Over the past year, we have followed two contrarian China trends. In recent weeks, both have been confirmed.
First: Chinese AI has reached the frontier at a fraction of the cost. We argued this in "In 2026, China Leads the United States in Both International Relations and Technological Innovation", "China Is Winning in Innovation Where It Counts: Markets, Not Just Research", and "China Has Closed the Gap With the United States in Artificial Intelligence". The evidence has now caught up: Apollo shows Chinese open-weight models trail the US frontier by just four months, while Moonshot's Kimi K3 recently outranked Anthropic's Opus 4.8 in blind testing. American developers are switching en masse to cheaper Chinese models like DeepSeek. This matters for investors because the AI boom is built on the assumption that US labs could charge premium prices and has driven significant US stock market gains in recent years.
Second: global opinion of China, in particular among young people, is improving, especially relative to the US. We wrote this in "China Already Has More Soft Power Than the Soviet Union Ever Did" and "A Majority of Singaporeans Now Prefer China to the US". This month, Pew confirmed it. Across 37 countries, 51% of the people have a favorable view of China, while 39% have an unfavorable view. Crucially, younger people in most countries have more favorable views of China than older people.
