China's top economic planner has announced a 4 trillion RMB five-year investment in a national computing power network, on Raymond Cheng's account of the July Politburo meeting.
The country's equity indexes have gone the other way. Onshore A-shares have reversed course since midyear and erased all of the gains made at the start of the year, and China's monthly economic releases have come in below expectations.
"Record high summer movie theater admissions and the staggering markups young mainlanders are paying for live concert tickets on the black market suggest that the Chinese consumer is not absent."
Cheng runs Standard Chartered Bank's investment strategy for North Asia and recorded this fresh off a trip to China, so the segment is his own read on the ground set against the published data.
I listened to the full segment so you can skip it.
Here are the 6 takeaways that matter.
👤 Speaker: Raymond Cheng, chief investment officer for North Asia at Standard Chartered Bank, who recorded this after a trip to China
📰 Published: 1 September 2026 on YouTube (Standard Chartered Wealth Insights)
🔴 YouTube | 🟢 Spotify | 🟣 Apple Podcasts | 🔗 Show notes | ⏱️ 5 min
Key Takeaways
China's broad equity indexes cannot rally on AI alone, because AI is barely in them Listed AI companies are under-represented in indexes still dominated by traditional cyclical industries
The pullback in Chinese technology stocks since July is the entry point, not the warning US technology stocks recovered over the same stretch on strong earnings; onshore and offshore China technology did not
The Chinese consumer is selective rather than absent, on evidence from cinemas and concert tickets Cheng said what he saw in the country differs from the widely held view that consumption is weak
China's planners have put 4T RMB behind a five-year computing power build Cheng said it answers demand rather than only the case for technology self-sufficiency
Two A-share listings this summer show the money arriving alongside the policy
Chinese government bonds earn their place on correlation, not on yield Their returns are uncorrelated with developed markets that are dealing with inflation
1. A-Shares Erased the Year
Cheng opened on the setup rather than on the call. Since midyear, onshore A-shares have reversed course and erased all of the gains made at the start of the year, and China's monthly economic releases have surprised on the downside, which he said has fueled skepticism among global investors.
The economy is splitting in two, in a pattern Cheng called a K-shaped transition: artificial intelligence and high-end industrials are booming, while traditional industries carry excess capacity and muted domestic demand
The question he set himself from there was how an investor should position in the world's second largest economy
2. The Consumer Is Selective
Widespread concern about Chinese consumption rests on job insecurity and income instability. Cheng said his own observations point the other way.
His evidence is entertainment spending rather than survey data. "Record high summer movie theater admissions and the staggering markups young mainlanders are paying for live concert tickets on the black market suggest that the Chinese consumer is not absent." He said his observations on the ground tell a different story from the consensus, and that the consumer is merely selective
That reading of the household sector is what he said informs the bank's investment strategy
3. AI Is Missing From Indexes
Index composition is the reason he will not call a broad rally. Listed AI equities remain under-represented in China's equity indexes, which are still dominated by traditional cyclical industries. "Without a broad-based economic recovery, it's difficult to foresee a notable rally in the broad China indexes."
The divergence since July is what creates the opportunity. Technology stocks in both onshore and offshore China markets pulled back notably, while their US counterparts recovered lost ground on strong earnings "We view this pullback in China equities as a unique entry point."
The recommendation that follows is targeted rather than broad: exposure to China's AI ecosystems and to power and electrification, two themes he said enjoy incremental policy support
4. 4T RMB for Compute
The number came out of the July Politburo meeting. "Following the July Politburo meeting, the National Development and Reform Commission announced a 4 trillion RMB 5-year investment in the National Computing Power Network."
Cheng framed the spending as demand-led rather than defensive. "This is not just reflective of China's tech self-sufficiency motivation. It is a response to growing demand."
5. Two IPOs Show the Backing
Funding for that build is materializing as well, Cheng said, and he pointed at two sources.
Government bond issuance has increased
Two high-profile Chinese corporates were cleared for A-share initial public offerings this summer: an iconic robot maker and the world's fourth largest DRAM chipmaker, in his description Both stocks have risen sharply since listing, which he said signals "that Chinese authorities and capital markets are supporting the new economy"
6. Bonds and a Weaker Dollar
Investment opportunities in China extend beyond equities, Cheng said.
The case for Chinese government bonds is correlation, not yield. "Chinese government bonds are an effective portfolio diversifier, offering returns uncorrelated to the developed markets facing inflationary pressures."
He expects longer-dated Chinese government bond yields to fall, which would lift the price of those bonds, and said a weaker US dollar could add to the return on top of that
Bonus Insights
The concern he was answering is a specific one: consumption weakness driven by job insecurity and income instability, which he described as widespread rather than as his own view
He identified the two new listings by rank and industry rather than by name, so neither company is named in the segment
The allocation he ended on balances growth against income: growth equities diversified across AI, high-end industrials and electrification, held alongside quality dividend equities and Chinese government bonds
Cheng's bottom line is that the broad China indexes are not the trade, because the parts of the economy that are growing are barely represented in them, and that the way in is targeted exposure to what policy is funding.
Products, Companies & Tools Mentioned
National Development and Reform Commission (China's top economic planner, which Cheng said announced the 4 trillion RMB five-year investment in the National Computing Power Network after the July Politburo meeting)
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