Macro Background
After entering the 21st century, the world economy has experienced a continuous decline in growth rates. Various explanations exist for this phenomenon, with inequality being one of the most concerning issues and likely a key factor in the future. This presents a challenge for humanity: how to address inequality. If the issue is not effectively managed, the world economy’s eventual growth rate may fall back to 1%. In the face of exogenous shocks, the effectiveness of monetary and fiscal policies may weaken. Looking at the situation of the US Federal Reserve in 2023, global monetary policies will face significant challenges in three years. Organizations such as the International Monetary Fund, the World Bank, and the United Nations have all proposed inclusive growth as a long-term goal and established relevant units. Therefore, from a developmental trend perspective, ESG investing should be a temporary global consensus, and investment based on inclusive growth should be the future. To explore this issue, we have made efforts in five directions:
(1) Research:
We have studied the theory and practice of inclusive growth and its micro-foundations, completing four books in this area. The first book, “Reflections and Explorations on Issues Related to Economic Globalization,” focuses on how to coordinate the global value chain and address inequality from a value distribution perspective, providing a basic framework for international trade development. The second book, “Currency Stability, Inequality, and Business Cycle Research,” examines the relationship between monetary policy, inequality, and the business cycle within a single economy, providing a theoretical framework for addressing inequality. The third book, “Stages of Economic Development Study 1978-2023” reviews China’s economic development achievements and challenges since its reform and opening up, providing grounded suggestions for achieving common prosperity. The fourth book, “Inclusive Growth,” proposes a specific framework for inclusive growth and feasible investment methods based on the previous three books. Important content from this series has been published in academic journals to gain recognition.
(2) Investment in Practice:
Based on research, we have implemented inclusive growth investment methods in the stock market, bond market, and real economy. Specifically, in the stock market, we have selected stocks with long-term investment value using inclusive growth investment methods and used the characteristics of the business cycle for basket investment in stock assets. In the bond market, we have combined inclusive growth ideas with quantitative investment methods for basket convertible bond investment. In the real economy, we have focused on personal consumer goods’ performance within the inclusive growth framework, investing in a chip R&D company, a photovoltaic inverter company, and a personal fragrance brand based on ESG concepts, applying inclusive growth methods in corporate governance.
(3) Consulting Services:
Based on the research and investment achievements of inclusive growth, we provide consulting services to more institutions and individuals, offering feasible and grounded inclusive growth investment and management concepts. Currently, we have started working with think tanks in China and Singapore for research collaboration. To expand our influence, we have created a website and a public account, with the website targeting a global audience in English, documenting our thought process and promoting inclusive growth concepts.
(4) RMB Internationalization:
Inclusive growth is a global concept and requires experimental support at the global level. With the restructuring of the global landscape and the rapid prosperity of Middle Eastern economies, Saudi Arabia has shown strong interest in RMB assets. Recently, Saudi Aramco invested in Rongsheng Petrochemical through equity investment, marking the beginning of a new era. Under this context, we have decided to carry out investment practices based on inclusive growth with Saudi partners.
(5) Financial Technology:
Based on quantitative investment attributes, we provide alternative data, investment strategies, and personalized trading software to individual investors and institutions participating in quantitative trading.
Where Next?
In the next three years, all four books will be published by China Financial Publishing House and will be released as a collection on Springer, gaining recognition from both the academic community and the market. Based on inclusive growth investment practices, the stock and bond markets are expected to achieve excess returns.
During this time, we will continue to expand our research, investment, and consulting services to better understand and address inequality and promote inclusive growth. We plan to establish partnerships with more institutions, think tanks, and individuals across different regions to exchange knowledge and experiences. This will enable us to refine our strategies and develop new investment products that benefit a wider range of investors.
Moreover, as we work towards RMB internationalization and collaborate with partners such as Saudi Arabia, we will also explore opportunities in emerging markets and other regions, further solidifying the global impact of our inclusive growth investment approach.
In the realm of financial technology, we will continue to innovate and enhance our alternative data, investment strategies, and trading software offerings to empower investors with better decision-making tools. We will also seek to integrate cutting-edge technologies such as artificial intelligence, machine learning, and big data analysis to improve our investment models and forecasting capabilities.
By combining research, investment practice, consulting services, RMB internationalization, and financial technology, we aim to foster a global environment that embraces inclusive growth, helping to reduce inequality and create a more prosperous and sustainable world for everyone.