Excess Returns The Real Estate Bust Was the Plan | Louis-Vincent Gave on China's Brute Force Growth Strategy
20 snips
Nov 26, 2025 
Louis-Vincent Gave, founder of Gavekal Research and a macroeconomic investor, sheds light on China’s impressive economic transformation. He discusses why Western views misjudge China’s growth model and how the country has deftly responded to US pressures like the semiconductor embargo. Gave explores China's rapid ascent in engineering and EV dominance, contrasts its open-source AI approach with the US, and argues that fears surrounding Taiwan are overblown. He also predicts a multi-year bull market for China, highlighting the undervalued renminbi as a key investment consideration.
AI Snips
Chapters
Transcript
Episode notes
Semiconductor Embargo Triggered Industrial Pivot
- China redirected massive capital into industry after the US semiconductor embargo, forcing rapid industrial upgrading.
- That policy shift created a global deflationary shock while boosting China's manufacturing capabilities.
Banks Were Told To Fund Industry
- From 2018 China reallocated bank lending from real estate to industry to secure supply chains.
- This created a balance-sheet recession domestically while accelerating China up the value chain.
Surge In STEM Graduates Fueled Upgrading
- China massively expanded its skilled workforce, from 350k graduates to ~12 million annually.
- Roughly half are STEM graduates, supercharging R&D and manufacturing capabilities.