.png)
2018.11.21
As one of "the dystopian trilogy", 1984 by George Orwell was published in 1949, which unfortunately foresaw what happened in the next decades after that. Orwell effectively explores the themes of mass media control, government surveillance, totalitarianism and how a dictator can manipulate and control history, thoughts, and lives in such a way that no one can escape it. “War is peace. Freedom is slavery. Ignorance is Strength.” Orwell’s novella is a warning for the human race. It highlights the importance of resisting mass control and oppression.
To Live, one of China’s most influential books, portrays one man’s transformation from the spoiled son of a landlord to a kindhearted peasant. It is a heart-wrenching saga, written with beauty, suffering, defiance and hope. It highlights people’s tolerance to pains and agony and the tragedies brought by various campaigns. Yu Hua suggests that the very essence of literary work lies in people and humanity. To live was adapted for film by Zhang Yimou which was nominated as one of two greatest contemporary films together with Farewell My Concubine by Chen Kaige.
On September, 2019, when we were traveling in Czech, we talked with some scholars and researchers on Czech literature about the Unbearable Lightness of Being. They seemed indifferent to it. It was probably because they had gone through the tough times. Our generation still puts mind to the Czechoslovakian Prague Spring and the Velvet Revolution. It is a work of the boldest mastery, originality, and richness.
Reading Kafka’s classics is enjoyable. It challenges your thinking and norms. He devoted all his leisure time in writing. He trained as a lawyer and later was employed full-time by an insurance company. He is nominated as the founder and pioneer of modern literature of the world. The classics are the most enduring of all. The Metamorphosis is a fairly easily read Novella of Franz Kafka. He writes in an aloof manner full of legal and scientific terms. Yet his universe also has insightful humor, all highlighting the "irrationality at the roots of a supposedly rational world".
One who wants to fully understand capitalism should read this authoritative and accessible book on capitalism, Capitalism: A Short History, authored by Jürgen Kocka, one of the world’s most renowned historians and tenured professor of Berlin's Humboldt University. Featured simplicity and clarity, this book provides a concise and comprehensive history of capitalism within three chapters. It also addresses the idea of capitalism in the work of thinkers such as Marx, Weber, and Schumpeter. Kocka analyzes capitalism from the angle of culture. He believes that capitalism is more than an economic system but a branch of culture.
Rewritten by: Luo Xinying, Edited by: Du Zhixin, Wei Yiyi
Over the past year, the bull market returned, with technology leading the way.
As I said back in October 2024, the rally that began on September 24 was not merely a rebound, but a reversal. Since then, China's capital markets have undergone a broad revaluation, moving from undervaluation toward fair value.
The Shanghai Composite Index reached its highest level in a decade. The "Yi-Zhong-Tian" trio—Eoptolink, Zhongji Innolight and TFC Communication, three prominent Chinese optical communications stocks—saw their share prices multiply severalfold in a single year. Cambricon's market capitalization briefly exceeded RMB 600 billion. Elsewhere in the technology sector, triple-digit price-to-earnings ratios and valuations exceeding RMB 10 billion became commonplace.
Some investors were greedy; others, fearful. Still others asked me: Are technology stocks in a valuation bubble?
My answer is that what we are witnessing is the hunger and anxiety of an era, reflected in the capital markets. Once you understand this, the current fervor for technology investing is no longer difficult to explain.
Investment has nothing to do with macroeconomics, but everything to do with geopolitics.
China-US relations will shape the investment landscape for decades to come. Geopolitics has played a major role in shaping the hunger and anxiety of our times, fundamentally reshaping the way we invest.
What, then, lies at the heart of China's hunger and anxiety?
The Fourth Industrial Revolution is already underway, yet China has not fully overcome the technological shortcomings left by the Third. There is no time to lose.
This is why some people wonder: Why do Chinese computing chip companies command such high valuations when their technologies still lag so far behind NVIDIA's? Why does NVIDIA trade at just 50 times earnings, while a company hailed as "China's answer to NVIDIA" commands a multiple of 300?
To me, this gets the logic exactly backward.
It is precisely because these companies cannot catch up with NVIDIA in the near term that they command a higher strategic premium. The wider the technological gap, the greater the strategic value.
The further something lies beyond our reach, the stronger our hunger. The harder it is to catch up, the deeper our anxiety. If China were to achieve a complete breakthrough in computing chips one day, valuations might actually come down.
Where can one find China's most spectacular natural landscapes?
Much of the answer, I believe, lies in and around the Hengduan Mountains: the Meili Snow Mountains, Jade Dragon Snow Mountain, Mount Gongga, Mount Siguniang, Jiuzhaigou, and many others. Vast differences in elevation and deep fault lines have given rise to landscapes of extraordinary grandeur.
Hard-tech investing follows a similar logic.
Technological gaps, discontinuities in capabilities, and missing links in industrial systems: a leap in difficulty brings a leap in valuation, and a successful breakthrough can, in turn, bring a leap in returns.
This logic extends well beyond computing chips. It is equally evident in memory semiconductors, commercial spaceflight, and other sectors where China still faces substantial technological gaps with other countries.
It was precisely this conviction that led CoStone Capital, starting in 2016, to decisively focus its investments on three areas: hard tech, emerging industries, and life sciences and healthcare. In this context, "hard tech" refers specifically to important industries in which China faces a technological gap with the United States.
Thanks to this forward-looking strategy, CoStone Capital established an early presence across the full value chains of key sectors, including semiconductors, artificial intelligence, and robotics.
Looking ahead, the frontiers of technological progress and industrial upgrading are boundless. Nor can the gaps in hard technology be closed overnight. The twin windows of opportunity presented by technological innovation and the development of homegrown alternatives to foreign technologies have only just begun to open.
The road ahead is long, but the future holds immense promise.
As an investment firm, CoStone Capital will continue to invest where the hunger and anxiety of each era run deepest, move forward with the tensions that shape our times, and extend our reach toward the most challenging—and most important—frontiers.
Spring 2026