Exclusive Interview with Billy Bi, CEO of East Asia China: "Cool China" Reconstructs Asset Valuation, Foreign Capital Presents "Defensive Foundation and Growth Allocation" Dual-Track Layout

AI Questions · Why Are Foreign Investors Shifting Toward Value and Growth Pricing Due to the “Cool China” Phenomenon?

By China Daily: Chen Chen Edited by Xiao Ruidong

Since the beginning of this year, the “Cool China” phenomenon—highlighting AI and computing power, high-end manufacturing, new energy, digital economy, biomedicine, and supply chain resilience—has attracted global attention and is profoundly changing foreign perceptions of China. In this context, is the global capital’s valuation logic for Chinese assets undergoing a restructuring?

To explore this, China Daily reporter (hereafter NBD) interviewed Mingtang Bi, Vice President and CEO of East Asia Bank and Executive Director of East Asia China. He pointed out that foreign investment valuation of Chinese assets is shifting from risk-based pricing to value and growth-based pricing, with greater emphasis on industry competitiveness and other alpha factors. Under the significant valuation and cost-effectiveness of A-shares and Hong Kong stocks, foreign capital is clearly adopting a “defensive baseline, growth increase” strategic layout.

Moreover, Bi not only deeply analyzed the new “valuation anchor” for re-evaluating Chinese assets but also advised domestic investors to abandon short-term speculation and embrace long-term industry trends. He emphasized that through diversified allocations across regions and assets, investors can effectively respond to external shocks and steadily share the long-term benefits brought by “Cool China.”

Introduction: Bi Mingtang has 28 years of professional banking experience, having held multiple senior management roles at financial institutions in Mainland China, Hong Kong, and overseas. Before joining East Asia Bank, he served as Executive Director, President, and CEO of CITIC Bank (International) Limited, and Chairman of CITIC Bank International (China) Limited. Bi holds a Bachelor’s degree in Management Information Systems, a Bachelor’s in Electronics and Computer Technology, a Master’s in Quantitative Economics from Tsinghua University, and a Ph.D. in Economics from Renmin University of China.

Valuation Logic Gradually Reshaping: From Risk-Based to Value and Growth-Based Pricing

NBD: Over the past few years, foreign investors’ valuation of Chinese assets has often been influenced by geopolitical sentiment, macroeconomic expectations, and other factors. Now, with the display of China’s industrial strength (such as new energy, high-end manufacturing, AI large models), do you think the valuation logic of global capital towards Chinese assets is undergoing a transformation? Under this paradigm shift, which core indicators are becoming the new “valuation anchors” for foreign investors?

Bi Mingtang: Previously, global capital’s valuation of Chinese assets was indeed affected by geopolitical sentiment, macro expectations, risk premiums, and other factors. As the “Cool China” concept has garnered widespread overseas attention—highlighting improvements in new energy, high-end manufacturing, AI large models, digital infrastructure, urban livability, and industrial efficiency—foreign perceptions of China are systematically changing. The valuation logic for Chinese assets is gradually being reconstructed, shifting from risk-based to value and growth-based pricing.

In the past, foreign investors focused more on macro growth rates, policy cycles, liquidity, and beta factors; now, they should pay more attention to alpha factors such as industry competitiveness, technological barriers, global market share, and profitability quality. The advent of “black box factories,” complete supply chains, and efficient infrastructure makes overseas investors more directly perceive the efficiency and innovation capacity of Chinese manufacturing. Uncertainty premiums are decreasing, and long-term growth premiums are rising.

A new valuation anchor is forming. First, earnings certainty and ROE stability, with industry structure optimization and increased concentration of leading companies; second, technological strength and global competitiveness, with valuation centers moving upward for companies with technological barriers and international competitiveness; third, cash flow and dividend returns, aligning with long-term funds like sovereign wealth funds and pension funds; fourth, the ability to expand industry overseas, with companies capable of replicating domestic advantages globally continuing to be revalued.

Overall, global capital’s view of Chinese assets is shifting from emotion-driven to fundamentals-driven, from short-term speculation to long-term allocation, with future valuations becoming more rational and aligned with the true fundamentals of high-quality development.

“Cool China” Could Be the Core Investment Theme for Capital Markets in the Coming Years

NBD: Compared to major global markets, what do you see as the core attractions of A-shares and Hong Kong stocks? Will the industrial advantages represented by “Cool China” (such as supply chain resilience and technological innovation) translate into investment logic in capital markets?

Bi Mingtang: From a global perspective, the attractiveness of A-shares and Hong Kong stocks mainly lies in valuation advantages, industry structure scarcity, and asset resilience, and the industrial strengths of “Cool China” are indeed transforming into key investment themes in capital markets.

First, valuation has a significant comparative advantage globally. Compared to major indices in Europe and America, core assets in A-shares and high-dividend stocks in Hong Kong, as well as tech giants, remain at historically low levels, offering high safety margins. In an environment of high valuations, high interest rates, and volatility overseas, Chinese assets are particularly attractive for long-term capital.

Second, A-shares and Hong Kong stocks are complementary, covering the entire spectrum of new productive forces. A-shares focus on hard tech, high-end manufacturing, and new energy; Hong Kong stocks emphasize quality internet platforms, international consumer brands, and biomedicine leaders. Together, they provide global investors with a comprehensive toolkit for China’s industrial upgrade.

Third, industry advantages are increasingly translating into investment logic. First, supply chain resilience has become a core value—complete industrial systems, efficient infrastructure, and intelligent manufacturing make Chinese manufacturing a “stabilizer” globally. Second, technological innovation is moving from concept to performance, with AI, computing power, new energy, and smart driving scaling up. Lastly, going global opens growth space, with advantageous industries expanding from domestic demand to international markets.

As previously mentioned, foreign investors’ view of China has shifted from macro cycles to industry, leading companies, and global competitiveness. “Cool China” is not just a current trend but could become the most important investment theme in the capital markets over the next several years.

Foreign Investment Holdings Show a “Dual Strategy”: Defensive Base and Growth Increase

NBD: Based on recent foreign holdings data of Chinese assets, what trend changes have you observed? Are they more inclined toward “defensive allocation” (such as high-dividend assets), or are they increasing their positions in growth sectors? What are the core drivers behind this shift?

Bi Mingtang: From recent foreign holdings, capital flows, and institutional behaviors, a clear “dual strategy” of “defensive baseline and growth increase” is evident. It’s not simply a binary choice but a structural optimization under gradually rising risk appetite.

On one hand, high-dividend, low-volatility assets remain the core holdings. Foreign investors favor banks, energy, utilities, and other sectors for stable cash flows, dividend ratios, and earnings certainty. These assets act as “ballast” in portfolios, especially in an environment where global interest rates are uncertain and geopolitical tensions are complex. They are standard long-term holdings.

On the other hand, foreign investors are increasing their allocations to growth sectors. There is a noticeable rise in research and holdings of AI, computing power, new energy, high-end manufacturing, and innovative pharmaceuticals. From cautious observation to active deployment, this shift indicates recognition that China’s growth stocks have bottomed out and industry logic is strengthening.

The core drivers behind this are threefold. First, profit recovery—after adjustments, industry competition patterns have improved, profit margins are rebounding, supporting growth stocks’ fundamentals. Second, re-recognition of industry competitiveness—“Cool China” has shown overseas capital China’s real advantages in hard tech and smart manufacturing, shifting focus from concerns about uncertainty to long-term growth potential. Third, global rebalancing needs—overseas markets currently have higher valuations and greater volatility, while Chinese assets are reasonably valued, prompting diversified allocation and increased weight in Chinese assets.

In summary, foreign investors are using high-dividend assets to defend the baseline, while increasing allocations to growth sectors for long-term gains. Their allocation behavior is becoming more mature, long-term, and focused on leading companies.

Aligning “Cool China” Industry Themes with Domestic and Foreign Consensus Leaders

NBD: As an executive of a foreign bank, what advice do you have for Chinese domestic investors? In the context of global capital flows and industrial transformation, how can they better seize the investment opportunities brought by “Cool China”?

Bi Mingtang: As a foreign bank serving both domestic and international clients, I offer the following suggestions. The core is: abandon short-term speculation, embrace long-term industry trends, and adopt a global perspective for local investments.

Specifically, first, focus on the “Cool China” industry theme. Don’t just stay at the conceptual level—deeply observe which industries can truly deliver performance, such as new energy, AI and digital economy, high-end manufacturing, biomedicine, and branding consumption. Invest in industry upgrades and leading enterprises, not just follow short-term news. The real opportunities come from China’s rising position in the global industrial chain.

Second, combine local insights with global comparisons for cross-validation. Domestic investors are more sensitive to policies and industry dynamics, while foreign investors excel at global valuation and long-term pricing. Pay attention to foreign allocation trends and identify high-conviction, high-coherence leaders. These tend to be more resilient and sustainable. Also, consider global diversification—using cross-border assets to hedge risks and achieve domestic-international complementarity.

Third, build a “core + satellite” portfolio. Allocate a core position in high-dividend, cash-flowing, stable-growth leaders to ensure portfolio stability; supplement with satellite positions in growth industries to share long-term industry upgrade benefits. Avoid chasing highs, avoid over-concentration, and trade infrequently. Long-term holding and rebalancing help navigate market volatility.

Finally, prioritize multi-asset diversification. Besides stocks, include quality bonds, fixed income-plus, commodities, and structured products to reduce overall portfolio volatility. For investors, constructing a balanced, dynamically adjustable portfolio based on core allocations is the key to steady progress through market cycles.

In summary, seizing “Cool China” opportunities depends on long-term vision, precise selection, disciplined holding, and steady allocation.

Diversified Assets for Defense and Cross-Region, Cross-Asset Hedging Against Market Volatility

NBD: Despite the advantages shown by “Cool China,” geopolitical issues and global economic slowdown may still impact foreign investor confidence. What do you see as the main risks facing foreign allocations to Chinese assets? Can these risks be hedged through asset allocation?

Bi Mingtang: Opportunities and risks always coexist. While optimistic about the long-term trend of “Cool China,” we must objectively acknowledge external uncertainties and use professional, diversified asset allocation strategies to manage market fluctuations.

The main risks we focus on include three categories: First, external geopolitical and sentiment shocks—which can cause short-term market volatility and capital flows. Second, possible slowdown in global economic growth—affecting external demand and supply chain expectations. Third, sectoral structural divergence—different industries’ cycles vary, potentially causing sector-specific volatility. However, these are mostly short-term, phase-specific disturbances and do not alter China’s long-term industrial upgrade and economic growth fundamentals.

We recommend diversified, cross-regional asset allocation to hedge these risks. First, cross-regional diversification—investing in both domestic and international markets to leverage valuation, capital, and industry differences for risk reduction. Second, cross-asset allocation—combining stocks, bonds, commodities like gold, and structured products to lower overall portfolio volatility. Third, focusing on globally competitive leading companies—which have stronger cycle resilience and better overseas expansion logic—helping hedge domestic macro risks. Lastly, long-term holding—market emotions are temporary; quality assets will ultimately revert to fundamentals.

As a foreign bank, our advice is: diversify broadly, allocate professionally, and use asset mix strategies to navigate uncertainties. Chinese assets will become increasingly valuable in global portfolios. Maintaining diversified, long-term holdings can not only reduce overall volatility but also enable investors to share the long-term dividends of “Cool China.”