2018.05.25 CoStone Capital Views:
On May 21, the seventeenth CoStone Master Forum, which lasted for two days, was brought to a successful close in Hangzhou, Zhejiang. The theme was "Defining the Future and Surpassing Competition". Dr. Liao Jianwen, Chief Strategy Officer (CSO) of JD, and Dr. Ge Dingkun, Co-chairman of Techand Ecology & Environment and Former Professor at the China Europe International Business School (CEIBS), were invited to give lectures in the Forum.
On May 21, the seventeenth CoStone Master Forum, which lasted for two days, was brought to a successful close in Hangzhou, Zhejiang. The theme was "Defining the Future and Surpassing Competition". Dr. Liao Jianwen, Chief Strategy Officer (CSO) of JD, and Dr. Ge Dingkun, Co-chairman of Techand Ecology & Environment and Former Professor at the China Europe International Business School (CEIBS), were invited to give lectures in the Forum.
Dr. Ge Dingkun: How to Sustain Corporates' Profitability?
Dr. Ge delivered a speech on How Can Medium-sized Enterprises Remove the Growth Bottleneck. He shared his views on enterprise strategy from two aspects: how to choose the battlefield and how to win the battle. He also emphasized that only by adopting a systematic thinking could a CEO make a roadmap or action plans with sustained profitability, thus breaking the bottleneck of growth.
Liao Jianwen: To Build A Coexisting, Mutually Reinforcing, and Renewable Business Ecosystem
Dr. Liao pointed out that technology and consumption upgrading had brought the retail industry to a turning point where the game would be played by totally different rules. The key is to build a business ecosystem where various business models and forms are coexisting and mutually reinforcing and keep renewing themselves. To create tremendous business opportunities, as Dr. Liao said, we have to empower the innovation of future online and offline retail business forms with the existing physical and digitalized retail capacity.
Speaker
Liao Jianwen PhD
Dr. Liao was Professor of Practice of Strategic Innovation & Entrepreneurial Management and Academic Director of the Innovation Research Center at the Cheung Kong Graduate School of Business (CKGSB). Now he is the CSO of JD. Dr. Liao worked in North America and Asia. He once taught at the Illinois Institute of Technology as a tenured professor, the Hong Kong University of Science and Technology, Peking University and CEIBS. Dr. Liao, with a particular interest in the integration of technology and business, enjoys a high reputation in his teaching in and interdisciplinary research on strategy, innovation and entrepreneurship.
Ge Dingkun PhD
Dr. Ge is Co-chairman of Techand Ecology & Environment, Former Professor at CEIBS, and Professor of Strategy at the Peking University HSBC Business School. He received his bachelor's degree in HR Management from the Renmin University of China, and a master's degree in Marketing Management and a PhD in Strategy & Entrepreneurship Management from the University of Illinois. Dr. Ge is a world-class Chinses-American scholar with intensive research on enterprise strategy of growth. He is one of the professors of strategy with the highest rating at CEIBS, described as an accomplished and widely praised "atypical" professor with "excellent academic performance" and a focus on "localization". His doctoral thesis won the Best Doctoral Thesis Prize of the COLEMAN Foundation, American Management Association. He is the only Chinese scholar who won the prize.
Rewritten by Jiang Xiaomei, Edited by Li Yunzhen, Du Zhixin
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