What many market observers either don’t know or under-estimate is the fact that China’s ambitions exceed the boundaries of our planet. In a previous article, we have made it clear that comparing China to the USSR and/or the current geopolitical context to the Cold War period is sub-optimal at best, but that does not mean there are zero common denominators.

The so-called space race represented one of the hallmarks of the Cold War, from Yuri Gagarin who ended up being the first person to venture into outer space to the Apollo 11 mission that enabled a US mission to land on the moon. Needless to say, however, these achievements came at oftentimes tremendous costs, with the peak in terms of public spending on NASA as a percentage of the GDP being the 4.41% achieved back in 1966.

Since then, in the absence of a major propaganda-related incentives system and in light of the fact that the general public had other priorities when it came to capital allocation, the US took major steps back and gradually encouraged the public sector to take over (Jeff Bezos with Blue Origin LLC, Elon Musk with SpaceX and Richard Branson with Virgin Galactic being let’s say the private sector space pioneers at this point in time… with the important caveat that NASA is still the reference point for the time being and private initiatives are still in their relatively early stages), let’s not even talk about the USSR and subsequently Russia after the fall of the Soviet Union, with space exploration not exactly representing a priority.

For today’s China, however, space exploration seems to be more and more attractive.

As those of you who have been following our work here at ChinaFund.com for an extended period of time already know, China loves making long-term plans and the space exploration dimension most definitely doesn’t represent an exception. In fact, the space presence of China represents a key area of interest when it comes to the vision China has for the 1st of October 2049, a date which will mark the 100th year of existence of the People’s Republic of China.

What, specifically, does China have in mind?

To put a more detailed perspective as well as rough timeline on the table:

1. Investing in the infrastructure it takes to be able to effectively launch and manage missions
2. Once that infrastructure is firmly in place, it will be time for China to have its very own permanent space station
3. Moving on to a more let’s say military dimension, what follows naturally is China’s intention of securing (and by that, we mean dominating) the so-called cislunar space, in other words the space between the Earth and Moon
4. Next, we have the goal of (of course) establishing a presence on the Moon and ensuring that a solid enough infrastructure is in place to power its base(s) in a sustainable and even decentralized manner (for example through so-called SBSP or space-based solar power technology)
5. Last but not least, there are of course goals surrounding more meaningful space exploration on the one hand and on the other hand, even turning the space dimension of its strategy into something economically viable through methods such as asteroid mining

While most of these initiatives will probably involve public spending, it is worth noting that private initiatives with respect to space exploration are encouraged in China as well, with noteworthy achievements such as the iSpace company successfully launching a rocket into orbit in mid-2019. Other companies active in the space include LandSpace, OneSpace and LinkSpace. Again, public spending is most definitely the main game in town but private initiatives might also generate unexpected (hopefully positive) achievements.

When it comes to China itself, just a few of its plans and achievements in the space exploration department include:

1. Creating the very-first publicly funded SBSP plant, an investment in the $30 million zone
2. Investing in a future nuclear-powered space vehicle, with 2040 being the current target for an official test. These vehicles will have a commercial role, one related to asteroid mining, as well as roles pertaining to deep space exploration
3. Paving the way for a 2020 Mars probe (Orbiter + Lander) and, ultimately, its first human mission by the year 2036
4. Progress with respect to the rocket dimension, from fine-tuning its Long March 5 rocket (25-ton Low Earth Orbit potential and 14-ton Geostationary Orbit potential) to working on the Long March 9 one (140-ton Low Earth Orbit Potential and 50-ton Lunar Transfer Orbit potential)

The list could continue, but an important observation arises: while meaningful developments have already taken place, most of the information we have provided is future-oriented. As such, it would be a bit of an overstatement to consider China a present-day leader when it comes to space exploration. At this point in time, let’s just say the US (NASA as well as the private companies mentioned in this article… but especially NASA) is still the number one player in this space… pun intended.

Therefore, it makes more sense to consider it an ambitious contender at this point, with it remaining to be seen to which degree its ambitious to the point of overly-ambitions (as tends to be the case with China when it comes to a wide range of other dimensions as well) plans will materialize.

1. Collective wealth, in other words the “wealth” of China as a whole. And in this respect, the fact that China now represents the world’s #2 economy in terms of nominal GDP speaks for itself. Whether we are highlighting the overall activity of China by analyzing its GDP or referring to some of the most impressive sectors of the Chinese economy in terms of the degree to which they have benefited from investments (infrastructure, for example), it is abundantly clear that China has become a remarkable wealthy nation
2. Individual wealth, or if you will, asking ourselves if the average Chinese citizen is as let’s say wealthy as China as a whole on a comparative (to the West) basis. Unfortunately, the answer to that question is a resounding “no” at this point. Despite robust GDP growth rates where double-digit YOY increases were the norm up until 2010 and solid single digit increases as of that point, the GDP per capita in China is barely north of $10,000. Compared to Western countries where it tends to be 6-7 higher relatively frequently (6.5 times higher if we are to refer to the United States), let’s just say that while China has caught up to its Western counterparts in terms of nominal GDP, it is still mostly a function of its very high population and the average Chinese citizen still has a fair bit of catching up to do

What are the implications with respect to the wealth management industry?

Is China a promising destination for wealth management experts who are interested in tapping into what is quasi-unanimously referred to as the Chinese gold mine?

In our view, it’s ultimately all a matter of calibrating expectations.

On the one hand, profit opportunities abound to a significant enough degree for us to be more than confident in our statement that in terms of potential, considering China a “new frontier” from a wealth management perspective is not exactly far-fetched. Yes, it is true that the average Chinese citizen isn’t exactly drowning in excess liquidity. However, compared to a few years and especially decades ago, at least the Chinese citizens in question *have* excess liquidity, something which would have indeed been considered nothing more than a pipe dream in the past.

On the other hand, “patience” is the operative word. Simply put, the average Chinese citizen is not yet prepared to become a meaningful consumer of wealth management services. Nor is he let’s say financially sophisticated enough to even think about wealth management and how it might be beneficial (for the most part). We need to understand that for most people, the concept of setting money aside each month and thinking what (if anything) they should be doing with it is still something they are getting accustomed to. Yet despite short-term hiccups, a consistent increase in interest from the average consumer with respect to wealth management services is pretty much inevitable.

What if we move away from the average consumer?

As made clear rather frequently on this website, growth in China can be considered asymmetrical in many respects. And despite what your (more or less) friendly Communist Party of China ideologue might tell you, “socialism with Chinese characteristics” has been remarkably successful at creating individual wealth accumulation success stories.

To put it different, while the average Chinese citizen is not exactly in a hurry to read up on wealth management services, quite a few entities have been on the very direct receiving end of China’s economic growth. In some cases completely legitimately, in other cases perhaps less so. At the end of the day, however, the fact remains that a very financially potent Chinese “new money” class has emerged. Individuals who are now wealthy beyond their wildest expectations thanks to a combination between being at the right place at the right time and knowing when to take action, and who in many cases don’t exactly know how to manage their newly-found wealth properly. First-generation prosperity, if you will, with the tremendous potential catering to the needs of this niche comes with.

At the end of the day, the wealth management industry in China is most definitely alive. Whether we are referring to opportunities related to the present (catering to the needs of those who have become asymmetrically wealthy as a result of China’s economic growth success story) or opportunities that have to do with the future (keeping a close eye on the increasingly affluent Chinese middle class, for example), wealth management experts have more than enough opportunities to get and stay busy in China. For professionals willing to accept the shortcomings associated with embracing a domestic wealth management industry which is still in the “Wild West” stages in many respects, China represents a potentially career-defining jurisdiction… to put it mildly.

Whether we’re talking about the “Google killer” (at least domestically) Baidu, the e-commerce giant Alibaba or the #1 player when it comes to the mobile dimension of the Internet called Tencent, there is a staggering amount of money to be made by servicing the needs of domestic Chinese consumers, so let us briefly refer to each entity:

• Baidu, the search engine giant of China, with its 2018 revenue of almost $15 billion ($14.88 billion, to be more precise). As impressive as the numbers may seem and despite a more than healthy YOY growth rate of 28%, Baidu can be considered the most “tame” entity of the BAT trio. While it is trying to diversify and explore anything from smart home solutions to autonomous vehicles and smart transportation, it has nevertheless been less successful than the other three contenders in this respect
• Alibaba, with its $54.78 in yearly revenue for 2018 that has been facilitated by a growth rate more than two times greater than Baidu’s, makes it clear that it intends to dominate. Leaving revenue numbers aside, the fact that it went from 102 million users on its various retail platforms to 654 million users in one year speaks for itself. Aside from its core online commerce businesses, it’s worth noting that growth across a wide range of sectors has been impressive, for example a 76% YOY growth rate when it comes to its cloud computing segment
• Tencent, with its roughly $45.5 in revenue for 2018, is without a doubt Alibaba’s #1 competitor, with the “AT” dimension of the “BAT” trio leaving Baidu quite a bit behind. Best known for its gaming-related projects (with Tencent being considered the largest company in gaming worldwide) that brought in slightly under a third of its 2018 revenue, Tencent is also expanding into other areas, with for example social media bringing in roughly a fourth of its yearly revenue, an increase of 47% on a YOY basis (thanks to projects such as WeChat, with its over one billion users).

Needless to say, it becomes abundantly clear that we are dealing with a textbook case of sibling rivalry when it comes to Alibaba and Tencent. For example, with China being well on its way to becoming a cashless society in light of the fact that based on recent surveys, roughly 7 out of 10 Chinese citizens no longer consider dealing with physical cash a necessity, the rivalry between Tencent’s WeChat Pay and Alibaba’s Alipay is nothing if not fascinating. Whether we’re talking about ordering food on ELeMe (Tencent) as opposed to doing it on Meituan Waimai (Alibaba) or the more than frequent other examples of rivalry between these two entities, it is noteworthy to put it mildly that not only has China managed to dramatically decrease its dependence on Western companies, there has been and is so much growth that the “domestic player to domestic player” competition is the epitome of fierce.

All things considered, this much is certain: Western players cannot afford not to take not the possibility but downright reality of Chinese future dominance into consideration. With each year that passes, Chinese companies in the tech sphere become more and more sophisticated and while it may currently be tempting to limit oneself to simply living in a bubble which revolves around considering Western entities untouchable… perhaps it would not be the wisest idea in the world.

Of course, there are significant barriers involved and there’s a world of difference between the BAT trio (or other domestic tech companies, for that matter) increasing their revenue dramatically as a result of Chinese market growth and replicating the same trajectory internationally. However, as examples such as the explosive growth of TikTok in the West make clear (and among a remarkably young demographic, mind you)… never say never, especially as far as China is concerned.

As can be seen, there have been two dimensions with respect to how money can be made in China via crypto: on the one hand, the fact that more and more Chinese citizens have excess capital that they are eager to invest (among other things, yes, in crypto) and on the other hand, the fact that various businesses such as mining have managed to develop an edge due to China-related advantages. As an additional tidbit on mining, it’s downright ironic that even bitcoin, which is considered the epitome of decentralization, is actually in a highly centralized paradigm when it comes to mining, with Chinese miners controlling a huge percentage of the hash power.

Unfortunately, it’s time to move on to the “hate” dimension and that is represented by the fact that the authorities in China are not exactly thrilled with the crypto world. Politically-speaking, it should come as no surprise in light of the fact that the Chinese system revolves around centralization, whereas the main selling point of bitcoin and other crypto projects tends to be the exact opposite, their decentralized nature.

Secondly, Chinese authorities are also worried about the capital flight dimension, especially when it comes to situations such as the 2015-2016 stock market turbulence they’ve experienced. Simply put, they want Chinese capital to remain in China and are therefore less than willing to make the lives of those who want to diversify easy. On the contrary. As such, they have resorted to all sorts of measures that revolve around “banning” bitcoin and crypto-related activities in one way or another. To illustrate this, it’s worth noting that a few years ago, Chinese crypto exchanges (platforms through which cryptocurrencies can be bought and sold) were among the top players in the crypto exchange world, whereas nowadays… let’s just say that is hardly the case anymore due to the players in question being essentially forced to change jurisdiction.

The same principle is valid when it comes to other areas such as mining. At the end of the day, miners need to live with the fact that lower energy prices and various other opportunities sometimes come at the expense of legislative clarity and China is a textbook example to that effect. To explain this by referring to extreme examples, let’s assume you want zero headaches as a bitcoin or crypto miner and therefore choose to set up shop in a Western jurisdiction where the legal framework is crystal-clear. You’ll have additional piece of mind on the one hand but on the other hand, running that business in a profitable manner will prove to be a headache because pretty much all costs will be higher (from electricity costs to staff-related ones) and you will have to compete with less risk-averse miners who are rewarded for taking on a higher degree of risk with lower costs.

And speaking of lower costs, it’s time to go to the opposite end of the spectrum, with the most “adventurous” miners being able to even establish less than legal businesses in Venezuela and take advantage of quasi-free energy. Of course, needless to say, there will be a high price to pay if or when they are caught. China can be considered somewhere in the middle at this point and as its dominance in the mining world makes clear, businesses are willing to accept the risks (legislative ones, especially) in light of them being offset by the rewards (lower energy costs, lower infrastructure maintenance costs, lower wages and so on).

After drawing the line, can China’s relationship with bitcoin and crypto be described using just one word? Yes, with “volatile” being the most relevant choice. Should we aim for a two-word explanation instead, “barely tolerated” would be it. Yet despite the (many) risks involved, as the numbers show, quite a few risk-tolerant Chinese entities are more than willing to embrace bitcoin/crypto in China and as such, an analysis of the cryptocurrency world which doesn’t include China is incomplete at best or useless at worst.

One example of such instances is represented by exotic assets, from domain names to cryptocurrencies. Realistically-speaking, domain names as an asset class have not even been around for a quarter of a century, whereas cryptocurrencies are celebrating their one-decade anniversary. Yet despite the novelty of these assets, both industries have become increasingly dominated by Chinese capital over the past few years.

I am actually the only economist who covered the Short Domain Mania of late 2015 to early 2016 (in both of my books), a phenomenon which mostly came about as a result of interest from China. Allow me to elaborate: the mania in question is related to short domains (three-letter dot com domains, three-number dot com domains, four-letter dot com domains and the list could go on and on), mostly because Chinese investors can allocate capital in this direction without there being a language barrier involved (like with one-word domains, for example). While these domains have been considered valuable let’s say ten years ago as well, it was Chinese interest that bought them into the spotlight in a systemic manner. Even more so, the rules have been re-written by China when it comes to which short domains are more valuable than others.

As such, three-letter or four-letter domains without the letters AEIOUV became the most valuable category, called “Chinese Premium” domains due to the fact that those letters do not exist in Pinyin and the abbreviation potential of domains containing the letters in question is therefore limited. In the past, AEIO were considered “the best of the best” in terms of letters, for comparison.

The same way, three-number or four-number domains which contained let’s say the number “8” became more valuable than others due to the positive connotation in China, whereas domains with the less desirable “4” were considered less valuable. Again, these rules have changed exclusively due to the Chinese variable.

The effect of this newly-found interest from China?

Let’s just say that for example “Chinese premium” four-letter dot com domains which could have been bought for a mere $8 or less in 2009 or 2010 (the standard registration fee, since the domains were actually available after a failed attempt at registering all four-letter dot coms, failure brought about by the Great Recession… ironically, most domains that are considered Chinese premiums today were perceived as the worst of the worst back then) ended up selling for over $2,000 in late 2015 to early 2016 and the same way, pretty much all short domain categories experienced a tremendous jump.

Cryptocurrencies do not represent an exception.

While I am no longer the only economist out there who covered this asset class properly, I’ve been vocal enough over the years to believe in my ability to keep my finger on the pulse of this industry as well, an industry that is currently being dominated to a very significant extent by capital from China. Ironically, the Chinese domination is so profound when it comes to the mining sector of the crypto space that it risks jeopardizing the very decentralization cryptocurrencies became famous for.

Simply put, there is so much mining going on in China (due to opportunities brought about by cheaper energy costs as well as other variables) that Chinese mining interests control well over 50% of today’s crypto mining activities, making it technically possible (albeit unlikely) for these miners to even reorg the blockchain (for example, decide to eliminate a recent transaction or multiple transactions from the blockchain). While the cons associated with doing this would most likely exceed the pros, it shows to which extent Chinese domination is manifesting itself in the crypto space.

From mining to new crypto projects and a lot of the capital poured into existing ones (most notably bitcoin, of course), it’s impossible to make sense of what’s happening in the cryptocurrency world at this point without paying significant attention to the Chinese variable. From mining cartels which even make some question the decentralized nature of crypto (at least the mining dimension) to so-called “whales” that move the market though the sheer volume of capital they control, there’s just no escaping China.

As can be seen, while the above doesn’t “prove” that the average Chinese investors is extremely sophisticated (as the previously mentioned dominance when it comes to exotic assets such as domain names and cryptocurrencies) has been orchestrated by relatively small groups of investors, it does make it clear that questioning the ability of Chinese entities to dominate even the newest sectors of the investing space is most likely not the wisest of approaches.

More specifically, there are a lot of industries China is currently dominating. Not projected to be dominating, not on its way to dominating. But rather dominating at this very point in time. In no specific order, here are some of the most surprising ones:

1. Online gaming. Needless to say, it’s a booming industry, with over two billion gamers worldwide who have spent almost $140 billion on games in 2018, a YOY increase of over 10%. Of this very generous pie, China’s consumers are claiming over 25% and as far as Chinese game producers are concerned, they are dispelling the myth that video game production has to be a US or Japanese endeavor. While you might have not heard as much about games produced in China as a Western consumer, just think about China’s 1.4 billion population. In light of the fact that one out of five to six people is Chinese, you can generate Earth-shattering revenue numbers by simply catering to the local market as a Chinese game producer
2. Tourism. We all know about the jokes surrounding Chinese tourists and their photo-taking habits, but things start getting quite serious once you analyze the numbers behind this phenomenon. According to Ctrip’s 2017 data, 130 million Chinese tourists accounted for over $115 billion in overseas spending in 2017 alone, a 7% increase compared to the previous year when it comes to the number of tourists and a 5% increase for YOY spending
3. Clean energy. China’s investments in renewable energy are nothing short of staggering, in line with their Paris Agreement pledge for 2030. By 2020 alone, China is expected to invest roughly 3.2 trillion Yuan (over $350 billion) in renewable power-related projects. As it is, China is investing twice more than the United States in renewable energy at home, actually more than the United States and the European Union combined. It should therefore come as no surprise that China is the worldwide leader in both solar and wind energy production
4. Online commerce. While pretty much everyone in the Western media associates online retail with the United States due to Jeff Bezos being the wealthiest man in the world and Amazon being considered an unbeatable juggernaut… the numbers paint a remarkably different picture. As per McKinsey Global Institute data, China went from representing less than 1% of the global e-commerce volume to over 40% at this point. By comparison, the percentage for the United States is not that far away from half that, down from its 2005 high of 35%, so it actually never even reached a 40% dominance rate. Simply put, China handles more transactions than the US, Japan, Germany, France and the United Kingdom combined, through companies such as Alibaba (largest IPO in history) and JD.com. While you personally most don’t use these two and other Chinese companies (although even that is starting to change), over one billion people do
5. Electric vehicles. Contrary to what you might have thought was an industry dominated by the European Union or the United States and where China has a lot of catching up to do, China is actually the world’s number one market for electric vehicles. As per Forbes data, China accounts for roughly 50% of global electric vehicle sales, whereas Europe is sitting at 26% and everyone else combined is left fighting for the remaining 35%. While companies such as China’s BYD have considerably less mainstream notoriety than Elon Musk’s Tesla, they’re silently but steadily consolidating the domination of China in this space

When investing in China (or anywhere else, for that matter), the name of the game is looking under the proverbial hood and finding out what the numbers say. Has the average Western investor who is interested in gaining exposure to Chinese assets ever played a Chinese video game? Most likely not. Heard about BYD’s electric vehicles? Not very likely.

Yet despite this lack of notoriety in the West, the numbers make it clear that the days of China playing catch-up as far as these industries are concerned (and many more) are long gone.

At this point and beyond, there is more than enough in terms of capital and infrastructure for China to be a dominant player in cutting-edge industries as well and Artificial Intelligence does not represent an exception.

Without further ado, the following companies represent the most well-known players in China as far as the AI space is concerned:

• Ping An Technology – one of China’s leading insurance companies, believe it or not, a company investing heavily in Artificial Intelligence and using it when it comes to both industry-specific projects (using image recognition technology to assess the damage that has been done to a car after an accident) and applications such as medicine (using image recognition to interpret X-rays), customer support (assessing the customer’s mood), music and so on
• DEEPHi, creating hardware and microchips for AI, receiving funding from both important players in China (Alibaba Group’s financial entity, ANT FINANCIAL) and international companies (Samsung). While software providers tend to steal the thunder from hardware companies when it comes to reputation, it is worth noting that without the hardware infrastructure to make it all possible, the various applications that become smashing hits would be nothing more than business models written on a piece of paper
• CloudWalk, which started out by providing technological solutions for border control based on image recognition and ventured into other spaces as well, including supplying technologies to the banking sector, for smart homes and so on. Among other things, CloudWalk also represents the first African AI project that is China-centered
• Face++, which managed to beat huge entities including Google, Microsoft and Facebook in international competitions and has users in over 200 countries. They are respected for their ability to use facial recognition in the security field but are venturing into other territories as well, such as video recognition, IOT and robotics. As far as robotics is concerned, Face++ has been buying robotics companies and is currently working on projects for Foxconn, the company famous for making Apple products.
• SenseTime – the most valuable AI startup worldwide, receiving $1 billion of VC funding in September 2018 and raising its value to $6 billion. It was founded by a prominent University of Hong-Kong scientist and has done well due to its talent and ability to retain talent (an issue that is still problematic in China). It supplies products to hundreds of entities, from auto companies, banking industry players to robotics-related ventures and the list could go on and on

After drawing the line, while it’s important to acknowledge that there are still problems when it comes to Chinese hi-tech projects (such as the difficulties in retaining ultra high-end talent, which is obviously being courted intensively by players in the United States and other rich nations), words cannot even begin to describe the progress that has been made with respects to China’s ability to reach parity with the world’s most developed countries.

In no particular order, here are the seven most representative examples of situations in which China has recently and relatively recently had remarkably positive contributions to society:

1. Scientific breakthroughs. For example, China successfully cloning monkeys in a Shanghai laboratory in 2018, an extremely significant breakthrough in light of the similarities between monkeys and our species, paving the way for human organ cloning and transplants. Aside from medical research breakthroughs, China was involved in anything from moon probes to artificial intelligence… to potential moon missions aided by artificial intelligence!
2. Climate change, especially in light of the US withdrawal from the Paris Agreement. China made its political move by filling the void left by the United States and has actually made tremendous progress when it comes to climate change collaborations with the EU and roughly 170 other nations. It is of course true that China remains an extremely significant source of pollution, but the fact that steps are being made in the right direction gives us valid reasons to be optimistic
3. Similarly, China has manifested a clear willingness to fill other voids left by the increasing tendencies of withdrawing from various obligations of the United States, a state of affairs made clear by examples such as China’s attitude in Davos at an event market by the absence of President Donald Trump
4. The Belt and Road Initiative of 2019, with China investing over 100 billion RMB in the Road Foundation, funds which will be used for much-needed infrastructure spending in neighboring countries such as Pakistan and Myanmar. From roads and bridges to energy infrastructure and sanitation infrastructure, this initiative provides important aid to less developed nations, enabling China to consolidate its position as a regional geopolitical player
5. On the same note, China’s commitment to investing in Africa represents yet another net contribution to humanity. Of course, there are long-term advantages associated with this approach for China as well but in the end, enabling African nations to experience decent economic growth can only be a win-win situation
6. United Nations contributions, with China raising its contributions to UN peacekeeping initiatives in both funding and manpower, from covering just 3% of UN-related costs in 2013 all the way to over 10% in the present. For the 2015 – 2020 period, China has pledged to contribute $1 billion to UN peacekeeping efforts
7. Being more flexible when it comes to allowing imports, an attitude in line with the growing percentage of its GDP represented by internal consumption, with China even organizing the first international import expo. Needless to say, the 1.4 billion Chinese market is a dream come true for any exporter, an extremely large and increasingly affluent market which can bring about generation-defining gains for well-positioned players

1. It’s no longer as dependent on exports, with over two thirds of its GDP being internal consumption-driven
2. China is the global leader when it comes to many industries one can consider cutting edge rather than just dominant as far as unsophisticated goods are concerned, from solar and wind energy to industries that pertain to the Fourth Industrial Revolution (The Internet of Things): Artificial Intelligence, Robotics, 5G and even 6G connectivity

As an example, as everyone is busy talking about 5G and its implications when it comes to everyday use (dramatic implications at that, with 5G being orders of magnitude superior to 4G), China is actually well underway to the 6G dimension. According to the head of the 5G technology working group at China’s Ministry of Industry and Information Technology (Su Xin), 6G projects will start being developed in 2020 with the goal of entering the commercial use phase in 2030.Quite a remarkable feat in light of the fact that as Commissioner Jessica Rosenworcel (Federal Communications Commission) pointed out, 6G networks are poised to become 1,000 faster than 5G ones, with 5G ones themselves being superior to their 4G counterparts in a seemingly impressive manner.

The end result will be an “Internet of Everything” world… literally everything, with the overwhelming majority of devices individuals used being connected to the internet through huge bandwidth and low latency connections facilitated by 5G/6G networks.

To give you a sense of perspective as to which industries China is poised to become a leader in, just imagine that 5G will enable people to download a full movie in approximately eight seconds, whereas 6G will enable that same person to download a hundred movies in less than one second. The same way, machine-to-machine communication will become seamless, with autonomous devices being the norm, whether we’re talking about self-driving cars or smart homes.

From an investing perspective, those who are stuck with the idea that the best China can do is imitate Western technology will lose out on exposure to companies and industries that are poised for explosive growth. Just look at the industries currently experiencing the highest growth rate in China (click HERE) and it will become crystal-clear that a 20th century perspective on China and the nature of its economy is obsolete… to put it mildly.

Think of it as history’s way of enabling China to have its revenge, after the many losses it had to deal with as a result of not reaping the rewards of the First Industrial Revolution quickly enough (click HERE for a brief economic history of China for further clarification). The same cannot be said about China when it comes to the Fourth Industrial Revolution. Not only is it not being left behind, on the contrary: it’s becoming a global leader in pretty much any fields which have to do with what will most likely come to be known as the Internet of Everything.

As such, you might just realize that none of the five sectors we are about to cover are completely in line with the preconceptions people tend to have with respect to China. Without further ado, here are the five top growth sectors of the Chinese economy:

1. Everything that’s green… not the color, but the energy dimension. Surprisingly enough for a country many tend to associate with the exact opposite, the green sector is surprisingly poised for growth. At this point, China is the #1 producer of solar energy and according to its 13th five-year plan, their goal is having 110 gigawatts of solar capacity operational by he year 2020. The same way, China is the world’s top producer of wind energy, with plans to reach 250 gigawatts in terms of capacity by 2020 and 495 by 2030. Last but not least, it should now come as no surprise that the largest electric vehicle market worldwide is… China. Even so, less than 2 out of 50 cars are electric, making it clear that ample growth potential continues to exist. The list could go on and on, whether we’re talking about biofuels, energy-efficient housing, vertical farming or recycling. For the 2016-2020 timeframe, investments in pollution prevention (again, just prevention) might reach $1.5 trillion
2. Healthcare, with projections having it aim for a compound annual growth rate of a staggering 12%. To make this clear, it is worth noting that healthcare spending in China is projected to reach $1 trillion per year by 2020, up from about a third of that in 2011. Also, as per the “Healthy China 2030” blueprint, the healthcare market is expected to be in the $2.3 trillion area by 2030
3. Drones, believe it or not, expected to experience a growth rate according to the MIIT (Ministry of Industry and Information Technology) of as much as 40% yearly for civilian unmanned aerial vehicles (UAVs), to a grand total of $9 billion by 2020 and all the way to $27 billion by 2025. As more and more uses are being found for drones, the actual growth rate could conceivably even surpass the already-optimistic growth expectations of the present
4. Artificial Intelligence, with aims to generate more than $59 billion in yearly output by the year 2025. At this point, China is still (quickly, however) catching up with the top players of the Artificial Intelligence space, with Baidu, Tencent and other tech giants as well as countless startups working on AI projects. Close to the second half of this century, China will likely become the global leader in the Artificial Intelligence space
5. Robotics, with the government’s Robotics Industry Development Plan aiming to generate an industrial robot manufacturing capacity of over 100,000 per year by 2020 and by the end of the decade in question, the industrial robot output is expected to be four times greater. As per the International Federation of Robots, China already has the world’s greatest number of robots, being ranked the top sales marker for industrial robots. It might only be a roughly $30 billion industry at this point but it is poised for significant growth. Not only that, but Chinese authorities do not want to limit themselves to China being home to the largest number of robots, they want more and more to be produced in China, by Chinese companies. By 2020, authorities want over 50% of the domestic demand to be met by Chinese suppliers, a scenario in which 20% of all industrial robots would need to be produced in China

As can be seen, other than perhaps the healthcare industry, it’s quite surprising how much growth industries one would not normally associate with the Chinese business landscape are generating. For this reason, it is once again worth stressing that most of the most popular “universal truths” about China are either downright wrong or no longer accurate. For this reason, performing your own due diligence, just like in any other field, is paramount.