Bin Gao runs a macro hedge fund out of Hong Kong, and his framework for the world skips the G7 entirely: on his numbers, the US and China each produce multiples of what any other country does in agriculture, manufacturing and services, and every other economy is a rounding error next to them.
The consensus view is that investors should stay overweight developed markets and underweight China. Gao says that is backwards, and that the whole G2 story is underpriced because almost nobody in markets understands the country well enough to see it.
"I researched this happening 10 years ago when setting up the fund."
Gao trades a fund that returned 76% in 2024, a year that made him well known enough that Bloomberg wrote about him, and he was a physicist before he became a macro investor, which is where his skepticism about "innovation" as an American monopoly comes from.
The full interview is covered here so you can skip it. 33 minutes of audio, 12 minutes of reading.
Here are the 8 takeaways that matter.
👤 Guest: Bin Gao, Chief Executive Officer and Co-Chief Investment Officer of Kaifeng Investment Management Hong Kong, a macro hedge fund
🎙️ Host: John Lee, host of Asia Centric and an investment-research analyst at Bloomberg Intelligence
📰 Published: 16 September 2026 on the Asia Centric feed
🟣 Apple Podcasts | 🔗 Episode page | ⏱️ 33 min | ✅ Time saved: 21 min
Key Takeaways
The world already runs on a G2 axis, not a G7 one, measured sector by sector China does close to $5 trillion in manufacturing to the US's roughly half that, and the US pulls in about $22 trillion in services to China's $11 trillion
The US and China are becoming more entangled indirectly even as direct trade falls Waymo bought thousands of mid-size Zeekr vehicles for its robotaxi fleet, and Vietnam's trade surplus with the US roughly matches its trade deficit with China
Washington's export controls have mostly failed, in his account, including on chips He says Chinese semiconductor exports rose "130-some percent" last month alone
China's weak retail sales are a saturation problem, not just a housing bust Shenzhen and Hong Kong have similar GDP per person, but Shenzhen residents have more living space and more cars — a sign of what a "developed" Chinese city already looks like
He is calling for the Federal Reserve to hold rates, against market pricing of 85–86% odds of a hike He argues the Fed and the US government have little credibility left after two decades of money printing and deficits
The renminbi should strengthen well past where markets and Goldman Sachs expect He compares China today to Japan in the 1970s, before the yen's multi-year run from 300 to the dollar toward 150
He calls Japan's consumer stocks a bubble and Chinese export-consumer names cheap by comparison Fast Retailing, the owner of Uniqlo, trades at 50 times earnings; comparable Chinese exporters trade near 10 times
His fund made 76% in 2024, mid-20s in 2025, and is roughly flat so far in 2026
1. Two Economies, Not Seven
Lee opened by asking Gao to explain how the world is shifting from G7 dominance to a "G2" dynamic between the US and China.
Gao broke the world down by sector rather than by country grouping. China produces close to $2 trillion a year in agricultural output, with India and the US each producing only about a quarter of that. In manufacturing, China does close to $5 trillion against roughly half that for the US, and no other country tops $1 trillion.
In services the US leads, pulling in about $22 trillion a year to China's roughly $11 trillion — but every other country trails both by a wide margin, staying under about $3.3 trillion. "Clearly, you see from the numbers that China and the U.S. are multiple of other countries in each of the three sectors," he said, which is why he frames the world as a two-power system rather than a seven-nation one.
"I researched this happening 10 years ago when setting up the fund."
He added a geopolitical layer: China was the only country directly confronting the US on trade and technology over the last two years, and while it is too early to call that a win, he said it has gained ground toward a G2-style balance.
Pressed on whether this makes the rest of the G7 irrelevant, Gao said he would not frame it as G7 versus China specifically. He described a broader developed-versus-emerging rotation — the G7 or G10 losing weight to the BRICS bloc — with the US-China relationship as the sharpest version of that trade.
2. Supply Chains Won't Split
Lee asked whether supply chains will fully bifurcate between the US and its allies on one side and China on the other.
Gao said China is becoming less dependent on the US directly. The country already uses relatively few US inputs outside chips and other high-end technology that Washington is actively restricting, and China is working to replace that gap.
He argued the two economies are becoming more entangled indirectly even as direct trade between them shrinks. Waymo bought thousands of mid-size Zeekr vehicles from China to build out its autonomous-vehicle fleet, and Vietnam runs roughly as large a trade surplus with the US as it runs a trade deficit with China — evidence, he said, that Chinese-made components are moving through third countries into the US market.
He framed the real question as one of philosophy rather than trade policy: does a country believe in the market or in government control, and which government enforces its will more effectively?
"In the past, Americans were able to buy alcohol during prohibition years." He used that as his example of market forces beating government control, and paired it with a present-day one: the US still relies on China to restrict the chemical precursors used to make fentanyl, because market demand for the drug persists domestically however strict enforcement gets.
His conclusion was that China has moved from supplying finished goods to controlling much of the supply chain end to end — upstream materials, manufacturing and now the "legal" chemical inputs that policy depends on.
3. Where Export Controls Failed
Lee asked whether US policy is narrowly targeted — EVs, specific Nvidia chips, ASML lithography tools — or broadly selective against China.
Gao said the US is selective but has largely failed anyway, citing the space industry, EVs and solar panels as sectors where both US and European attempts to protect domestic producers and withhold core technology from China did not stop China from succeeding.
On semiconductors specifically, he said the picture is turning fast. "Last month, I think semiconductor export increased 130-some percent from China."
He rejected the idea that the US owns creativity and China only executes at scale. "I challenge the notion of U.S. is good at 0 to 1, and China is only good at 1 to N."
Speaking as a former physicist, he argued there is no real fundamental innovation happening anywhere right now — the world still runs on 20th-century physics — so what looks like innovation is really the application of capital, talent and knowledge, all three of which China now has in ample supply.
Asked directly whether US measures to limit China's exports and growth have largely failed, Gao pointed to the trade numbers: the US ran an $800 billion deficit with China in the first eight months of the year and is on pace for roughly $1.2 trillion for the year, in the sixth year of the trade war.
4. China's Two-Tier Economy
Lee raised the "K-shaped" story: exports are strong, but China's own retail sales are growing only about 1% year on year.
Gao agreed the weak side is real but said the usual explanations — the multi-year decline in property prices and precautionary saving from a thin social safety net — are only part of it, and that social security provision has actually improved.
His main point is that parts of China's economy have already hit a saturation level typical of a developed market, using Shenzhen and Hong Kong as a direct comparison. Shenzhen's GDP per person is a little over $20,000 against Hong Kong's roughly $50,000, yet Shenzhen residents have more living space per person and a higher rate of car ownership than residents of Hong Kong.
Once an economy reaches that kind of saturation, he said, retail sales growth of 5–6% becomes structurally unlikely regardless of stimulus. He also pointed to a base-effect problem: last year's consumption incentives on cars and electronics have rolled off, and stripping those categories out, underlying retail growth is closer to 3% — which he called a "respectable" number rather than a weak one.
The deeper constraint, in his view, is the service sector rather than manufactured goods — Chinese living standards around the household are already solid, and the shortfall is in services that government policy restricts.
5. The Golf Course Puzzle
Lee pressed on why a culturally similar, increasingly wealthy country has not seen a golf boom the way Japan and South Korea did.
Gao's example: China has roughly 300 golf courses on an 18-hole-equivalent basis versus about 500 in South Korea, 3,000 in Japan and 16,000 in the US — and on a per-capita basis, China trails all three by a wide margin.
The restriction dates to the early 2000s, not the current administration, when officials moved to protect farmland and curb water-intensive land use while China was still relatively poor. Enforcement was loose for years, leaving hundreds of golf courses without proper permits before the current government began closing the unlicensed ones.
The bigger driver now, he argued, is perception rather than law. Anti-corruption rules bar officials from playing golf on public money, officials read that as Beijing disfavoring the sport generally, and the industry has stalled even though other high-end pursuits — skiing, skating, tennis, yachting in Hong Kong — are growing.
Lee suggested there may be a residual discomfort with visibly displaying wealth. Gao agreed that framing matters: presenting an activity as ordinary people wanting a higher-quality life, in step with the government's own push from high-speed to high-quality growth, is more likely to get political room than framing it as the rich showing off.
6. Trading the RMB and Rates
Lee asked how Gao actually expresses the G2 view in a portfolio, given the choice between equities, currencies and fixed income.
Gao's first idea is renminbi appreciation. "It's a short trend, although there will be volatility around it." He said investors are underweight the currency partly because low domestic rates discourage carrying it and partly because they assume the PBOC opposes a stronger yuan — but once the Fed stops hiking and eventually cuts, he expects the underweight to unwind in a move the central bank cannot fully resist.
He compared the setup to Japan in the 1970s rather than the more commonly cited 1990s bubble, drawing the parallel through energy: the 1970s oil shocks pushed Japanese cars into global markets, just as he sees geopolitical pressure over oil independence pushing Chinese EVs into global markets now. From 1975 to 1985 the yen roughly halved against the dollar while the Nikkei outperformed the US by what he estimated at 200–300%.
He also likes being long the front end of US rates against short-dated Chinese rates, arguing that Fed chair Kevin Warsh will not turn out as hawkish as markets currently expect. China's own long-dated yields, he said, sit around 2.2–2.3% on the 30-year and under 1.7% on the 10-year, versus over 3% in Japan and over 4% in the US — a gap he thinks is too wide given China's growth potential.
Currency-wise, he expects a stronger yuan to lift neighboring currencies too, singling out the Korean won and the Australian dollar, the latter helped by its higher carry.
7. Betting Against the Hike
Lee turned to the Fed decision, recorded two and a half days before the announcement.
Gao went on record against the consensus. "And the market price is seeing like 85%, 86% of September hike." He said he was "willing to stick my head out and calling for a no hike," while acknowledging the risk was asymmetric given how priced-in a hike already was.
His reasoning leaned on politics as much as economics: he argued neither the Fed nor the US government has much monetary credibility left after two decades of money printing and large fiscal deficits even during a hot economy, and that officials will act with the midterm elections in mind.
He noted Warsh does not control the outcome alone — Warsh needs only a simple majority of his committee, not unanimity, and has flagged AI-driven productivity gains as justifying a smaller Fed balance sheet even if he is not ready to declare current inflation fully tamed. Gao's read was that Warsh would rather wait until December, after the midterms and with more committee input, than move in September.
Lee noted the podcast would air only after the actual decision was already public, making the forecast a real, checkable call rather than hindsight commentary.
8. Japan Bubble, China Discount
Asked directly whether he is bullish on Chinese equities, Gao said yes on a multi-year view but drew a sharp distinction between broad market beta and where he actually invests.
He said he sees a decade-long beta opportunity in Chinese equities comparable to Japan's 1970s run, but as a macro rather than equity manager, he leaves broad long-only beta exposure to others and expresses the view through currency and rates instead.
On Japan, he was blunt: it is in a bubble, concentrated in consumer names rather than the hottest sectors like AI. "Right now, PE is 50 times," he said of Fast Retailing, the parent of Uniqlo, contrasting it with comparable export-oriented Chinese consumer brands trading around 10 times earnings.
His trade idea from that gap: go long Chinese export-oriented consumer names and short their more richly valued Japanese counterparts over the next couple of years.
He was careful to separate Japan from South Korea in this call, saying only Japan looks bubbly to him, not the wider region.
Bonus Insights
Lee reminded Gao that one of his funds returned 76% in 2024, the year that made him known enough for Bloomberg to write about the trade. Gao said 2025 was also strong: "2025 made mid-20s." This year has been choppier — up in the first two months, down in March and April, up slightly in May, down again in June, and modestly positive in July — leaving the fund roughly flat for the year so far, which he framed as still doing its job of diversifying returns for allocators even in a hard year.
On running an Asia-focused macro fund, Gao said the opportunity set has historically shown up only about once a decade, and almost always on the crash side — the 1997 Asian financial crisis, 25 years of predictions of a Chinese collapse that never came, and bets against Japan between 2009 and 2012. He said the current moment feels different: China is not collapsing but challenging the US directly, and Japan has gone from crisis to what he calls a bubble on the back of a decade of quantitative and qualitative easing.
He argued only China currently has the capacity to run another large round of quantitative easing if conditions worsen, since Japan and the US are both constrained by inflation, even though he does not think Beijing is doing so now or plans to.
He pointed to RCEP, the world's largest free-trade agreement, as a proxy for how little Western investors understand the region: he estimated 80–90% of listeners would not recognize the name, despite it dwarfing the much smaller and now-defunct TPP in scale.
Bin Gao's bottom line is that the world already runs on a US-China axis rather than a G7 one, and that investors underweighting China are mispricing a country whose scale, in his account, most of the market still doesn't understand.
Products, Companies & Tools Mentioned
Waymo (Bought thousands of mid-size Zeekr vehicles from China to build out its robotaxi fleet — his example of indirect US-China entanglement)
Fast Retailing (The parent of Uniqlo, which he says trades at 50 times earnings — his example of a Japanese consumer bubble)
Nvidia (Named as one of the chips the US is restricting China's access to)
ASML (Its lithography machines are one of the specific export controls Lee asked about)
Books & Resources Mentioned
RCEP (The Regional Comprehensive Economic Partnership — the world's largest free-trade agreement, which he says most investors have never heard of)
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