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2013.02.05
By Hernando de Soto
Why the economic system of capitalism prevailed in the West, but stagnated in many developing countries? A question has been daunting many economists and sociologists. Developing countries seem like the outsiders in the capital market. The harder they try, the harder they can get invited. Hermando Soto found the answer. He believes that most developing countries are devoid of a mature mechanism to turn assets into capital. Therefore, they crave for capital. He illustrates five mysteries about why advanced capitalism failed in the developing countries. The mysteries of data missing, unknown capital support, political awareness, historical sensitivity and inadequate legislation in the book reveal the secrets of capitalism.
By Ding Xueliang
China made a substantial fortune since reforms and opening up and claimed to the world that “Chinese Model” worked. At the fortieth anniversary of reforms and opening up, we are able to take a breath and review the gains and losses. The book, “Debating the Chinese Model”, provides sharp and critical insights on “Chinese Model”. The definition, external and internal drivers, effect and price of “Chinese Model” are expounded in this book. It proposes an alternative when the Model bailed out. The author points out the hinderance and meanings of the alternative. His acute and profound analysis on the Model are illuminating for the readers.
By Yang Kui Song
The author shares his perspectives on the evolution of the Communist Party of China. It provides a set of systematic analysis on how and why the Communist Party of China could grow during the revolutions. Suffered from the second world war, the Party failed twice and was left weak after that. How a fragile and weak party developed into a strong and vigorous one and finally united the whole China? The answer can be intriguing. This book explains the essential decisions made by the Party to step into power and the internal and external forces that affect them.
By Yang Kuisong
The author sheds a different light on the history of the Republic of China. His light writings depict a vivid picture of that era for readers. These writings, including papers, essays, reading notes and speeches, are light but not loose. The author utilizes plain words in his writing which brings before the readers vividly many historic figures and events. This is a good place where you can spend your time.
By Yang Kuisong
The author, Pr. Yang Kuisong, illustrated the problems, status quo and methods of the history of the Communist Party of China. He shares his painstaking as an expert on Chinese modern history. His concerns and respect for mankind sprinkle throughout his words and phrases in this book. Though he excels in digging into historical phenomenon and conducting empirical research, he offers his own insights on China’s modern history, revolutions and the history of the Communist Party of China. Every critical historic event is revitalized by his unique writings and comments.
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