Li Xunlei: Tech remains structural bull market focus, AI bubble risk tied to Fed rate path
At the 2026 Tsinghua Wudaoqou Chief Economist Forum, Zhongtai International Chief Economist Li Xunlei stated that technology, especially AI, remains the main driver of China's structural bull market. He warned that the AI bubble could burst if the Federal Reserve raises rates more than twice this year, AI firms face cash flow problems, or AI-driven unemployment rises. Li advocated for fiscal expansion and more long-term capital in Chinese markets.
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Economist Li Xunlei: Tech remains structural market theme, three signals to watch for AI bubble burst
In an interview at the 2026 Tsinghua PBC Chief Economist Forum, Zhongtai International Chief Economist Li Xunlei stated that technology remains the main structural theme in China's A-share market, with AI and STAR Market ETFs offering allocation value. He warned that stock differentiation within the sector will intensify. Li identified three key indicators to monitor for a potential AI bubble burst: inflation levels and the pace of Fed rate hikes, AI companies' cash flow, and labor market changes. He cautioned against judging a bubble burst on a single rate hike, emphasizing the need to track the resonance of all three signals. Li expects Fed rate hikes to exceed current market expectations of two this year, citing persistent inflation. Higher global risk-free rates would pressure high-valuation growth stocks and risk deflating the AI bubble. Domestically, Li sees a capital 'siphoning effect' toward tech that requires macro policy intervention to rebalance. He favors index-based investment in AI and STAR Market ETFs to mitigate individual stock risks, noting that fundamentals are diverging among tech firms, with some still struggling with commercialization and cash flow.
Read sourceLi Xunlei: Tech Sector Remains Main Line of Structural Bull Market; Calls for More Long-Term Capital
In an interview at the 2026 Tsinghua PBCSF Chief Economists Forum, Li Xunlei, Chief Economist at Zhongtai International, stated that the technology sector remains the main theme of the structural bull market in A-shares. He argued that the AI bubble could burst if Fed rate hikes exceed expectations (he estimates more than two hikes this year), if AI companies face cash flow problems, or if AI-driven unemployment rises. Li expressed optimism for AI and STAR Market ETFs but warned of divergence among individual stocks. He noted that medium- and long-term funds in China's capital markets are still insufficient, suggesting bank wealth management subsidiaries issue principal-guaranteed-like products to attract household deposits. On fiscal policy, Li sees significant room for central government expansion, as central leverage is below 30%, and advocated for earlier deployment of incremental policies next year. He forecasts full-year GDP growth of around 4.6% this year, with Q4 growth clearly exceeding Q3, and expects export growth to slow but remain positive next year.
Li Xunlei: AI Sector Remains Bull Market Core, Warns of Bubble Risk from Rate Hikes
In a September 19 interview at the Tsinghua PBCSF Chief Economists Forum, Li Xunlei, Chief Economist of Zhongtai International, stated that the structural bull market in A-shares will continue to be driven by the technology sector, particularly AI. He remains optimistic about AI and STAR Market ETFs but expects individual stock divergence. Li warned that the AI bubble could burst if the Federal Reserve raises rates more than twice this year, as he predicts, or if AI company cash flows deteriorate or AI-driven unemployment rises. He noted that reversing the capital siphoning effect toward tech requires stronger macro policy support, such as further fiscal expansion. Li assessed that China's central government still has room for fiscal expansion with a leverage ratio below 30%, and recommended expanding trade-in subsidy categories to include lower-priced items to boost consumption among middle- and low-income groups. He estimated full-year 2026 economic growth around 4.6% and a 2027 target of 4.5%-5%.
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Li Xunlei: Technology sector remains main driver; more long-term capital needed in markets
In an interview at the 2026 Tsinghua PBCSF Chief Economists Forum, Li Xunlei, Chief Economist at Zhongtai International, stated that the technology sector, particularly AI, remains the main driver of structural market trends. He expressed optimism about AI and STAR Market ETFs but warned of potential divergence among individual stocks. Li noted that the Federal Reserve may raise interest rates more than twice this year, which could trigger an AI bubble burst if expectations are exceeded. He argued that macro policy measures must be strengthened to change the capital siphoning effect of tech on other sectors. Li assessed that medium- and long-term capital in Chinese markets is still insufficient, suggesting bank wealth management subsidiaries launch long-term products backed by bank capital. He also advocated for central fiscal expansion, noting China's central government leverage ratio is below 30%, and recommended optimizing trade-in policies to include lower-priced items to boost consumption among middle- and low-income groups.
Read sourceLi Xunlei: Tech remains structural bull market focus, AI bubble risk tied to Fed rate path
In an interview at the 2026 Tsinghua Wudaokou Chief Economist Forum, Zhongtai International Chief Economist Li Xunlei shared his outlook on China's capital markets, technology sector, and AI. He maintained that the structural bull market's main line remains in technology, and he is optimistic about AI and STAR Market-related ETFs, though he expects individual stock divergence. Li reiterated three signals for an AI bubble burst: inflation/Fed rate hikes, AI firms' cash flow problems, and AI-driven unemployment. He noted the recent Fed rate hike is just one factor and does not alone signal a bubble burst. Li argued that changing the tech sector's capital absorption effect requires macro policy support, such as fiscal expansion. He forecast China's 2024 GDP growth at around 4.6%, with the fourth quarter outperforming the third. For 2025, he expects a 4.5%-5% target, requiring stronger fiscal and monetary policy, including more aggressive rate cuts. He also suggested optimizing trade-in subsidy programs to benefit lower-income groups and expanding central government leverage to ease local debt burdens.
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