Stepping Into 2023 | Ten Investors' Insights into Opportunities and Challenges for Chinese

Technology, Consumer Staples, Financials Author: Lina Peng Feb 14, 2023 12:23 PM (GMT+8)

Many years from now, this generation will have aged and retired. We may imagine an elderly retiree sitting on a wheelchair pushed by the ‘bicentennial man’ or similar robot helper, admiring a holographic projection of the California Sunset, and sipping from a cup of biochemical coffee which prevents aging.

Chinese New Year

In retrospect, the year 2022 might turn out to have been a special one, when regional conflicts sent Europe to a dark place, leaving it shivering in a freezing snowstorm. The growth rate of GDP and population in China descended to a  ‘developed’ level, and one in five young citizens faced unemployment. The China Concept Stocks and the Chinese stock markets drooped and investors wept, almost throughout the year.

Of course there were brighter sides to the story. DeepMind revolutionized the bioengineering community with its AlphaFold and ChatGPT3 won the favor of the world. China became the second largest automobile export country and the sales volume of Chinese NEVs topped the world for eight years in a row. The bargain e-commerce platform Pinduoduo landed in the U.S. with a new brand TEMU, and Alibaba Cloud lighted Saudi Arabia up with a lively shade of orange. Many people were infected by the coronavirus, and some of them recovered. All in all, the epidemic showed signs of fading away from the mainstream of social discourse.

In 2022, we witnessed some of the giants falling down, at the same time not a few late-comers burgeoning. The entrepreneurs and their employees were granted a precious period of slower and quieter time. We knew at the time that everything would go back to normal at the end of it, yet something also changed during those days.

For Chinese people, January 15 in the lunar calendar (which is Lantern Festival) is considered the last day of the previous year. After that day, the new year truly begins. To draw a satisfying full stop to the year 2022, EqualOcean conducted interviews with ten investors. Through their deep understanding of technology, healthcare, advanced manufacturing, business services, consumption and macroeconomics, we were able to get penetrating insights into the gains and losses of Chinese enterprises going abroad in 2022, and a meaningful glimpse of the opportunities and challenges in 2023.

2022 is considered the base year of the new era of globalization. There are new patterns that gestated in the changing world of the political and economic environment. The conglomerates in China waded further out into the global value chain, and the younger generation of entrepreneurs began to embrace the global community from day one. Mountains and seas weren’t able to hinder the flow of business at the ancient days. Humanity only became more united before a shared future. Connection and sharing, more than ever, look like the ultimate solutions to our problems.

Ray Hu: Chinese software companies will light up the global stage

「As Founder and Managing Partner of Blue Lake Capital (Chinese: 蓝湖资本), Ray Hu focuses on investment in enterprise software and services, intelligent manufacturing, and cutting-edge science and technology. Ray Hu has led the investment in Momenta, Yiheda (301029.SZ, Chinese: 怡合达), Meicai (Chinese: 美菜), Moka, ZHENYUN Technology (Chinese: 甄云科技), and Huilianyi (Chinese: 汇联易).」

Companies which had explored the global market before developed relatively smoothly in 2022. In the field of SaaS, some companies seized the digital transformation trend in Japan and accelerated expansion into the Japanese market during the pandemic based on more competitive products and services than their U.S. peers. As for manufacturing, after a few years of trial and error, the overseas business of electric vehicle sensors, medium-end and high-end power tools, and some other fields also achieved considerable growth in 2022. Some of them even realized a 70% to 100% increase.

Due to the pandemic emergencies, companies that had planned to expand overseas markets were not able to make expected progress. When the quarantine was removed, they started to go abroad to study the local market and received positive feedback. These companies, especially the software companies, plan to speed up their explorations into global markets in 2023. Most of the Chinese software companies (enterprise services) do not have a strong basis overseas, but with top tier products and capabilities, and accurate strategies, there is a good chance for them to achieve rapid growth. The key point is to win over local core clients in the overseas markets at a good price.

The engineering talent still counts as a strong edge for China, not only in competitive development cost, but also in market size, market diversity and fierce competition. Software products which have survived the Chinese business environment have a great chance in winning global competition with adequate local adaptation of user interface and compliance. Meanwhile, Chinese software companies generally respond faster to client needs than the global giants. For the same client demand, it may take Chinese companies one to two months to develop the program and upgrade the software, while the global giants may need more than six months. The difference in client experience is obvious.

In 2023, the Chinese stock markets are likely to recover in terms of investors' sentiment and the amount of IPOs. This recovery will also be transmitted to the primary market and lead to the bouncing-back of equity investment. Recently, there have been frequent visits among nation leaders. The economic growth target in 2023 will also be set higher than 2022. Therefore, we believe policies which encourage cross-border economic and trade cooperation will be introduced in 2023.

Will the U.S. economy face a ‘hard landing’ in 2023, leading to  the decrease of overseas demand and orders? It is possible. But based on the situation since the end of the previous year, the companies in our portfolio still face promising sales prospects. It's very likely that industries including new energy, intelligent automobiles and semiconductors will lengthen their popularity and act as the driving force of the industry chain development.

Feng Li: Adjust the expectations, restore the confidence, strive for a positive economic cycle

「As Founding Partner of FreeS Fund (Chinese: 峰瑞资本), Feng Li focuses on technology and consumption investment. The projects led by Feng Li include Saturnbird(Chinese:三顿半), QingTao Energy(Chinese:清陶能源), CreditEase (Chinese: 宜信), LAIX (Chinese: 流利说), 360 DigiTech (Chinese: 360数科), Bilibili, Three Squirrels (Chinese: 三只松鼠), Unity, Coinbase, and Bairong (Chinese: 百融云创).」

The investment sector witnessed a depressed market in 2022, which influenced the entrepreneurial atmosphere. The number of entrepreneurs, especially those who had planned to return to China from foreign countries, also decreased. However, as I've consistently argued, a depressed market presents rare opportunities for decision making and investment. Based on final results, compared with 2020 and 2021, our investment amount in 2022 maintained the level of 2020 and 2021. Given that the result was achieved with lots of promotion from management, 2022 could be considered as a tough year for the investment sector.

During the past year, we encountered various challenges in almost every month. The main problem facing the Chinese economy currently is the lack of confidence and stable expectations, which are the result of the epidemic, weakened demand, the unbalanced supply chain, and other factors. We've seen similar situations in history. With the policies guiding direction and steering, we successfully overcame the difficulties.

At the end of December 2022, expanding domestic demand and constructing the modern industrial system were proposed as urgent matters at the Central Economic Working Conference. The importance of developing both the public economic sector and the non-public sector was reiterated. To some extent, this has sent some signals about the national leadership's attitude which affects our expectations.

Spring Festival is one of the most important traditional festivals in China when families get together. Long-lost reunions would help to release negative sentiments. Spring Festival arrived earlier this year in solar calendar. After that, we still have the whole February and March to adjust to work state. The National People's Congress and the Chinese Political Consultative Conference (NPC&CPPCC, Chinese:两会) will be held in March. It could be deduced from the tone of the aforementioned Central Economic Working Conference that there will be more economic policies released in 2023, which generates a positive cycle: with spirits lifted up from family reunions, we will come back to the workplace confidently. Based on the economic policies released during NPC&CPPCC, we stride into the second quarter.

If the cycle successfully runs itself, a high level of growth in Q2 2023 could be projected, considering that the number was small in Q2 2022. This is a bright picture we strive for because it will further strengthen the confidence of the public towards the economic recovery and that confidence will probably last till H2 2023.

Jianwei Li: The year 2023 will underline recovery and growth for Chinese entrepreneurs and investors

「As Founding and Managing Partner of ZHENCHENG CAPITAL (Chinese: 真成投资), Jianwei Li focuses on investment in disruptive technologies, especially advanced manufacturing, cloud computing, and artificial intelligence. The investments he led include Segway-Ninebot (Chinese: 九号公司, SH: 689009), Tiger Brokers (Chinese: 老虎证券, NASDAQ: TIGR), Huami (Chinese:华米科技, NYSE: HMI), EHang (Chinese: 亿航, NASDAQ: EH), Dedao (Chinese: 罗辑思维/得到app), Yunzhou Technology (Chinese: 云洲智能), intellif (Chinese: 云天励飞), TheOne AI music education (Chinese: 小叶子音乐科技), Deep Blue Aerospace (Chinese: 深蓝航天), Space Transportation (Chinese: 凌空天行), Chamlion Laser Technology (Chinese: 铖联科技), Shuyun (Chinese: 数云), and Chaitin Tech (Chinese: 长亭科技).」

Under the influence of geopolitics and the epidemic, the capital market was flat for most of the 2022. Both publicly-listed companies and startups went through great pressure. At the end of 2022, the capital market saw a prompt rebounce as epidemic control policies were adjusted and the external environment marginally improved, which will be delivered to the primary market within two to three quarters. As economic development was reemphasized, and private enterprises saw a series of support policies unveiled, the year 2023 will underline recovery and growth for Chinese entrepreneurs and investors.

Looking into advanced manufacturing, digitization, and AI for 2023, we hold an optimistic perspective.

First of all, policies will act as powerful drivers: advanced manufacturing has been stressed for the past few years as the solution to critical issues. Recently, policies to encourage the robot industry and central documents which announce data to be crucial production factors have been creating an amicable regulatory environment for startups in related fields.

Secondly, the competition environment has been improved: during the past two years, the less competitive companies gradually withdrew from the market, leaving more market shares for companies with steadier products and operations and healthier unit economic models.

Thirdly, innovation in technology and business model of outstanding companies: for example, by shifting from sales mode to networking operation mode, the dentistry metal 3D printer producer Chamlion Laser Technology in ZHENCHENG portfolio has significantly improved its business sustainability and unit economic model and has initiated global expansion. Based on AI-driven innovation, TheOne AI music education has improved users' experience in learning and practicing pianos to a great extent and has grown to be a market leader.

Nisa Leung: The Chinese healthcare industry, once 'copycat', is marching towards an innovation-driven prospect

「As Managing Partner of Qiming Venture Partners (Chinese: 启明创投), Nisa Leung leads investments in health care. Her cases include Gan & Lee (Chinese: 甘李药业), Zai Lab (Chinese: 再鼎医药), CanSinoBIO (Chinese: 康希诺生物), New Horizon Health (Chinese: 诺辉健康), Venus Medtech (Chinese: 启明医疗), and others.」

In 2022, investment and fundraising in the healthcare sector went through a downturn due to factors such as the sluggish capital market, centralized procurement, and PD-1 medical insurance negotiation reaching an unexpected price reduction. With company values looking less effervescent, the industry began to reflect and attend to itself. We believe that the PE/VC sector in China will move further towards specialization, a subtler division of labor and earlier rounds with hard technology as the driving force.

In the healthcare sector, more and more Chinese innovation companies have fostered world first-class R&D abilities. Chinese pharmaceutical innovation has gradually become a new power and driving force for global biomedical innovation. We have noticed some new trends. In recent years, overseas clinical and licensing of Chinese innovation drugs ('first-in-class') have grown rapidly. Recently, four companies in the Qiming portfolio received similar term sheets or partnership agreements.

For example, Insilico (Chinese: 英矽智能), an AI-driven clinical drug discovery company that we invested in a few years ago, reached a long-term cooperation with Sanofi (Chinese: 赛诺菲) on drug R&D for multiple targets. Sanofi will pay Insilico up to USD 21.5 million advance payment and target nomination fees. The potential total value is up to USD 1.2 billion, which will be the largest deal in global markets and set the record for Chinese AI pharmaceuticals cooperation agreement sum. Chinese AI drug R&D companies are on the rise.

More and more China-rooted innovations are emerging in new drug R&D, medical diagnosis, digital medicine, medical equipment, and medical services with the world's leading and first-in-class levels. Based on the increasingly integrated R&D and innovation ecosystem, China is becoming an important source to global innovation with the guidance and support of national policies, the returning of leading scientific talent, the progress of basic research, rich clinical research accumulation, lower clinical trial costs, faster product iterations, and the improvement of preclinical and clinical CRO bio-manufacturing infrastructure. The Chinese healthcare sector, once full of 'copycats',  is marching towards an innovation-driven future.

The innovation-driven transformation is a necessary process for Chinese economy to achieve sustainable growth and high level development for its new stage. Healthcare is becoming more important in supporting and leading economic development. With the golden age of the Chinese healthcare industry approaching, Chinese entrepreneurs are facing phenomenal opportunities. Under current market environment, CEOs need to keep strengthening organization management and increasing investment in R&D to enhance the internal driving force. Meanwhile, it's also necessary to cultivate a global perspective and mindset and to strive for a globally competitive and influential cause through global exploration.

Surea Liu: Globalization is a spirally upcoming process. Global enterprises of the new era need more precise strategic decisions and positioning.

「As the partner at Fosun RZ Capital as well as Fosun's Global Partner, Surea Liu focuses on investment in consumer goods & services, retail, and e-commerce. She led the investments in Secoo (NASDAQ: Seco, Chinese:寺库), Zhangmen (NASDAQ: ZME, Chinese:掌门教育), By-Health (SZ:300146, Chinese:汤臣倍健), Dianping (HK:03690, Chinese:大众点评), Hunliji (Chinese:婚礼纪), HiTomorror (Chinese:大希地), Urbanic, Teambtion, IntraMirror/Senser (Chinese:识季), etc.

In its new 'going-global' sectors, Fosun RZ Capital's investment layout centers on the globalization of merchandises and the consumerization of business services. Relying on Fosun's global industry resources and operation experience, we support outstanding Chinese companies to go global and teams with internationally local team building abilities to expand beyond domains.

For companies with global operations, three abilities come at first. First of all, global mindset and teams who can run locally overseas. Secondly, ability to build cross-border organizations, which is a tough challenge for both overseas companies coming to China and Chinese companies going global. Many companies with a strongly growing business encounter obstacles in international management. A management team with experience in large-scale (500-1000 employees) international organization building would be exceptionally helpful.

Thirdly, the company's thinking and choice of business models needs to be built on the industrialization, urbanization and informatization process of various countries. It's essential to inspect from the bottom whether one's business model has a root in different countries and regions instead of simple replication. Based on our experience over the past five to seven years, these three criteria have stood the test of time. Companies with these three abilities generally achieved outstanding development.

Globalization in 2022 could be summarized via one Chinese poem: “The waves and surges that look like clouds and snow float towards the sky./The partly visible sails head towards distant destinations.” As the reform deepens and we enter into the post-epidemic era, the changing international environment and the policy adjustment of major overseas e-commerce and payment platforms are bringing higher levels of requirement for the new generation of global companies, which requires more precise strategic choice and positioning. Go where and join hands with whom becomes prominent questions. Precise positioning of products and raising one's value in the global value chain outline the only path to success.

Globalization firmly heads towards a bright future no matter how turbulent it is in the process. The global development path is constructed on a horizontal division of labor and a vertical integration of industry chains. Globalization, on a higher level, is driven by market rules restricted and guided by input/output, resource allocation, and scale economy, not other factors. It is an irreversible trend.

Yiran Liu: Global investment will stay a hot topic with China's advanced technology, services, and products gaining global popularity.

「As Partner of Vision Plus Capital (Chinese: 元璟资本), Yiran Liu focuses on cutting-edge science and technology, business services and cross-border sectors. After joining Vision Plus Capital, Yiran Liu led investments in Li Auto (Chinese: 理想汽车), ADVANCE.AI, ZHIKETONG Technology (Chinese: 直客通), AISPEECH (Chinese: 思必驰), Dustess Technology (Chinese: 尘锋科技), North Ocean Photonics (Chinese: 鯤游科技), and others. Previously, Yiran Liu had invested in Xiaomi (Chinese: 小米), Meituan-Dianping (Chinese: 美团点评), DiDi (Chinese: 滴滴), AsiaInfo (Chinese: 亚信), and Mstar (Chinese: 晨星半导体).」

In 2022, Vision Plus Capital participated in and witnessed the booming of Chinese strength in global markets. In the Fintech sector, the relatively high popularizing rate of mobile Internet and the relatively low level of service provision coincided in creating significant opportunities for financial innovation. ADVANCE.AI and Stori in our portfolio have grown to be unicorns in Southeast Asia and Latin America. In terms of logistics, China provided her advanced logistics systems and experience to the world. In Africa, we invested in Speedaf Express (Chinese: 速达非) which successfully expanded business in China-Africa cross-border logistics and local logistics.

As for intelligent products, the combination of the engineering talent pool and the advanced supply chain in China brought great opportunities for domestic intelligent products. In IoT and intelligent electric appliances, Tuya Smart (Chinese: 涂鸦智能), A4x (Chinese: 积加科技), HHO, Yaoyao Technology (Chinese: 曜曜科技), and other companies in our portfolio have explored rapidly in loT and smart home appliance sectors and have made sustainable progress in Europe, the US and Southeast Asia.

Looking into innovation from a global perspective, we believe that global investment will remain a hot topic. Three trends have become more apparent:

1) In the consumption and mobile Internet service sectors, China's 'Time Machine' continues to steer towards emerging markets. The advanced service model and technology accumulation from China will incite more local innovations. There are still wide spaces for consumer services, financial services, and logistics services. The existing unicorns will also keep expanding their business.

2) In Cloud computing, the ‘new generation architecture’ defined by Shopify, Snowflake, and other US companies encounters with industrial needs from China and other emerging markets. Evolutions such as Cloud Native and Cloud Independence will bloom in wider ranges.

3) China will become the new engine for technology-driven smart devices. Based on the advanced supply chain and the rich engineering talent pool, Smart-Tech devices driven by Chinese technology will expand both to the US and emerging markets, including electric automobile, home appliances, and various loT products.

Young Tao: The crossborder e-commerce sector has entered a stock competition stage. The rise of new platforms brings changes to the market.

「As Vice President at 01VC (Chinese: 零一创投), Young Tao focuses on  early-stage investments in enterprise services & international expansion of Chinese startups. He led the investments in XTransfer, Xendit, Hibobi, Mangatoon, STAR & SEA Group (Chinese: 辰海集团), RupiahPlus (Chinese: 印闪科技), TYMO, Jishi Yu Chat (Chinese: 及时语), CartX, Bang Bang robot (Chinese: 邦邦机器人), and others.」

In 2022, globalization received a lot of attention. In addition to crossborder e-commerce and manufacturing exports, more fields such as enterprise service software, robotics, and new consumption started to look into global markets. The once heated cross-border e-commerce sector entered an iteration and upgrading phase, as related companies put major efforts in exploring new regions and new channels and product upgrading.

However, due to the cost raise of overseas online flow and other factors, not a few companies were not able to achieve their growth objectives in 2022. The faster growing fields in the crossborder sector in recent years have mainly been new energy and outdoor exercises. In all, cross-border companies are upgrading themselves in branding and premiumization.

Looking into 2023, major e-commerce platforms such as Amazon in Europe and the US may achieve a slow growth rate of around 10%. The growth of the sector in average will return to a relatively mitigatory phase after the booming during the epidemic. In the crossborder e-commerce sector where growth has speeded down, the focuses of competition will fall into product and multi-channel abilities. More suitably positioned products outweigh mere price advantages. Meanwhile, the rise of TEMU(Chinese: 拼多多)  and TikTok Shop will also breeze some new breaths into the market.

In some sectors such as robotics, Chinese enterprises, with world leading technologies and innovativeness, may achieve faster growth overseas in 2023 on account of the ever-growing demands for human labor substitution and efficiency promotion.

In addition, corporates will put increasing emphasis on global team building, unlike in the past when cross-border businesses ran for many years without local teams overseas.

Overall, globalization is sector with tremendous potentials. 01VC is optimistic about the structural opportunities based on ‘supply chain advantages in China’ going global. Since 2016, 01VC has been investing in globalization-related sectors such as crossborder payment unicorns XTransfer and Xendit. Companies in our portfolio have expanded over Europe, US, Southeast Asia, the Middle East, Latin America, etc.

For the future, we will keep betting on merchandise globalization based on the megatrend of China's supply chain transforming from cost efficiency to quality advantages. We are also optimistic about the opportunities for innovative business models in various fields as the advanced business philosophy and talent in China goes global.

Simon Wang: Globalization is a megatrend in the long term. Expanding in more regions is a risk-reducing tactic for companies.

「As Managing Partner at Engage Capital (Chinese: 亦联创投), Simon Wang focuses on consumer Internet, industrial Internet, and crossborder sectors. He led the investments in YY, Tantan (Chinese: 探探), Huya (Chinese: 虎牙直播), BIGO, Mini World (Chinese: 迷你世界), Kuaikan (Chinese: 快看), Shopline, WOOK, Hibobi, WATTMAN (Chinese:瓦特曼) and others.」

In 2022, our attention still went to content for global consumers and software, supply chain, and related facilities for global business. As investors, we noticed the decrease in number of startups seeking fundraising, but we could still locate quality targets after careful filtration.

Companies whose clients mainly distribute in foreign countries were affected by the fluctuations of the economic environment such as exchange rate and inflation. However, for enterprises that have been deeply engaged in globalization for a long time, the external competition environment had become less fierce in 2022, which benefited their growth. Meanwhile, we also noticed that lots of companies that had previously focused on the domestic market started to seek global opportunities.

During the globalization process, companies should stick to the fundamentals of business and keep examining the feasibility of their business models. They should grasp the universality in a widely applicable business model and build their own advantages through replication and amplification. On the other hand, adaptation to local environments is a necessary process. Before entering a new region, they ought to accumulate deep understanding of the local market and build ahead a team that has the ability to operate business locally.

Take ‘content globalization’ as an example. Some content may embody universality such as some Disney cartoons. In general, content with local characteristics account for a higher proportion. The production, management and operation methods of content in China provide useful insights, but companies must grasp the unique cultural demands and cultural consumption preferences to generate local contents, which is more important.

One uncertainty is whether geopolitics will trigger 'deglobalization' in the short term. At the same time, in a downward economy, capital markets will see fluctuations, which challenges the fundraising activities. This observation draws forth the importance of cashflow. Companies need to utilize the capital market in a healthy way without letting fundraising lead its path. Globalization is a megatrend in the long term. Expanding in more regions is a risk-reducing tactic for companies.

Wayne Shiong: With science and technology innovation being the national theme, investors and entrepreneurs should return to the fundamentals and have more patience.

「As Partner at China Growth Capital (Chinese: 华创资本), Wayne Shiong leads the investments in technology, including Deephi Technology (acquired by Xilinx NASDAQ:XLNX, Chinese: 深鉴科技), Nreal, WeRide (Chinese: 文远知行), LANDSPACE (Chinese: 蓝箭航天), Sinovation (Chinese: 华科精准), Singleron  Biotechnologies (Chinese: 新格元), 4B Technologies (Chinese: 福贝生物), ABM Therapeutics (Chinese: 璧辰医药), and InxMed (Chinese: 应世生物).」

At the end of 2022, the Chinese pharmaceuticals industry made a significant breakthrough in internationalization. Kelun-Biotech (Chinese:科伦博泰), a subsidiary corporation of the listed company Kelun Pharmaceutical (Chinese: 科伦药业) granted Merck (Chinese: 默沙东) the global exclusive rights (excluding China) to seven preclinical ADC drug candidates.

Out-licenses have been a 'dear dream' to Chinese pharmaceutical companies. Kelun not only realized this dream in this case, but also achieved an unprecedented deal amount of over USD 9 billion. Since the reform of the medical and healthcare system in 2015, innovative medicines have become the focus of investment. After seven years, Chinese innovative drugs finally won the recognition of international pharmaceutical corporations with a heavyweight deal, which was an inspiring finishing touch for Chinese pharmaceutical sectors going global.

We've been attaching great importance to innovative drugs for a long time. With the opportunities for macromolecules 'quitting the scene', the second cycle is yet to see daylight. Despite the depreciation of the pharmaceuticals sector in stock markets in 2022, the industry witnessed significant progress in R&D. For example, Madrigal achieved positive clinical Phase III results for its non-alcoholic steatohepatitis drug Resmetirom, which was highly valuable. The capital market can be 'emotional' sometimes, but it will offer fair valuations in the long term.

In 2022, some hard technology industries such as semiconductors and new energy went through several rounds of valuation adjustment. Restrictions from the US forced the Chinese semiconductor manufacturers to adopt an independent method. Although it takes time for the advanced manufacturing and precision equipment to strive for maturity, we could expect a bright future for Chinese semiconductor manufacturing industry to come with the guidance and support of national policies. More patience and time are required.  With science and technology innovation being the national theme, investors and entrepreneurs should return to the fundamentals and have more patience instead of just chasing after quick profits.

In retrospect, The Beijing Equity Exchange and the STAR Market made some directional adjustments under policy guidance and released positive signals to sci-tech companies. Consolidations and reshuffling occurred in some sectors such as among the ‘new force’  of the automobile industry. Although the capital sum in circulation has decreased in the depressed market, it is still sufficient – and startups are still in active exploration. The loosening of real estate regulations and the softening on the Internet platforms since the end of 2022 has been helpful towards the confidence recovery of domestic sci-tech entrepreneurs and investors.

We will attach great importance to themes such as private aerospace, gene editing, medicine and devices targeting aging problems, and semiconductor advanced designing in the future. In the longer term, controlled nuclear fusion and quantum computing are also in the range of our research.

Joe Wei: Going global has become a steady path for the development of startups and a necessary road for the growth of Chinese enterprises.

「As Founder of Grand View Capital (Chinese: 大观资本), Joe Wei focuses on the investment in mobile Internet going global, including applications, games, crossborder e-commerce, crossborder enterprise services, and others. He led the investments in Haoshiqi (Chinese: 好食期), MR.FARMER (Chinese: 新农哥), Drive The Life Technology (Chinese: 驱动人生), LinkSure Network (Chinese: 万能钥匙),, Newsbreak, Habby (Chinese: 海彼网络), BattleCry (Chinese: 战吼科技), Shoplazza (Chinese: 店匠), Starmerx (Chinese: 星商), MOPO (Chinese: 摩普), WOTOKOL (Chinese: 卧兔), Menusifu, Hiretual, and others. 」

Going global has become a steady path for the development of startups and a necessary road for the growth of Chinese enterprises. Startups in other countries also joined in the megatrend of 'born global', which made 2023 a year of uniqueness. Under the current situation, competition in target markets has become fiercer while, on the other hand, Chinese global companies will embrace a more diverse global client base! From the perspective of an industry observer and investor, outstanding cases and investment targets in different sectors are starting to burgeon in various countries.

Three years of the epidemic have accelerated the digital transformation of global offline businesses, which is spreading out from mature markets represented by the US. Take mobile payment as an example: major platforms in the US have been speeding up their coverage and transformation of offline businesses and the replications worldwide. This trend signifies significant opportunities for global companies with Chinese backgrounds. The commercial digitization at home was completed a lot earlier due to the popularization of Alipay and WeChat payment, which formed our advantages in model-building and experience accumulation. The immensity of global markets provides space for the development of Chinese global startups and makes us equivalence to the international corporates' competitors.

Because of the popularity of Alipay and WeChat payment, the business digitization process in China was completed early, which provides advantages in mode exploration and experience accumulation. The huge global market offers space for development and the opportunity to compete with well-known overseas companies for Chinese overseas startups.

There are three sectors that will face both historic opportunities and enormous challenges in 2023. The culture and entertainment sector – with output such as games, online literature, and short videos – assumes the responsibility of spreading China's creativity to the world. In the cross-border e-commerce sector, export-oriented products and services that have a strong basis in the global supply chain and are facing the opportunities of becoming influential global brands. Cross-border SaaS companies, by providing products and tools based on advanced methodology and perception, may grow to be global unicorns.