2025 Prospect

1. Summary: A year of great uncertainty

2. Current situation China is facing: Mounting challenges

1. Domestic and foreign affairs

• The established norms of generational succession in the Central of the Communist Party have been disrupted,
• Instead of institutionalizing sound governance, there has been a shift toward back to authoritarian ruling by man rather than by law,
• U.S.-China confrontations in foreign exchange, finance, trades, and tech industries will only deepen and expand.

2. Economic Issues

• Insufficient effective demand across the whole economy,
• Previous development model has resulted in severe distortions in resource allocation and long-term structural imbalances,
• Social distribution regime which is fundamentally flawed, coupled with poor wealth and asset management, has led to enormous waste of social resources and social inequality.

3. Social regime

• Inability to fully embrace marketisation, and the reverse effects of the "pooling national resources" becoming increasingly apparent,
• Basic institutions such as human rights and property rights have lagged behind the developing demand of economic growth,
• Divergence of ideological direction: state capitalism, one-party authoritarianism, or nationalism?

4. Culture challenges

• Social common values have not been kept pace with economic development,
• Traditional Chinese culture over millennia offers diverse solutions to contemporary issues, restricted cultural evolution space and widespread loss of humanistic values exacerbate social differentiation and instability.

3.Global Landscape: a shift from US-led Unipolarity to Multipolarity

1. USA

• President Trump’s pursuing short-term economic returns and addressing American debt problem will weaken military influence and the credibility of dollar-denominated capital.

2. Europe

• Russia-Ukraine war has shattered post-world-war-two peace and geopolitical balances, eroding Europe’s long-term competitive advantages in cheap energy from Russia, low-cost military system relied on NATO, and talent influx from Eastern Europe.

3. China

• Taiwan issue has grown more delicate amid U.S. preoccupations with conflicts in Ukraine and the Middle East. U.S. entanglement in these regions could present a historic opportunity for China.

4. China’s Future Choices: Reform or Regression?

1. Fiscal and monetary policies

• Fiscal stimulus, Treasure Bond issuance, and deficit spending will definitely provide buffers, but systemic inertia of the bureaucratic, economic and financial structures, serving the real estate development for the last two decades, has complicated the adaptation to new developing models.
• Uncontrolled credit expansion in the bank system has left policymakers overly cautious and reactive.

2. Central vs. local government relations

• The tension between local autonomy and central oversight has resulted in a systemic decline of local governance capacity. Counterproductive regulatory interventions have crippled prospects for sustainable growth.

3. Exchange Rates and Interest Rates

• Among the trilemma of "monetary policy autonomy," "exchange rate stability," and "capital mobility," capital mobility has been and will continue to be sacrificed, with monetary policy gaining prominence.

5. Hong Kong’s Future: A historic turning point

1. Advantages

• HK has an international, advanced infrastructure, including efficient social system, English widely used as an official language, a culture of efficiency and pragmatism, as well as robust financial and international trade system.
• HK remains China’s gateway to access global market and foreign capital, which can be hardly replaced by any other city.

2. Positioning

• Asia’s financial center and one of the world’s financial hub,
• Offshore RMB trading and financing center,
• A core hub of circulation for RMB-denominated assets.

3. Opportunities

• Realignment under the current geopolitical dynamics and consequently reshaping competition pattern in financial and industrial sectors.
• Long-term RMB appreciation expectation.
• A historic AI-driven developing opportunity.

4. Challenges

• Monetary/financial vulnerabilities as a result of HK Dollar’s pegging to US dollar in a long period.
• Transforming to a new developing pattern as the imbalanced economic structure will not be sustainable.
• Ideological confrontation and conflicting as the HK and Mainland continue to deepen the economic integration.

6. AI and its Applications: A global imperative especially for China

1. Breakthroughs in technological accumulation unlock new possibilities.

2. Vertical AI applications will reshape industries.

7. 2025 for Visionary: Forge Ahead, and Embrace Opportunities

1. Based in Hong Kong, to connect globally

• Expand our touches in Nordic, Southeast Asian, and Middle Eastern markets.

2. All-in Al

• Leveraging the evolution of AI-driven infrastructure, including large language models (LLMs), verticalized LLM solutions are poised to proliferate across industries within 1-2 years. Visionary will prioritize innovations and strategic investments in chemical commodity trading and price prediction, and data-centric technologies.

3. Capital Market in Hong Kong and China

• From 2025 onward, Hong Kong and mainland China’s capital markets are poised for transformative growth.
• This will be driven by asset securitization in a broad sense, such as IPOs and all kinds of listing activities on stock exchanges, listing of infrastructure-related REITs, and issuing asset-backed securities in data asset and other type of virtual assets
• Our strategy targets data-centric innovators and infrastructure builders to catalyze next-generation economic productivity.