2026 Outlook: Finding the Wealth Code at the Inflection Point | Macro Musings

峰瑞资本·March 5, 2026

The "Macro Musings" column is now live.

"Macro Chat" is one of the most popular series on the High Energy podcast. With your company, this series has quietly surpassed 100 episodes.

Over the past months, we've often seen comments like this: "The information density in this episode is overwhelming — is there a transcript we can revisit and digest slowly?"

To honor this hardcore enthusiasm for learning, this year we plan to distill select high-density conversations from the podcast into a new "Macro Chat Column." Each piece will follow a simple structure: a clear conclusion, a plain explanation of the underlying logic, and a concrete case study. Of course, condensing spoken conversation into text inevitably sacrifices some of the vivid, spontaneous details from the original recordings. For the full experience, we invite you to search for "高能量" on Xiaoyuzhou or Apple Podcasts.

But as Jared Diamond, author of Guns, Germs, and Steel, observed: under algorithmic curation, people increasingly see only what they already agree with. Existing views get reinforced; dissenting voices are instinctively rejected. In macro forecasting, there is no absolute correctness — because change is constant. We simply hope to share one lens for observation. Perspectives from all angles are welcome. Together, we keep moving forward in an ever-changing world.

(Note: All content in this article and column is intended solely as discussion of business logic and macro trends. Nothing herein constitutes investment advice.)

Over the past month, Feng spent more than four hours recording three podcast episodes with Xiang (business writer and host of High Energy), delivering a detailed year-ahead outlook. "Feng wrote thousands of words of notes before we even hit record."

The discussion covered the restructuring of macroeconomic foundations, specific incremental opportunities in capital markets, overseas expansion, and frontier technology — combining objective facts with logical deduction to arrive at some subjective projections. Here we extract and organize the most rigorous logic, hoping to find relatively certain answers in an uncertain world.

Reader Engagement

What are your outlooks for 2026? Share your thoughts in the comments. By 17:00 on March 10, 2026, the top 5 most-liked comments will each receive a book recommended by Feng.

/ 01 /

The Movement of Money

Conjecture 1: Global capital is beginning a "flight to safety and valuation rotation," creating a window for foreign capital to return to Chinese core assets.

The US itself is starting to risk off — meaning capital is rotating from high-risk to low-risk assets, or from high-valuation to low-valuation assets.

1. Overseas capital is already showing clear "risk aversion" signals.

Over the past two years, tens of trillions in global liquidity has been extremely concentrated in US tech assets at stretched valuations. But as the US enters a rate-cutting cycle, capital is displaying clear signs of rotation and safety-seeking. On one hand, despite blowout earnings from tech giants like Google, top AI and tech stocks have shown relative fatigue. On the other hand, an extremely traditional low-risk asset like Walmart saw its market cap historically break $1 trillion in early February. Though it has since pulled back, the symbolism remains powerful. These two phenomena mark the beginning of a massive global rotation from "high-risk/high-valuation" toward "low-risk/low-valuation."

2. The high margin of safety in Chinese assets helps capture spillover capital.

For global capital to increase China allocation, the core consideration is whether "the floor of US-China competition and rivalry is controllable." According to White House sources, Trump may visit China around April this year. If this further dispels foreign investors' greatest geopolitical uncertainty, international capital will likely reallocate substantial funds — giving core assets in Hong Kong and A-shares, trading at valuation discounts, a chance to absorb the inflows.

Conjecture 2: China's policy theme is shifting to "reform through opening," with financial opening as the top priority. To support this, Hainan may become a special zone for financial pilot programs.

National competition is like a cake, and the tastiest cream on top is finance.

Schematic of national competition model. Image source: AI-generated.

1. Finance is the main shortfall in US-China competition.

In the various dimensions of US-China great power competition — manufacturing, economic scale, military — finance remains the area where the US holds absolute dominance. If we are to build a safer, more independent RMB system, financial opening is unavoidable.

2. Hainan may become the new frontier of financial opening.

Just as Shenzhen, 40 years ago, leveraged its special trade zone status to pilot the nation's earliest real estate land transfer system, today if we wish to pilot high-risk "capital account opening" and financial services liberalization, the market's first instinct might be Shanghai as the mainland's financial center. But by comparison, Hainan as an island possesses natural "risk isolation" advantages. Combined with already-implemented preferential policies on import duties, individual income tax, and corporate income tax, Hainan is highly likely to become China's testing ground for deep financial opening.

Conjecture 3: The RMB will maintain "moderate appreciation expectations."

Sharp RMB appreciation may not necessarily occur, but appreciation expectations must be maintained consistently — and kept moderate.

1. Maintaining RMB appreciation expectations is essential to attracting foreign capital.

As mentioned in Conjecture 2 on "financial opening," China must push capital account opening to reduce dependence on the dollar system and build an independent RMB loop. Maintaining appropriate RMB appreciation expectations is the core prerequisite — this is what gives global capital genuine willingness to hold and retain RMB-denominated assets.

2. Increasing the RMB's global purchasing power helps build a more favorable global trade and economic network.

China has accumulated trade surpluses of roughly $1 trillion, but in the current great power rivalry context, "selling without buying" easily leads to passivity and lacks deep interest binding with trade partners. Therefore, China needs to expand global purchasing power, and moderate RMB appreciation is highly helpful in this regard. When we actively become a "buyer," converting massive export earnings into global procurement scale (for example, diversifying resource purchases across multiple countries), we can turn "import demand" into a core bargaining chip in multilateral trade negotiations.

3. "Moderate" appreciation protects the export base while preventing hot money arbitrage.

While currency appreciation has many benefits, it faces two strict real-world constraints. First, the magnitude of appreciation cannot significantly impact our foreign trade export base. Second, if appreciation is too rapid or one-off, it causes appreciation expectations to be instantly exhausted — this not only weakens foreign capital's willingness to continue holding, but also triggers fast-in-fast-out arbitrage by international hot money, causing financial market turmoil.

Conjecture 4: (A highly subjective personal guess) The Hong Kong dollar may delink from the US dollar alone and gradually peg to a basket of currencies?

This is a rather special window. It happens to coincide with three parallel developments: RMB appreciation, RMB internationalization efforts, and China's push for financial opening.

1. An ideal window.

Exchange rate mechanism reform carries extremely high risk, but 2026 may offer an ideal hedging environment. As the US enters a rate-cutting cycle bringing dollar depreciation expectations, while the RMB maintains moderate appreciation expectations. If the peg mechanism is adjusted at this "intersection" of dollar weakness and RMB strength, the RMB appreciation dividend can precisely underpin the Hong Kong dollar's foundation — thereby defusing market panic and violent volatility that "delinking from the dollar alone" might otherwise trigger.

2. Aligning with underlying asset characteristics and the national opening trajectory.

Hong Kong serves as an overseas financing window and financial center for RMB assets; the vast majority of underlying assets traded there are fundamentally RMB-denominated. With the mainland's capital account not yet fully open, moderately introducing a basket currency mechanism (with a substantial RMB weighting) can not only more accurately reflect the value of Hong Kong financial markets' underlying assets, but also better serve the national agenda of advancing financial opening.

/ 02 /

Fundamental Repair

Conjecture 5: 2026 may become a "historic inflection point" for China escaping deflation.

As the saying goes, it's hard to change wheels at high speed. So if you want reform, it's best done during mid-to-low speed growth — painful as the process may be.

1. Reviewing China's two previous three-year deflation episodes reveals that objective conditions for escaping deflation now exist.

Both of China's deflationary episodes were created by the dual pressure of "severe external turbulence" and "forced internal restructuring."

First episode (1998–2001): Externally, the Asian financial crisis; internally, the pain of tens of millions of state-owned enterprise workers being laid off and restructured, and banks stripping out bad debt. Ultimately, China broke through by joining the WTO with a posture of "bearing hardship," and internally launching "housing commodification."

A TV series Feng recently enjoyed: Small Town, Big Events, a period entrepreneurship drama based on Longgang, Wenzhou. It portrays the economic transformation of coastal cities in the 1990s with both charm and poignancy. The period of "drastically reduced orders and extreme operating difficulty" depicted in the show was the real predicament facing Chinese manufacturing from 1998–1999. Image source: Small Town, Big Events still.

Second episode (2012–2016): Externally, the drag of the European debt crisis and the Obama administration's "Pivot to Asia" strategic containment; internally, digesting severe overcapacity from the "four trillion" stimulus, with manufacturing capacity utilization falling below warning lines. China ultimately escaped through internal "shantytown renovation" and external "Belt and Road" and capacity export.

Now (2023–2026): The rhyme of history is identical. Externally, supply chain restructuring and encirclement under Western "de-risking"; internally, the acute pain of actively shedding dependence on real estate and old infrastructure. Historical experience shows this macro-level "wheel-changing" typically requires about three years. By early 2026, as internal restructuring perhaps passes its most difficult phase, combined with stabilizing external relations (such as expected visits by more foreign leaders this year), the objective conditions fully exist to replicate the breakthrough pattern of the previous two episodes.

2. The old-to-new kinetic energy transition is already more than halfway complete.

After three years of pressure, China has largely digested the pain of reducing real estate dependence, while "new quality productive forces" representing the future have successfully taken the baton. By the numbers: China's chip exports exceeded 1.5 trillion RMB last year; auto export scale has become globally number one, with new energy vehicles comprising nearly one-third; and in global innovative drug pipeline licensing, China secured massive contracts worth $135.6 billion. The increment from new kinetic energy is gradually offsetting the decay of old capacity — precisely the sign that "wheel-changing" is progressively yielding results.

Conjecture 6: Real estate in core cities is likely to stabilize.

Without household registration and related social security systems, permanent residents' willingness to buy homes and settle locally is affected. Lowering barriers to household registration and allowing registration addresses the demand side of real estate supply and demand over the medium to long term.

1. More demand.

Past real estate regulation focused mainly on the financial side (such as interest rate cuts), but today the biggest variable comes from the demand side. The "New Mechanism for Integrated Urban-Rural Development" explicitly proposes to formally resolve household registration in cities with populations below 5 million. This means the state is converting massive urban permanent populations (such as new urban residents) into genuine medium-to-long-term home purchase and rental demand by providing household registration and social security.

2. Micro data in core cities already reflects this demand.

Take Shanghai: in 2025, the proportion of "new Shanghainese" among new home purchasers rose significantly, while traditional native Shanghainese purchase share dropped from over 40% to the 30% range. Similar patterns occurred in Hangzhou. In 2025 Hangzhou second-hand home transactions, out-of-town registered clients (new Hangzhounese) accounted for 82.7% of transactions. The loosening of home purchase eligibility is gradually becoming the genuine foundation supporting transaction volume stabilization (preceding price stabilization) in core cities.

Conjecture 7: Economic momentum shifts from "investment and production-driven" to "services and consumption-driven."

Local governments' money-making "stool" moves from the factory to the mall; consumption returns from the outer ripples to the core of growth.

1. The "ripple" of wealth effects will eventually reach the real economy.

In Conjecture 1 we discussed how massive international capital may reallocate to China. If this materializes, capital market rallies typically begin with liquidity, then push valuations higher to generate wealth effects. These effects ripple from virtual to real: first repairing household balance sheets, then radiating to consumption, manufacturing, and other foundational industries, ultimately forming substantive earnings support and a positive feedback loop.

2. The return of "prize invoice" programs.

Late last year, the Ministry of Finance and State Taxation Administration relaunched "prize invoice" pilots in 50 cities nationwide. This may be technical and awareness groundwork to cultivate end consumers' habit of requesting invoices. Once the shift to consumption-side taxation occurs, local government fiscal incentives will completely transform from "build factories, collect taxes" to "do everything possible to boost local consumption." If consumption-side taxation is formally implemented in 2026, local governments' money-making "stool" will fully shift from "investment attraction and factory-building" to "consumption boosting."

3. From "investing in things" to "investing in people," unlocking the purchasing power of 400 million new middle-class consumers.

2026 is a critical starting year for the 15th Five-Year Plan. The state will more firmly redirect funds from infrastructure (investing in things) toward social security and public services (investing in people). By providing equalized education, healthcare, and elderly care services to permanent residents, the state is eliminating new urban residents' (especially the 300+ million non-registered permanent population) worries. This "sense of security" will directly convert into consumption momentum.

Conjecture 8: Consumer brands will accelerate "direct-to-consumer" transformation.

From distribution to direct sales, direct sales to e-commerce, e-commerce to self-operation.

1. Premium brands moving "direct-to-consumer" is an inevitable law for crossing cycles.

The deterministic path for consumer brands to grow strong is "distribution to direct sales, direct sales to e-commerce, e-commerce to self-operation" — proven by the transformation of international luxury brands around 2010. At that time, major brands like Burberry and Montagut reclaimed distribution rights in mainland China, shifting from Hong Kong agency to full direct operation. Moutai did the same, launching its self-operated e-commerce platform "i Moutai" last year to directly reach end consumers — not only eliminating middleman margins, but more importantly directly establishing brand mindshare. Coincidentally, in the current period of overall consumption adjustment, traditional distributors' willingness to stockpile has declined, actually facilitating these top brands' reclamation of channel control and completion of direct-to-consumer transformation.

2. Breaking regional barriers.

In the past, high-tax goods like baijiu struggled to achieve true national circulation, largely because they were taxed at production locations and served as important revenue sources for local governments. To ensure these major taxpayers didn't leak away, local protection and market segmentation were common. If the underlying logic of local government fiscal revenue sources transforms, with taxation shifting from "origin principle" to "destination principle," this may be the core prerequisite for building a "unified national market."

Seeking New Incremental Growth

Conjecture 9: Chinese enterprise globalization will enter a "open and aboveboard" new phase, even potentially building factories directly in the US.

Riding this historical beta, you no longer need to disguise yourself — just go forthrightly.

1. A historic "beta" for globalizing enterprises.

Despite the precedent of Fuyao Glass, in recent years constrained by trade friction and geopolitics — such as Western "de-risking" strategies — Chinese companies going global often had to detour through Southeast Asia or even deliberately obscure their Chinese capital background. But from recent US-China tariff reciprocity negotiations to the密集 visits of multiple countries' leaders to China, China is winning favorable international standing and bargaining chips through a distinctly different, more open posture of international cooperation. This is a macro "beta" factor brought by national strength's leap.

2. The US's core political demand is shifting from "technology blockade" to "capacity introduction."

Understanding the counterintuitive inference of allowing Chinese capital to build US factories hinges on grasping the political logic of the new US administration. From research into Trump's "New Right" strategy (as projected in the book America's Dilemma), his administration's highest governing goal is pleasing the core base — such as Rust Belt manufacturing blue-collar workers. And to address the urgent needs of US automotive industry transformation and domestic manufacturing job shortfalls, the US desperately needs to introduce China's extremely efficient new energy vehicle supply chain capabilities. One telling indicator: the US ultimately did not pass a blanket ban on DJI, at least not targeting specific manufacturing enterprises. This reflects a subtle shift in US strategy toward China — tending to "pull into the homeland" supply chains that were originally produced in China but that the US must possess.

Conjecture 10: The battleground for China's AI second half will become "data."

If you believe AI is productivity, and that AI will eventually be everywhere, then the production factor AI development needs most is data.

1. The core bottleneck for AI commercialization has shifted to data elements.

After two waves of hype (from the first wave of large models and infrastructure, to the second wave of general agents and embodied intelligence), AI technology is entering its "third wave" application period — penetrating thousands of industries and earning real money. At this stage, computing power and foundation models will gradually evolve into standard "infrastructure clouds," while the true competitive moat becomes vertical industry data. What determines AI application success or failure: first, the breadth of industry digitalization and data quality; second, how data — as a production factor that can be reused infinitely — can flow compliantly, be securely desensitized, and be reasonably priced.

2. Diverging US-China strategies in the data domain.

On data governance systems, the situations and strategies faced by the US and China have clearly diverged. In the US, obtaining highly privacy-sensitive industry core data (such as medical clinical data) is extremely difficult, because this data is highly fragmented and acquisition costs are prohibitive (potentially hundreds of dollars per data point). By comparison, China has moved first to establish the National Data Bureau, and in places like Shanghai has begun piloting efforts to extract government and public-level public domain data (such as hospital clinical data) for desensitization, cleaning, and structuring.

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