongside in a lot of cases, our firms have a lot of competitiveness in its affordability, in its prices.

And finally, I think we're seeing a lot of established industries, for example, EVs, for example, humanoid robots.

So a lot of these technologies are being developed and we're talking about better production scheduling we're talking about you know using ai and robots to automate the production the inspection and basically to make the production process more efficient and you know to reduce waste to improve quality and so on so forth so we're seeing a you know whole scale industrial upgrading and that's i think you know the combination of this favorable demand and also the stronger production capability, I think can explain the strong figure behind the industrial output.

So how do you explain this strong performance?

Yeah, so I think the fact that the goods trade is growing by 18.8% in the first three quarters.

So apart from the ongoing Iran conflict, what other factors are also driving the inflation in the United States?

Yeah, so I think there are several factors.

First of all, housing costs is still remaining very persistently high.

So the shelter prices is rising by 3.2% from the start of the year to September.

And also, when we're talking about housing supply, Basically, they take time to expand and also rents are very slow to adjust because leases are renewed every once a year.

So when we measure this inflation, they could remain positive, even though the Fed is taking a lot of conditions or rate hikes.

And also, not to mention, the tariffs are raising costs for both the importers and domestic producers.

What is your take?

Then to Li Lun, why has the question of who pays whom become such a focal point of the media?

Yeah, I think this simple characterization tends to kind of oversimplify things a little bit because people read the kind of who is the net payer as potentially looking for a reversal between the two parties.

Because as I mentioned a decade ago, Huawei was always undoubtedly the net payer for all of the patent licensing.

So I think even though Qualcomm have disputed that it's the net payer in the license agreement, I think because we don't have the full disclosure, we don't know the entire information, for example.

Also, the deal is pretty complicated.

It involves the transaction and also the licensing of multiple patents in several different areas.

For example, it could be also resolving some of the ongoing litigation or conflict.

Then Li Lun, if the deal goes through, what could it change for the telecommunications and technology industries?

And then how should China respond to the so-called overcapacity issue without allowing legitimate industrial competitiveness to be treated as a trade problem?

problem?Yeah, so I think China, uh, should really defend its position, uh, that all of these increase, especially in exports, are driven mostly by the c- increase in competitiveness of these companies.

So firms, basically, uh, we should really document, for example, the, our expenditure in R&D, how basically the innovation or production of scale are really benefiting, a- and also through the supplier networks to kind of really lower the production cost.

I think having more transparent data on the prices, especially on intermediate goods, are going to, you know, allow more people to really distinguish that we are in- in China, we actually have a more efficient production line, a more efficient supplier network, and that's driving all of the increase in basically the, the export market.

And also I think, uh, you know, addressing some of these, uh, domestic distortions, for example, as the government is already doing, providing more, uh, you know, support to the service sector, providing more support through the healthcare, childcare, and elderly care, is basically going to release more, uh, demand for the current s- situation.

I, I, I think that's also going to help because it can kind of reduce the pressure in a lot of the sectors, especially the sectors that are facing uncertain, uh, you know, international or, uh, global trade.

And finally, I think, uh, you know, it's natural for some countries to feel, uh, you know, threatened by, uh, you know, this disruption in a certain area, for example, for Chinese EVs, but I, I do think that a lot of these trade complaints should be handled through the transparent and also proportionate procedures, for example, through the WTO rules or through international, uh, agencies instead of, uh, you know, having these so-called, uh, you over capacity campaign, uh, targeted at China.

And looking ahead to the leader summit in December, what do you think would be a realistic outcome that could demonstrate that the G20 is still capable of managing major global economic disagreements?

So how important is the diversification of chip demand to the resilience of China's semiconductor industry?

Yeah, so I think having a diversified market for chips is really going to reduce the dependence on one product cycle or demand cycle of a single product.

For example, if we have a weak smartphone market, if we have a weak EV market, it doesn't mean we're going to have a weak demand for the entire chip, for the entire semiconductor sector.

So also, I think a lot of different applications, they require different kinds of chips.

So instead of having this one giant that's making all sorts of chips, we're going to have a diversified or a spectrum of companies that's supplying different kinds of chips, which is also good for the entire ecosystem.

For example, an EV, they may need a different type of control chips compared to an IoT device or a data center or your smartphone.

So having strength in different categories can also benefit one another because oftentimes they share the same supplier, they share the same supply chain.

So at what point, Li Lun, can AI move from an investment story to a meaningful productivity story for the broader economy?

So what's the thinking behind this and why the smart home is seen as an important new growth area?

Yeah, so I think smart homes, they basically are another reason where consumers can upgrade the product that they already own.

For example, a family, they may not need another TV or refrigerator, but the family could purchase some appliances that could reduce electricity, for example, a smart switch or a smart lighting system.

So I think this is an opportunity because people are expected to improve the service that they are already receiving from their homes.

And I think there is already an established market where to build.

For example, we are seeing in 2025 that the retail sales of these household appliances rose by 11%.

So this is already faster than some of the other consumer retail categories.

So how transformative could AI-powered home service robots be for household consumption?

Um, so what can a mechanism like the BRICS actually make a difference in people's everyday life, I guess, um, when it comes to the economic development side of things like jobs, income, opportunities, so on and so forth?

Yeah.

So first of all, thanks a lot for inviting me.

I think this is, as you'd mentioned, a very important topic and also a very interesting one for me.

And, um, as you said, uh, you know, there are a lot of economic uncertainty right now, and I do think that what the BRICS country can do is actually to kind of maintain a, a more stable global environment.

Because when, when it comes to businesses, for example, they are usually more willing to invest if they are sure that, for example, uh, they could anticipate that there's, for whatever product they're selling, they have a r- reliable consumer market, they could anticipate what the production cost is, um, they can, you know, hire high-skill labor to manufacture these goods locally.

So basically, the stability when it comes to economic stability, political stability, trade stability, this stability is usually what companies, uh, you know, foreign investors are looking at w- when they're making the decision.

So do you think, uh, by the collaboration that you mentioned or maintaining dialogues, building more n- such networks among BRICS countries or among the wider Global South can actually help, uh, lower the costs, for instance, for some green technologies?

What does this tell us about China's role in driving economic cooperation within BRICS?

Yeah.

So as you mentioned, you know, China's, uh, trade with BRICS country is already at close to 7.5 trillion in 2025.

It... and it's accounting for, you know, over 15% of China's total foreign trade.

And I think, you know, the BRICS cooperation with China now is having a solid foundation, both for China's economic development, but also for the economic development for the BRIC country as well.

And I, I think China is creating this opportunity, basically connecting all the partners that's supplying the food, energy, and products versus, you know, the consumers that's demanding for these, uh, s- for, for these goods, services, and products.

And also China is, is providing a lot of machinery, a lot of industrial inputs into the BRICS country as well, which are helping all of these partner countries to expand their own production.

So what strategic advantages does this scale give the group?

So what makes Shenzhen such a unique innovation ecosystem and why is this so attractive for foreign entrepreneurs?

Yeah, so Shenzhen's main advantage, I think, is definitely in its density of basically suppliers, manufacturers, firms that's designing the product, firms that's providing the logistics, components and overall.

And everything is operating within a relatively small and compact region.

And that proximity is basically lowering the time and uncertainty.

that's involving in making a product that basically you don't have to travel a large distance to find a supplier and so on and so forth.

So the city is also combining manufacturing depth with a lot of investment in research and development.

For example, Shenzhen's R&D spending is reaching more than 200 billion yuan or more than 6% of its GDP.

So what lessons are European companies actually trying to learn from China?

So what exactly does a token economy mean and why is it becoming important now?

Yeah, so from an economic perspective, I think the interesting thing about token economics is that, you know, rather, you know, previously it's rather complicated or abstract to measure the production and consumption of the AI or so-called machine intelligence.

But right now using tokens, we could, you know, make these intelligence, make these services measurable, and also you could give them a price.

so i think this is really giving the commercialization model for you know the ai industry for for example you know from the the beginning of the electricity it's going to power data centers and data center as well as computing resources they you know train the models feed the models And models are going to generate tokens which are consumed by both AI agents, by consumers, by applications.

So right now, we do have a very complete economic chain from all the way from the electricity generation to computing capacity and to AI services.

And those are going to generate a lot of revenue, a lot of profit.

And also, China is operating this AI economy, this token economics at scale.

So can you help us understand how these three work together?

So from your perspective, is China Squeeze a well-established concept or is it just a narrative constructed and popularized on purpose?

Yeah, so from an economics perspective, China squeeze is definitely not an established concept yet.

So, you know, different from, for example, China shock, which was studied by a number of economists in their papers to study how China's, you know, joining the WTO is having an impact on local labor markets.

This China squeeze is more like a narrative that combines several different concepts, several different questions, for example, in terms of the competitiveness of China's export product, in terms of the industrial upgrading of China's local supply chain, in terms of China's attractiveness for foreign investment and for China's development in AIs.

So I think what really is hiding behind this China squeeze terminology is really the fear about China's growth.

But I do think that Chinese exports to the other countries, they could definitely create some pressure in particular industry.

But I do think besides that competition in final goods, China also supplies, for example, affordable machinery.

How should we interpret the changes in manufacturing employment in the West? And to what extent has deindustrialization been driven by domestic factors instead of Chinese competition?

So how do you view this?

Yeah, so from the data, China does have a surplus.

So according to the WTO data, our merchandise sales and also the trade surplus is well above a trillion dollars every year.

But I do think a large surplus by itself is not a direct evidence that China is squeezing or giving shock to the industrialization of the rest of the world.

So I think to answer that question, a lot of experts are asking, in fact, a counterfactual question that If China has developed or grows differently, how would the other countries might have behaved? So I think that's a much harder question.

So I think China's comparative advantage does not benefit it from, for example, low wages alone.

It doesn't directly benefit.

So how do you understand China's innovation dividends to the world? And in your understanding, is there such a thing as China Shock 2.0 or is that the China Opportunity 2.0?

So what does this tell us about how the global pharmaceutical companies view the Chinese innovation?

Yeah, so I think the most important change is that China is no longer seen as only a manufacturing base for these already developed pills.

It's also seen as a source of intellectual property or a very crucial part in the entire innovation process.

So the global pharmaceutical companies, they're actually putting their money, their investment, their contracts behind this assessment.

So as you have mentioned, eight of the 10 largest pharmaceutical out licensing deals is with Chinese companies.

And also there's an estimate that 40% of the asset licensed by major pharmaceutical companies had a Chinese licensor.

So that's the data for in 2025.

And how is AI now changing the way that Chinese pharmaceutical companies discover and develop new drugs?

So why have tariffs failed to produce the expected investment boost?

So the theoretical logic behind this is very straightforward.

When you have more import tariffs, imports are going to become more expensive and foreign companies will have more incentive to actually build factories in America and sell in America directly.

So this is sometimes called the tariff jumping investment, but it only works if the firms believe that the tariff is going to be stable.

It's going to be long lasting.

The local production is more economically viable.

So producing in the United States, it's not an easy process.

Why has this policy-level effort to provide greater certainty failed to translate into greater investment confidence among German companies?

So what explains such a dramatic lead?

Yeah, so I think the main explanation for this is China has this unique ability to turn the lab prototypes into a standardized, affordable product.

So this is not, uh, you know, just, you know, by China, China leading in algorithms in any single sector of the, you know, humanoid robot production.

It's, uh, about, you know, who can win in engineering, procurement, manufacturing, and also delivery.

So I think, uh, you know, China have this huge domestic market, uh, with a lot of domestic, uh, competition, which on the bright side is shortening the innovation cycle.

So companies, uh, you know, they can compete by, uh, innovating or launching a model or a prototype and test it in factories or research institutions and quickly receive feedback and also modify both the hardware and software of these humanoid robots within months.

So I think these, uh, you know, uh, fast innovation cycle and also the deployment also generated a lot of physical world or real world data that could also help the companies to train the brains of these robots.

So what advantages has China developed in this sector?

So what are main forces behind the strong performance?

Yeah.

So I think firstly, uh, we're seeing a unusually broad-based, geographically, uh, representative growth.

So we're talking about a total goods trade, which is, has reached, uh, over 30 trillion yuan for the first seven month, and it's up by 17.3%, as you mentioned.

But if we look at trade with each, each region, so trade with ASEAN countries have grew by 20%, with EU by 9.5%, with Belt and Road partners 15.5%, and with Latin America 15.4%, with Africa 18.9%, so on and so forth.

So we're seeing a diversification, which is really m- uh, going to matter because it's reducing China's dependence on any single export market and is representing China's resilience in its, uh, export market.

And secondly, I think this number is representing a, a technological shift or technological cycle behind the numbers.

So what does this tell us?

And why has the yen weakened to a 40-year low in the first place? Is this mainly about the interest rate differences, or are there deeper problems in Japan's economy?

So I think the most immediate or most direct explanation is in the int- interest rate differences.

So for example, when we look at the Federal Reserve's policy rate in the US is currently, uh, between 3.5 to 3.75%, and that, that, uh, rate is only 1% in Japan.

So I think a safe way to kind of, uh, make money is that investors could borrow in yen and also purchase, you know, higher yielding dollar assets, and this is g- going to create a persistent demand for dollars and also, uh, a persistent selling pressure on the yen.

So, uh, this, uh, momentum is going to continue as long as there's going to be interest rate differences.

But I, I do think that interest rate are not the whole story because, uh, you know, uh, between tw- 2011 and 2026, the yen has depreciated by approximately 51% against the dollar.

So I think, uh, you know, economists are also, you know, uh, analyzing the reasons.

And what do you think are the main challenges the Japan economy is facing today?

So why have these two ecosystems taken such different approaches?

Yeah.

I think the difference, uh, partly reflects difference in business models.

So a lot of American frontier, uh, companies, uh, such as OpenAI and Claude, they have invested a, a large sums of money in, in training.

And to recover that, uh, you know, uh, development cost, they do seek to establish some sort of monopoly in, in this market and also gain a lot of profit.

That's why they're charging such a high price.

For a lot of Chinese models, uh, they do also invested a, a lot in, in, in, in the beginning.

So why has the US tech sector become so divided over this issue?

Mm.

So, and, uh, Professor Andy Mok has already mentioned household consumption, and I, I, I do think that with such a large amount of household saving, you know, consumption is, uh, you know, having some precautionary saving motive and not consuming everything right away.

There's probably some culture iss- uh, cultural difference between China and, for example, some Western countries.

There are a lot of different reasons, and we're seeing service consumption have, have been on the rise, uh, at more than 5%.

So I think those are, uh, kind of, uh, I would worry less about the household consumption side.

About, uh, domestic investment, I think a lot of people may notice that, for example, the fixed asset investment has declined for 5.7%.

Uh, you know, for overall manufacturing investment, there's also a slight decline of 1.2%.

Again, the backdrop of intensifying global technological competition, how will China continue to support emerging industries and ensure healthy and sustainable growth in the months ahead?

And at a time when geopolitical tensions and supply chain diversification rhetorics are still there, why are so many multinationals choosing to expand rather than reduce their investment in China?

Yeah, so, uh, when it comes to geopolit- geopolitical tensions, I think China us- usually serves as a stabilizer, uh, to basically reduce the risk rather than, you know, increase the risk.

So China u- offers this unique combination of market scale with the depth of supply chain because, for example, when it comes to a lot of advanced manufacturing industries and sectors, firms can find all of their suppliers, their engineers, their logistic services, digital infrastructure, everything in the same cluster.

So, and there's no other country that have this entire ecosystem, uh, that's in basically a closely connected, uh, cl- uh, uh, one market.

So, uh, also a lot of people mention the competition in China, but the competition also offers some value to innovation because companies need to kind of develop their products more quickly to reduce the cost and also adapt to, you know, the, uh, changing consumer demands.

So if you have a company that offers a successful product, offers a, a successful business model, uh, in China especially, these, uh, you know, success can be quickly, uh, you know, multiplied to a lot of different consumer bases and gain a lot of market share in a quick amount... i- in a short amount of time.

So this is another reason why China is being treated as not just a big market or a big production base, but also a innovation or commercialization platform or hub.

So what kind of opportunities might this create for foreign investors?

I'm still getting used to um you know absorbing the new threes let alone the old threes because having been born in the last century we were still pretty much i remember once i traveled abroad a couple of years ago and people said look the things coming from china they're cheap unfortunately they're not very good that sentence really stayed with me and the old three that are cheap but are good you know garments white goods and furniture they are better than what they used to be but now almost only two decades later we're looking at these extraordinary technologies if not goods what propelled the development of China's high-tech sector I'm talking about the high-tech sector here what what is the fundamental driving force there

Yeah, I think you mentioned a very good point.

I think what used to drive China's economic growth is usually what we call tradable or exportable goods.

So these are goods that you could, for example, charge a tariff to counter against.

But right now, the development of artificial intelligence, the development of However, I mean, robotics is still a physical good, but when it comes to the patent, when it comes to the knowledge, the research and development, all of the effort that's put into the embodied intelligence, all of these efforts can be really countered against using a simple tariff.

And also, I think it's benefiting the entire human race as what Alex has been doing, for example, with his team and his entrepreneurship, because once you have a new drug, you actually benefit all of the patients in the world.

And your question is, I think, what kind of drives or propels this development? I think because China has developed such a complete and healthy ecosystem for the manufacturing base so i think the development cycle from prototypes to actual commercialized product is very short the time frame that's required for for this process whether it when it comes to for example the motors sensors batteries when it comes to the robotics or when it comes to for example medicine the the research and not to mention the talent pool the number of scientists and entrepreneurs and experts in each area.

So, Professor Li, Why, despite the talk of risk and the concerns for sustainable growth longer term, the demands just seem can slow down? What's behind this?

So how significant is that metric? And beyond the large language model, where do you think Chinese AI companies have the strongest global competitive advantage?

Yeah, so I think token usage is definitely a significant measure because it, it, it's actually, you know, the smallest billing unit of the large language models.

It, it directly measures how much model was used, how much actual model consumption was used, whether by a human or by a AI agent.

So I think, uh, the metrics...

Some, some people say, you know, we should interpret the metric carefully because, you know, some AI agents use these, uh, you know, tokens repetitively and also consume a lot of tokens.

But I, I, I do think the penetration of AI agent alone, it also says something about the adoption of AI in the economy.

And I think China's advantage in these large language models is definitely in its open source and cost efficient models.

So what do you see as the key drivers behind the rapid rise of China's robotics industry?

So what does this tell us about how climate change is beginning to reshape the global trade patterns and consumer demands?

Yeah.

So y- you know, climate change is definitely creating a lot of new markets.

Uh, so for example, in Western Europe, uh, the June, uh, in 2026 is the hottest June on record.

Basically, the average temperature is, uh, almost, uh, three degrees above the average between 1990 to 2020.

So in this weather, you know, products such as air conditioner, uh, such as fans a- and, uh, all the cooling, uh, devices, basically, uh, they are becoming part of this, uh, new economy that's, yeah, adapting to this new climate.

And I think, uh, as you mentioned, the geography of consumer demand is also changing because air conditioning was historically only concentrated in much warmer economies, but a lot of, uh, European homes, basically, they're, they're starting to adapt this, uh, basically, this device.

So what does this tell us about China's ability to quickly adapt products to the specific needs of overseas markets?

First of all, could you briefly explain what happened between Jingye Group and the UK government? How unusual is this nationalization?

So in 2020, uh, British Steel was on the verge of bankruptcy.

And Jingye, uh, you know, a Chinese company, kind of, uh, acquired British Steel, uh, in March of 2020.

Uh, back then, you know, British Ste- Steel find, uh, couldn't find any domestic buyers who's willing to take it over.

And, uh, basically Jingye Group stepped in as a white knight and basically acquired the century-old steelmaker.

And since then, Jingye Group has invested more than 1.2 billion pounds in terms of equipment upgrades, operational maintenance, employee salaries, and also preserved around thir- uh, 3,200 jobs at, at the local plant.

But I think the more immediate crisis came in around the spring of 2025.

And as we know that the governments sometimes intervene to protect the strategic industries, but they also have an obligation to uphold the investors' rights, right? So how should they strike the balance?

So what's behind this recovery?

Yeah, so I think the recovery is supported by both production side and also the demand side.

So we have seen, according to RatingDog and S&P Global, that the manufacturing PMI in June is at 51.7.

So it's above the 50 point expansion threshold.

and it has been above that threshold for the seventh consecutive month.

And if we look at the second quarter average, it's actually the strongest since the late 2020.

So I think when we look at new orders, it also expanded for the 13th consecutive month, which are suggesting that firms are not only just producing more and stockpiling them in the inventory, but also seeing a more steadier pipeline of demand.

So what makes the renminbi denominated assets attractive in today's global environment?