AI Boom, EM Strategy, and China Productivity (with Yvonne Man, Avril Hong)

4/24/2026 6:23:13 PM	short term up	7 days later	+1.27%	+1.27%

Asks if investors can continue to chase the momentum in North Asia and China AI plays.

Yvonne Man

Yan Wong

The AI boom is probably not over; there is still room to run compared to previous tech booms. It is dangerous to bet against the momentum, so investors have to follow it.

The gains are heavily concentrated in a few names, making it risky to bet against the trend.

Asks about the barbell approach and how to balance the AI trade with other investments.

Yvonne Man

Yan Wong

The barbell approach involves playing both sides: Asia tech (Korea, Taiwan, China) and commodity-intensive markets (Latam, Indonesia). The AI investment boom requires massive resources, so metal prices will continue to rally.

The investment in data centers and infrastructure is very materials-intensive, so even with the energy shock, metal prices have been resilient.

Asks about the risk of Indonesia's export controls for EM markets.

Avril Hong

Yan Wong

Indonesia is a frustrating market with near-term volatility, but it is very cheap. Export controls on critical minerals will create bottlenecks in supply, similar to semiconductor bottlenecks.

The market is the only one where dividend yield is higher than bond yield, making it a beaten-down but potentially valuable market.

Asks about the risks of concentration in Taiwan's AI industry and geopolitics.

Avril Hong

Yan Wong

The strategy is to play the boom for now as momentum is strong. However, Taiwan's market is dangerously concentrated in one sector, which has become a battlefield between the US and China. In the long term, this sector faces the risk of being hollowed out.

Neither the US nor China is comfortable with Taiwan's monopoly on such a critical sector, but in the near term, investors must participate in the boom.

Asks how investors should deal with concentration risk in Korea and Taiwan.

Yvonne Man

Yan Wong

Concentration risk for EM investors has never been higher. The way to deal with it is to play the boom in tech but also have exposure to the other side of the AI boom, which is materials, to provide a hedge.

If there is a shakeout in tech, the materials side will face less downside if the investment boom is real.

Asks about the impact of the AI investment boom on productivity in China and how it fits into the investment thesis.

Avril Hong

Yan Wong

Productivity growth in China benefits consumers through falling prices (deflation), making the RMB increasingly cheap. The long-term case for RMB appreciation to a 4-handle is very strong, driven by this productivity growth.

Unlike the US, where productivity benefits producers, in China intense competition passes the gains to consumers. This is the second wave of the China shock, moving up the value chain.

Asks about the plausibility of the RMB reaching a 4-handle and the impact on exporters.

Yvonne Man

Yan Wong

A 20-30% appreciation to a 4-handle over a multi-year horizon is not aggressive. The first wave of China shock saw 50% real appreciation. Rapid productivity growth in manufacturing makes this manageable for exporters.

The second wave of China shock will bring substantial RMB appreciation, similar to the first wave a decade ago.

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