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APS China Monthly

The APS China Monthly* is a collection of thought pieces and is part of our commitment to be your partner in understanding and investing in China.

Synopses of the APS China Monthly are presented here and registered users may access our thought pieces here.

*The APS China Monthly was previously known as the APS China Quarterly.

APS China Monthly

jUNE 2024

Since President Xi Jinping took charge as the leader of the Communist Party of China, he has taken on two major political tasks. The first is to “purify” the party’s top echelons through a tough, sustained, wide-ranging anti-corruption campaign. The other is to untangle the relationship between some elements of the CPC and private capital, especially tycoons symbolized by, but by no means limited to nor focused on, Alibaba founder Jack Ma.
In his piece “Xinology: Understanding China and Xi”, APS China Vice Chairman Dr Tan Kong Yam looks at graft busting to restore the CPC’s moral authority and legitimacy, the leavening of Marxism with Confucianism and Buddhism, efforts to avoid a beholden political class, industrial production, the role of capital, and not betting against Five-Year Plans.

May 2024

Predictions of an economic collapse in China are back in vogue again, fueled by influential figures like Stephen Roach, Adam Posen, and Richard Koo. For years, China has attracted endless predictions of an economic crash, with magazine covers and essay titles emblematic of the West’s somewhat muddled emotions and hence approaches towards dealing with China, a conflicted mix of the “China Threat” and “China Collapse” themes. 

Never mind that this stopped clock, normally correctly telling the time twice a day, has yet to be right even just once. While the doomsayers may have been horribly wrong in the past, but could they be right this time? Would China see the greatest crash ever? 

This possibility prompted me to take a four-week trip to six cities straddling March and April, where I met with founders, CEOs, senior executives of companies and old friends in China, with the triple objectives of measuring the pulse of the economy, assessing China’s future, and to take a deep dive into the “hard tech” sector, especially semiconductor companies. I also took the opportunity to re-examine the investment theses for our portfolio stocks and to identify new investment ideas.

I share with you my findings and thoughts after this latest stretch out “in the field”.

April 2024

China’s local government financing vehicles (LGFVs) is an opaque topic that has been top of mind for investors. This APS China Monthly piece by our financials and real estate analyst Kevin Jiang is intended to cast the light on it, and in the process, debunk some of the myths.            

Will LGFVs and their debt bring down China’s economy? What are the roots and the solutions, both short-term and long-term?

March 2024

Many global investors have capitulated, or are on the brink, as China’s equity markets remain in the bone-chilling grip of a brutal derating. As is often the case, we at APS Asset Management think it is instead time to rouse ourselves from the winter chill and sharpen our plowshares for the planting season. 

APS Deputy CIO Stella Zhang will highlight the tailwinds that will propel both China’s sustained economic growth, as well as investor returns in an equities rerating.

After a three-year bear market, the risk-reward ratios for many Structural Alpha as well as Economic Alpha stocks have never been this attractive. 

There is a right price for everything.

February 2024

In his piece ‘China’s “EV Valley’s”’, APS China Vice Chairman Dr Tan Kong Yam looks at the roots of China’s “new industrial policy with Silicon Valley characteristics” – which deftly combines light-touch state guidance with Darwinian characteristics, EV-related companies versus e-commerce tycoons, China’s blueprint for high-tech and "strategic" industries, the politburo’s capable technocrats, and the need to pick the winners in China’s varied New Silicon Valleys across the nation.

january 2024

The James Webb Space Telescope, Earth’s most powerful, may well upend what was thought to be settled science about the birth of the universe. One early lesson from Webb is “to let go of your expectations and be ready to be surprised,” said a researcher.
We at APS Asset Management feel the same way about China’s future and its equities markets. 
In our holiday read “Telescoping China”, we peer into China’s investment universe with our version of the Webb Telescope, looking at fading stars, new stars, bright stars missed, possible supernovas, and more. We end off by sharing our thoughts on the two most important investment questions for 2024.

December 2023

We are doing a double issue as usual, for the year-end holidays.

In “My Bomb, Your Bomb”, Raymond Lim, APS chairman and former Cabinet minister in the Singapore government, discusses the evolving security situation in Northeast Asia in the light of the Ukraine War.

Our investment strategy for 2024 will be the second issue which will be out in mid-December.

November 2023

Is the Chinese economy suffering from a balance sheet recession, like Japan from the early 1990s? This question has attracted attention and debate amongst economists, the IMF, and naturally, investors.

Is it correct to say that China is already undergoing Japanification? This is no laughing matter as it means a decade or two of spirit-sapping deflation, with property prices likely plunging another 50%-70% and stock prices halving from current levels.

I will offer my thoughts from an investor’s perspective, tapping into my experience living and working as a portfolio manager right smack in the epicentre of Japan’s bubble years, as well as a quarter century of investing in China. I will compare and contrast China’s property markets, stock markets, PBOC policymaking, bank lending and corporate borrowing, as well as China’s stage of economic development, with Japan’s.


A new space race has begun. Supremacy in the adoption of AI — which is as critical to 21st century modernization as 5G technology — will soon become the linchpin for productivity gains, new markets of growth, national security applications, becoming synonymous with technological supremacy.
China may well succeed before 2030. APS semicon-engineer-turned-sector-analyst Russell Cai and analyst Wong Qi Yang look at the four key facets of the unique dynamics in China’s budding AI ecosystem, which inform our optimism, as well as the roadblocks and tailwinds. 
China’s success in the AI race is a cornerstone of the country’s long-term investment thesis. For investors, they must look beyond the current hype and search for the long-term winners.

september 2023

China is intent on blazing a fresh path, with a new development model that is more inclusive, shifting away from the old development path of excessive investments in real estate and infrastructure.

In “A New Economic Path”, APS China Deputy Chairman Dr. Tan Kong Yam estimates the pace of growth during this transition as well as its duration, suggests how measures that improve household welfare to enhance consumption as a new engine of growth can be funded, and explains why the danger of a Lehman moment is much less likely in China.

He also shares his view on what it means for various segments of Chinese society, and the sectors that will play leading roles in China’s economy for years to come.

August 2023

China’s post-Covid consumption recovery has fallen short of many investors’ expectations. The recent 618 sales event, for example, was much weaker than expected and outbound travel has remained well below pre-Covid levels. However, we would describe the recovery as uneven and not an indication that the long-term trend in consumption upgrading has ended.

In this note, our consumer analyst Wang Jiayuan explores the drivers behind an “M-shaped” recovery where high-end and low-end consumption fare better than mid-range segments, as well as the divergent trends and their investment implications.

July 2023

When it comes to investing, you should always probe, ask why, and be critical, because there might be opportunities for you to capitalize on. In a keynote address at the 17th annual APS client event in Shenzhen in May, I shared with the audience eight myths – some baffling, some amusing, and some distasteful. Investors will do well to look at China through a clear lens, on matters like Taiwan, long-term investing, China ADRs, and common prosperity.

June 2023

In President Xi Jinping’s new leadership team, Premier Li Qiang is akin to a character with a red mask in Peking Opera, which symbolises a positive character with qualities like prosperity, loyalty, courage, and heroism. Cai Qi takes on the black mask, a character with a serious and taciturn disposition that suggests a certain strength and roughness. These are the two persons to watch in President Xi’s inner circle. His will, their hands.

In “The New Peking Opera”, APS China Vice Chairman Dr Tan Kong Yam looks at how these “two faces” will interplay and shape China’s economic policy in the coming years. He also explores a comparison of Xi Jinping to Theodore Roosevelt during America’s Progressive Era as well as the CCP versus Japan’s LDP. Lastly, he gives us a glimpse of what may come towards the end of the Xi era.

May 2023

Huawei, within a span of just several years, stepped up onto the world stage and became a leader for telecom equipment and consumer electronics, building a world-class company powered by “strategic-minded lions” and “process-oriented monkeys”. This piece by APS Head of Investment Strategy Wang Kangning looks at some of the key factors that drove Huawei’s success, pointing out other companies that have similar DNA and have themselves become industry leaders.

Do not be surprised to see many more Huaweis emerging in the coming years.

APRIL 2023

Over four weeks straddling February and March, I met with founders and CEOs from a dozen listed companies, as well as senior executives from another 10 listcos. I also met with the founders and senior executives from a further six companies that remain privately held. Our research trip’s twin objectives were the re-validation of the investment theses for a dozen portfolio stocks, and to look for new investment ideas.

At this stage of China’s economic development and the challenges faced in its external environment, we believe a portfolio comprising predominantly Structural Alpha stocks in the hardware and software sectors, as well as Economic Alpha stocks, should yield steady alphas. We also have a new alpha basket, which we label as Covid recovery alphas.

Although each visit was at least two hours, it was the informal interactions with these business leaders, over meals and drinks, that were most insightful because one gets to know their visions for their companies and is also able to look through the windows into their psyches. Many were candid. I share my findings and my observations in this note.

March 2023

Contrary to some Western analysts' assessment, China's Communist Party has always been highly adaptable and pragmatic. From its beginnings in 1921, to 1935 during the Long March, then the post-1949 Mao Zedong era, to Deng Xiaoping’s leadership from the 1970s, then under Jiang Zemin at the turn of the century, to the current leadership team led by President Xi Jinping — the lodestar that guides the Chinese Communist Party is that it remains China’s dominant political power, to drive China’s modernization.

Political ideologies are but a means to that end. In essence, the CCP is more pragmatic than dogmatic.

In “The Pendulum Swings Back To Pragmatism?”, APS China Vice Chairman Dr Tan Kong Yam looks at the latest swing of the pendulum towards pragmatism; the private sector’s critical role in employment creation, growth, and the CCP’s political legitimacy; the red line of challenging Party supremacy; how the power dynamics between the different factions will take shape over the next 10 years under Xi, Taiwan; and lastly, investment implications for global investors.


We have held the view since last year that a potential change in the country’s approach to Covid would have the single greatest policy impact for the economy in the short term.    
Now that China’s “zero-Covid” policy is behind us, this month’s essay “Portfolio Strategy for a Post-Covid Recovery” by Deputy CIO Stella Zhang explores the potential path for the economy’s recovery and the investment opportunities we see.

January 2023

We’ve had a tumultuous 2022.

Our holiday read – “A Tale of Two Chinas” – looks into 10 big issues for global investors navigating China’s equities in 2023, such as the prospects of a two-sun global economy, two divergent views on China’s future, the two eras of China’s internet stocks, and where we are in this cycle.

We’ve said that China marches to the beat of its own drums. How about China’s domestic equities?
Our “The Big Picture” looks into this.

December 2022

We are doing a double issue once again, for the year-end holidays.

The first which is attached is a feature essay by APS China Vice Chairman Dr. Tan Kong Yam – “After The 20th Party Congress – Whither China?” – which examines President Xi Jinping’s key priorities coming out of the 20th Party Congress, his new leadership team, and the implications for global investors.

My outlook for 2023 will be the second issue which will be out in mid-December.


China’s property industry has been a key economic growth engine for China over the past two decades, contributing roughly 25% of the country’s GDP. However, it has been enduring a major deleveraging process since the second half of 2020, after the introduction of the “three red lines” policy. In this piece, our financials and real estate analyst Kevin Jiang examines the genesis of the tightening policies and future prospects for the “Survivors”, and we also share our thoughts on the long-term impact on the economy.


After the political horse-trading season at the Beidaihe Conference ended in mid-August, President Xi Jinping likely reached a certain degree of compromise with all factions, ahead of the 20th Party Congress that will convene on 16th October where Xi will aim to break convention by securing a third consecutive term as President.

While most political analysts believe that there is no strong evidence to suggest that Xi would fail, Professor Tan Kong Yam, Deputy Chairman of APS China Asset Management, is of the view that one must not rule out the possibility that senior Party cadres might have successfully persuaded Xi to step aside. There are hints of this less likely scenario in recent subtle events, against a backdrop of tough zero-Covid measures, a hard-hit economy, and badly shaken investor confidence.

That said, in all likelihood, Xi will prevail and several of his protégés are likely to get promoted to the Politburo Standing Committee (PSC), as well as advance into key appointments in the military. Professor Tan takes a brief look at those personalities, the person we think will likely be China’s next Premier, as well as what may happen if Xi’s health falters in the coming years.


Some global investors ask: Is China investible?   

Professor Tan Kong Yam, Deputy Chairman of APS China Asset Management, believes this is the wrong question.    

The appropriate question is: How best to invest in China under Xi’s doctrine? Which companies will continue to reflect China’s relatively higher growth rate and prove to be an asset class less correlated with global returns?    

For answers, Prof Tan analyzes President Xi Jinping’s journey from vowing to give market forces a “decisive role” in 2013, to the actions taken over the past two years to corral the wild horses, putting guardrails around the markets and the economy.


The Japanese economic miracle hit its zenith in 1989, before collapsing under the weight of investor hubris, loose lending standards, excessive risk taking, and central bank recklessness. As a group, we professional investors have this tendency to behave like lemmings once every decade, and do not seem to learn the lessons from history – the 1600s Tulipmania, the 1700s Mississippi Bubble, the TMT bubble of 2000, et cetera.   

Through the eyes of a young professional Tokyo-based fund manager, we travel back to that 1980s go-go era in what seemed to be the Land of the (Forever) Rising Sun, not for good old nostalgia, but to distil the lessons from probably the biggest, craziest bubble in modern times. Hopefully, it can help us sidestep today’s bubbles, and guide us to safer spots.    

I share my view of four key contributory factors of bubbles, China’s recent and current bubbles as well as those across the Pacific Ocean, what remains investable in China, and a possible “changing of the guard” among tech-focused fund managers who have achieved phenomenal successes on the back of this latest “tech stock” bull run. 

july 2022

Until just five quarters ago, China internet companies had been the place to crowd for phenomenal returns. However, the bull run came to an abrupt stop after the much-hyped IPO of Ant Group, the financial arm of Alibaba, was suddenly called off on the eve of its debut. Regulatory crackdowns alone cannot explain the sector’s whopping 73% crash from the peak. 
APS Senior Investment Director Wang Kangning takes us through the reasons that are more fundamental to the changing landscape of the sector: growth strategies that went awry, diminishing online traffic “dividend”, and increasing participation of short-term investors. 
While these headwinds are unlikely to turn around in the next few quarters, long-term minded investors should actively look out for the next wave of innovations at a time of pessimism. In the digitization of China’s transactions, numerous fronts are yet to be conquered.

JUNE 2022

In this month’s essay, APS Founder and CIO Wong Kok Hoi shares some of the findings from his recent trip to Canada and the US, on subjects like a two-sun system in the geopolitical sphere, Internet stocks, and China’s Covid strategy.

MAY 2022

Despite a slowing economy, the challenge of strict lockdowns to slow the Omicron variant, and the Ukraine crisis, President Xi Jinping is likely to emerge strong after the key October 2022 meeting of China’s top political leaders. 
In this month’s essay, APS China Deputy Chairman Professor Tan Kong Yam looks at how an extended tenure for Xi as the leader of China would influence government policy, US-China relations, and implications for global investors.

APRIL 2022

This month’s essay “Alphas from a Modern China” by Stella Zhang discusses several alpha clusters that ride on China’s transformation from a labor intensive, low value-add economy to a capital intensive and innovation driven high value-add economy.

Identifying long-term trends is a cornerstone of our investment process as socio-economic developments in China are often driven by generational objectives and tend to be long-lasting. This is why APS strives to truly understand China, to both take advantage of these trends as well as avoid risks.

MARCH 2022

This month’s essay “Avoid Standing Naked When the Tide Goes Out” discusses our portfolio strategy in what is expected to be another extraordinary year in markets.


President Xi Jinping has called the upcoming 20th Party Congress later this year “a major event in the political life of the party and country”. This essay by Tan Kong Yam explores the inner workings leading up to this milestone occasion and implications for global investors.

We wish you happiness, good health, and prosperity in the New Year of the Tiger.


December has been an eventful month so far.
US President Biden held a virtual “Summit for Democracy” inviting such leading lights as Pakistan and the Philippines.
Our holiday read – “Captain Marvel and the Chinese Crusade” by Raymond Lim – is apposite here.
This is a beautifully written essay which looks into whether China is a monster to be slayed.
December 11 was the 20th anniversary of China’s ascension to the World Trade Organisation. 
Our “The Big Picture” looks into this.


We are doing a double issue for the year-end holidays.  

 The first which is attached is a feature essay by me – “Burning issues of 2022” – which is my outlook for the next year and addresses amongst other issues on whether China is still investable given recent regulatory system shocks.   

 The other which will be out in mid-December is an engaging read by Raymond Lim on “Captain Marvel and the Chinese Crusade”.   

We will tell you more closer to the date but do look out for it as we are confident you won’t be disappointed by it.   

November 2021

Our feature essay – “The Digital Renminbi: China’s Escape Route?” by Tan Kong Yam and Cai Haoxiang touches on a central issue that will be closely watched in the years to come.


Welcome to the inaugural issue of the APS China Monthly.

Our feature essay – “The Taiwan Question” by Raymond Lim – addresses an issue that are on many investors’ minds today.  

JULY 2021

In this quarterly issue, Raymond Lim in “Sino-US: Hinge Moment?” looks at the argument that has caused much hand wringing in the West on whether the pandemic marks a hinge moment in history between democracy and autocracy, with the latter apparently winning. I commend you to read it as the chairman of our firm addresses this in his usual forthright and lucid way.   

Professor Tan Kong Yam and Cai Haoxiang in “How China Found its Confidence and Voice” take us through the thoughts of influential Chinese leaders, so that we can perhaps better understand the direction of Sino-US rivalry. While it is clear who, and which ideas are currently dominant, in a country as large and as complicated as China, there remains a diversity of views on what kind of country China should be.   

There is also some diversity among the sources of clean energy that will underpin China’s commitment to becoming carbon neutral by 2060. In “China’s Net-Zero Promise: Secure, Clean, and Profitable”, Wang Kangning looks at the varied sources of Structural Alpha for the portfolios of global investors as China practically rebuilds the structure of its economy, disrupting the current energy system in its tilt towards wind, solar, and hydrogen. For what China sets her mind to achieve, invariably gets done.   

Going forward, to better serve our investors, we will increase the frequency of our China thought pieces from the current quarterly to a monthly – APS China Monthly – starting from 1 October.

April 2021

In our January Talk China webinar on “Hard Truths for 2021”, our investors asked me about the most important issue among the 10 hard truths for this year, the motivation behind China’s move against Alibaba, the relevance of growth versus value in China, and a number of other questions ranging from portfolio positioning to pandemic policy. In this edition, we share with you my answers to those questions that are germane to successfully investing in China for the long haul. 
Professor Tan Kong Yam, Kanishk Kakkar and Jason Yap show in their piece “Is China Winning the Trade War?” that the Sino-US trade war is not over, and China is still playing its long game of “Go”. The key battlegrounds have however shifted to the ASEAN (Association of Southeast Asian Nations) and European Union (EU) regions. They share why the manufacturing and trading of goods not considered to be of strategic importance will likely still be carried out in the ASEAN bloc, with China at the centre and effectively still the world’s factory, its workers forming a rich pool of consumers waiting to be tapped. 
Every day, millions of Chinese consumers enjoy a mindboggling variety of shopping choices, with rapid technological and logistical developments in China allowing them to now buy anything they want, anytime and anywhere they want. In “China Consumer: The Value Hunt”, Chris Xu and Cai Haoxiang draw our attention to fast-rising domestic Chinese brands, a segment that international investors tend to overlook when investing in China’s burgeoning consumerism. Offering quality goods at a reasonable price, domestic brands tap on innovative channels like livestreaming to win over younger, cash-rich consumers in lower-tier cities. Some of these brands can even go global. This is where the money is, rather than the usual e-commerce and logistics suspects.


Economies and healthcare systems across the globe start the new year battered and bruised by a wily virus that has defined 2020. As the United Kingdom took the lead in starting mass vaccinations in December amidst Covid-19 flare-ups, many investors are pricing in an imminent exit from pandemic conditions and a return to normal life. We think these hopes are premature.

In “Hard Truths For 2021”, I share with you my views for 2021: China’s probable 8%-10% economic rebound in 2021 and the fast forwarding of its anticipated return to the apex of the global economy around 2025, the resilience of Covid-19, rocky Sino-US relations, China regulating tech rather than punishing Jack, China e-commerce being more bubble than magic, the danger of Modern Monetary Theory and a plummeting USD, the revival of value investing, as well as the challengers to China’s crown as the world’s factory. 
In “Silver Bullets and Magic Wands – Can Covid-19 Vaccines Save 2021?”, Dr Sarah Li Yun examines topics such as the odds for vaccine “surgical strikes” eliminating the coronavirus with no collateral damage and no masks in sight, as well as the realities and myths of vaccines. 
In an extraordinary year like 2020 that saw all major economies contract painfully, China would not have posted 2%-3% growth without a strong domestic economy. Professor Tan Kong Yam and Cai Haoxiang show in their piece, “China’s Two-Horse Economy Will Canter On”, how Covid-19 and the trade war has given the country a powerful nudge towards a consumption-driven economy. Investors should continue to bet on the domestic demand horse, which can pull China ahead of other countries in the years to come. 

October 2020

The United States’ presidential election in a month’s time is one of those defining moments in its history. Whether it will be more “American Carnage” or the return of the “Audacity of Hope”, it will also have an impact beyond its shores. In “Sino-US: Dominion”, Raymond Lim looks at this most important bilateral relationship in the world.

Jason Yap, Cai Haoxiang and Professor Tan Kong Yam discuss in their piece, “Breaking up with China is hard to do”, the impact of COVID-19 and rising Sino-US tensions on supply chain disruption across large and small companies globally, and explore the case for a global supply chain re-configuration, focussing on the US and China and the associated risks and opportunities.
In “Schrödinger Cat Walks Down Wall Street”, Wong Kok Hoi makes the case that one set of investment fundamentals can only lead to one outcome, no matter how many interpretations. The ultimate mathematics of investing is that the present value of the company must be about equal to the present value of all future cash flows most of the time, and there have been no exceptions in the history of investing. Any large deviation from this in the short term, such as the exuberant stock market rebound since March, will be brought back to reality by this investment axiom. 

JULY 2020

Even in the midst of the coronavirus crisis, US-China tensions continue to ratchet up in the South China Sea. Raymond Lim’s piece on “What Xi’s China Wants” looks at why the South China Sea is the principal arena where the contest for strategic dominance by these two great powers is being played out. 

In this contest, China draws strength from a rising grassroots nationalism led by the post-1990, post-Deng generation. In “A Brief History of China’s Economic Transformation: A Personal Perspective”, Professor Tan Kong Yam examines the investment impact of this younger generation’s unfolding attitudinal transformation towards Chinese brands, at the expense of foreign ones.

Finally, in “Why China Now?”, Stella Zhang and Chris Xu take on the naysayers and make the case why it makes sense to invest in China. 

April 2020

In “China: From Panda to Dragon”, Raymond Lim a former Cabinet Minister in the Singapore Government, discusses the geopolitical impact of China’s rise in Xi Jinping’s New Era. This is particularly germane as never before has geopolitics impacted so much on markets.   

The next essay “China politics in the age of the coronavirus” is by Professor Tan Kong Yam, a China expert who worked previously in the World Bank’s China office. He examines the impact of the coronavirus on the factional dynamics between the liberal and nationalist factions in China.   

Finally, in “Death to China?”, Wong Kok Hoi, Founder and CIO of APS Asset Management argues how difficult it is for the US to try to kill off China’s economy through decoupling and other measures.