Pandawatch88 - A Hitchhiker's Guide to the China Stock Galaxy

**Graham Rhodes** (0:00)
This is Graham Rhodes, and welcome to the Longriver Podcast. I've had a lot on over the last six months, and I'm happy to restart this podcast after a long pause, especially to introduce you to my guest today. His name is Enrique Becerra, but you might know him from X as Panda Watch. Enrique is from Spain and moved to Hong Kong almost 20 years ago to pursue his career in investment banking in Asia. These days, he's one of the most irreverent, fun, and insightful China watchers I can think of. I invited him on the podcast today to talk about a presentation he shared recently, titled A Hitchhiker's Guide to the China Stock Galaxy, which he tackles head-on some of the commonly held beliefs and misbeliefs about investing in China. A quick note before I go any further, my conversation with Enrique is just for general discussion. It's not investment advice and nothing we say is an offer or solicitation. I think it's especially worth emphasizing that Enrique has no agenda to push and speaks for no one but himself. Though, as you'll share regularly on X and Substack, he is heavily invested personally in Chinese equities. You don't have to agree with him, but I think it's worth considering the points he makes and the data he uses to argue his case. With that, Enrique, welcome to the podcast.

**Enrique Becerra** (1:21)
That's awesome. Thanks a lot, Graham. First of all, it's very cool to be doing this with you, right? I have huge respect for the way you think. We have fantastic brainstorming sessions, so I always enjoy talking to you.

**Graham Rhodes** (1:32)
Enrique, why don't you set the scene for us and give us a brief introduction to who you are and how you ended up where you are today.

**Enrique Becerra** (1:38)
On my background, my career is actually quite straightforward, right? I was an investment banker for 17 years, all the way from analyst to managing director, and I came to Hong Kong in 2007, which as you remember was very crazy times, right? You had three IPOs, everyday market going crazy, things are the fun. And during my time in banking, my clients were primarily private equity firms, so my job was to find them companies to buy, you know, help them sell them. I did a lot of M&A, LBOs, IPOs, in China, in Korea, in Singapore, etc. And then in 2017, I started investing my own money, and I went quite broad at first, and of course I made a lot of mistakes. You are in your late thirties, and you think you know everything, and it turns out that you actually don't. So that requires some adjustment, and here we are today.

**Graham Rhodes** (2:27)
We're here today to talk about a presentation that you released earlier last month. It's called A Hitchhiker's Guide to the China Stock Galaxy 2026-2030. And you framed it as a presentation which aims to bring some clarity on how investors can approach the Chinese market in practice. Why don't you introduce the presentation to us and explain what prompted you to prepare it and share it with the world? Sure.

**Enrique Becerra** (2:52)
So basically, in January of last year, I started writing like a monthly post on China market, where I'm making money, where I'm losing money, just to have conversations with investors and common friends. And in some of these recent conversations, especially with fund managers, again, some of them good friends of yours, Becerra, how difficult it was to engage with US and European allocators, pensions, endowments, families, et cetera, about China. Because nobody wants to explain to the board or the clients why not put in money in China, right? There's almost career risk. There's always going to be a person on that board with a strong opinion saying, oh, what about Jack Ma? What about what happened to the educational companies? What about Taiwan? And the allocator, who is not sitting here, is not going to get into a debate on something that they don't fully understand the issue, and where there seems to be like a pre-agreed conclusion to their question. They have a score fuse to pay, and I fully understand that. But it still leads to a weird situation where you have the second largest equity market in the world, and the people in charge of allocating global risk, operating an environment that is not conducive to having a debate about measuring their risk, neither to measure their reward, which is the other side of the equation. I think that without an informed debate or view on both sides, the risk and the reward, you cannot really size up it.