Summary

The real long-term signal from the Two Sessions is not whether the deficit ratio comes in at 3%, 3.5% or higher, but Li Feng’s view that the Private Economy Promotion Law will become the signature reform of this cycle. Where ultra-long special treasury bonds are directed—“two major” initiatives and “two new” programs—and whether local special bonds can fund inventory purchases and stabilize property, will determine the near-term stimulus; he calls these “a game of guessing numbers.” From the 1979 Chinese-Foreign Equity Joint Venture Law to the 2019 Foreign Investment Law, the previous cycle was reform pulled by opening-up. If legislation promoting private enterprise is enacted for the first time, it could mark the next step in “another round of reform.”
The most important signal from the private-sector entrepreneurs’ symposium was not who sat in the room, but the cross-line coordination represented by “putting 5 Standing Committee members together.” Li Feng compared it with the Sept. 24 financial policy briefing: regulators were no longer speaking past one another, but sharing responsibility around common objectives. Local governments then rushed to identify their own “six little dragons,” converging on AI, B2B and B2C applications, intelligent robots and other implementation levers. Business confidence has clearly recovered, but one CEO offered a more practical test: “I’ll just see whether the tax bureau comes looking for me today.”
DeepSeek’s significance is not that it proves the government can plan a champion, but that it proves “this room doesn’t have only one door.” While OpenAI, Grok 3 and most other models were scaling up along compute clusters, context length and scaling laws, DeepSeek applied its quantitative-trading-driven ability to squeeze software and hardware toward efficiency and open source, while showing room to work around the CUDA barrier. Industrial policy can rapidly fill out supply chains and expand the pool of skilled technicians, but it cannot predict where innovation will break out; “putting in massive force creates miracles” is more accurately phrased as “it may not create a miracle, but it can at least create scale.”
Recent policy is opening both industry access and the circulation of rural assets, but implementation still matters far more than the documents. Policies to stabilize foreign investment and boost consumption put culture and education on the opening-up agenda; combined with the unified national market’s emphasis on equal access to production factors for SOEs, private firms and foreign companies, this means absence from the symposium does not imply industry disfavor. The recent rural homestead policy both confirms rights and permits constrained transfers across villages, aiming in part to connect rural residents who move to cities from wage income alone to property income, while preventing urban capital from hoarding land for arbitrage.
Li Feng believes the IPO channel has the basis for renewed expansion, with priorities shifting from “urgent” to “urgent and important.” Stabilizing daily turnover and liquidity is the prerequisite. Chips and AI are “urgent”; consumption and services are “important”; new-energy vehicles and consumer electronics sit at the intersection. Based on context, Insta360 combines algorithms, sensors, cameras, consumer exposure and more than half of its revenue overseas, making it “urgent, important and international.” A pure-consumption company such as Mixue is better suited to list in Hong Kong first, while the STAR Market’s fifth listing standard is “the most urgent within the urgent.”
Musk’s peak is turning into an execution risk for Tesla, not merely a question of personal style. The program’s framework is that people and entrepreneurs reflect during troughs and “float away” during peaks. In 2018, markets still feared Tesla would run out of cash; after Trump’s election, Musk entered an even higher phase. FSD’s initial performance after entering China was “very average,” while his pre-launch claim that Grok 3 comprehensively surpassed OpenAI and DeepSeek was not validated by market feedback. Tesla’s ambition to transform from an automaker into something else is therefore facing reality.
The Russia–Ukraine talks and the White House confrontation have simultaneously exposed fractures between the US and Europe over security and economics, creating a brief and unexpected diplomatic opening for China. Ukraine was initially excluded from US–Russia ceasefire talks, which Li Feng compared with China’s inability to influence the disposition of Shandong at the Paris Peace Conference. Military aid and NATO security guarantees then collided with US tariff disputes involving Europe, Canada, Mexico and China. Trump’s logic is not to weaken an opponent first, but to treat every diplomatic matter as a separate transaction and ensure that “in every transaction, the balance is on America’s side.”
Global capital is already trading the shift in expectations, but domestic economic activity has only shown a partial thaw and cannot yet be equated with a reopening of the primary market. India’s market has continued to fall as capital flows out, with some returning to Hong Kong; German equities have rebounded despite no clear improvement in the economy, possibly betting on a Russia–Ukraine ceasefire and easing energy constraints. US markets have drifted lower amid international tensions, Nvidia and DeepSeek, Tesla and other factors. Li Xiang observed that social and business spending was livelier than before the Lunar New Year, but some investors Li Feng spoke with were still making no new investments and focusing on managing existing positions and exits.

Deep dive

1. Two Sessions Numbers Determine Near-Term Force; Private-Enterprise Legislation Sets the Long-Term Narrative

The market is guessing the size and allocation of ultra-long special treasury bonds under the “two major” initiatives and “two new” programs: how much will go to consumption and industrial trade-ins, and how much to major infrastructure? The other focus is how far the deficit ratio will rise beyond 3% or 3.5%.
The size and designated uses of local-government special bonds are equally important, including urban-village redevelopment, government inventory purchases and property stabilization. Most of last year’s local-debt replacement has already been completed, so this year the key question is how newly added quotas will be earmarked.
Li Feng calls budget forecasting “a game of guessing numbers.” The direction of the government work report is already set; the only question is whether the final numbers surprise the market. He is more focused on the Private Economy Promotion Law, whose second draft has been reviewed by the National People’s Congress Standing Committee, and from that judges that its introduction has moved from “maybe” to “certain.”

2. The Private Economy Promotion Law Could Mark a Second Step in Reform and Opening-Up

Looking back to 1978, Li Feng stressed that the Third Plenum of the 11th Central Committee first resolved that the country would “focus on economic development,” rather than immediately laying out every concrete policy. The household responsibility system was at one point still regarded as something not to be encouraged or even illegal; institutional change unfolded gradually.
The subsequent Chinese-Foreign Equity Joint Venture Law formally endorsed the introduction of foreign capital for the first time. That led to Shenzhen’s first experiments with paid transfers of land-use rights, factory construction in special economic zones and manufacturing development. Hong Kong, Taiwan, Japanese, European and US capital entered successively, eventually leading through WTO accession, narrower negative lists and permission for wholly foreign-owned enterprises to the 2019 Foreign Investment Law.
Against this backdrop, standalone legislation aimed at “promoting” private enterprise would be a first. Li Feng’s long-cycle view is that 1979–2019 can be seen as “reform led by opening-up.” The next step could be marked by private firms entering infrastructure, communications, telecoms, energy and finance, as well as by the internationalization of Chinese companies—especially private companies.

3. The Symposium Caught the Sentiment Window Created by DeepSeek and Ne Zha

Li Feng had already expected a private-entrepreneurs’ symposium after the Two Sessions to amplify the Private Economy Promotion Law’s impact, and had even guessed that Jack Ma might attend. The actual meeting happened earlier than he expected.
Over the Lunar New Year, DeepSeek raised global attention toward China’s AI capabilities, while Ne Zha climbed charts worldwide. Domestic and international sentiment and confidence recovered, and Li Feng summarized the timing as “the atmosphere had already been built up to this point,” allowing policy to amplify the effect.
Li Xiang asked whether the meeting had been scheduled in advance or arranged at the last minute. Li Feng admitted he could not know the top leadership’s working process, but believed support for private enterprise had long been a signature issue in the decision-making system. The symposium was probably already within the planning, publicity and execution chain; the Lunar New Year phenomena merely changed where it landed.

4. The Real Policy Signal Is Coordination at the Decision-Making Level, Not the Seating Chart

Li Feng sees the biggest difference between the 2025 and 2018 private-enterprise symposia not in which entrepreneurs attended, but in which policymakers appeared together: “This time, 5 Standing Committee members were put together to hold this meeting.” That signals coordination among resource allocation, ideology, the State Council and the central authorities around a common direction.
He compared it with the Sept. 24 financial policy briefing. It is not unusual for the PBOC, CSRC and National Financial Regulatory Administration to appear together; what was different was that departments were no longer merely announcing policies within their own lanes, but taking on risks and executing jointly around a shared objective. He calls this moment “uniting hearts and pooling strength.”
The symposium’s signal therefore lies not in the entrepreneur list, but in the government’s ability to turn single-department initiatives into cross-line action. Confidence among entrepreneurs is only one layer; local officials receiving a clear direction, resources and an execution basis may have the more immediate impact.

5. Those Absent Are Not on a Blacklist; the List Is a Snapshot of the Current Innovation Narrative

Liang Wenfeng of DeepSeek attended but did not speak, while Unitree appeared as a new element and spoke. Ren Zhengfei, Wang Chuanfu, Lei Jun and the “two Mas” covered different generations and industries; Feihe represented a traditional company of considerable economic scale. Li Feng believes the remaining selection was more about coverage “across east, west, north and south, across industries” than about precisely picking individual names.
Li Xiang’s objection is worth preserving: public speculation that “whoever did not attend was being snubbed” itself shows that confidence remains weak—as if being selected by top leadership were the only proof that the leadership had no issue with a company. Li Feng called this “a bit of over-interpretation,” arguing that the list does not necessarily reveal an industry’s or company’s fate.
The relative absence of biopharma and innovative-drug companies, including Hengrui, does not necessarily mean the sector is being neglected. Li Feng noted that innovative drugs went through a “darkest hour” from the second half of 2022 through the end of 2024; there may simply have been no representative with DeepSeek’s or Unitree’s combination of a new direction and international influence.
Education likewise had no representative such as Yu Minhong. But recent State Council policies to stabilize foreign investment and boost consumption have placed culture and education alongside finance, healthcare and telecom services on the opening-up agenda. A list of universities that might be established before the Lunar New Year also included Fuyao University of Science and Technology. Li Feng therefore believes sensitive service sectors once thought after 2021 to be barred from further marketization have at least re-entered a specific opening-up agenda.

6. Local Governments Have Shifted from Guessing Industries to Landing AI Applications

Li Feng observed that the shift did not begin only after the Lunar New Year. At the first major meeting after New Year’s Day, multiple provincial and key-city leaders had already arranged meetings with private companies. Support for private enterprise was therefore not formed only after the holiday; DeepSeek and related events simply turned an existing consensus into a more explicit execution direction.
After the central symposium, Guangdong, Shenzhen and other regions repeatedly met with leading local companies. Every jurisdiction is anxious to cultivate its own “six little dragons.”
Last year, local governments faced a long list of “new quality productive forces”—AI, the low-altitude economy, robots and more—and still had to guess where to place their bets. Recent documents from Shenzhen and elsewhere have converged more clearly on AI combined with B2B and B2C applications, pushing the deployment of real-world use cases and making intelligent robots a priority.

7. Entrepreneurs Are Testing Policy Sincerity by Asking Whether the Tax Bureau Will Come

Li Feng said that when he dines with CEOs of portfolio companies, they broadly acknowledge an improvement in policy and market confidence. But a CEO he met one-on-one in another economically developed region offered a highly micro-level test: “This is definitely a good thing… As for what happens next, I’ll just see whether the tax bureau comes looking for me today.” The CEO had been investigated last year, though the investigation ultimately found no issue.
Li Feng explained that tax inspections were more concentrated before August last year, when fiscal pressure—especially during the first 7 months—was high. Companies will ultimately judge whether macro-level statements are being honored through their daily interactions with enforcement and tax authorities.

8. DeepSeek Proves There Is an Efficiency Window Beyond Scaling Up

Before DeepSeek, OpenAI and other incumbent model developers, including Musk’s team with its newly released Grok 3, were continuing to “scale up” along the scaling law: expanding compute clusters, increasing the amount of text and context that could be input, and sparing no expense in searching for the upper limit of scale.
Li Feng’s limited technical understanding is that quantitative trading at High-Flyer had always required squeezing software and hardware to the limit to improve reaction and trading efficiency. That DNA led DeepSeek to pursue efficiency and software–hardware co-optimization rather than scale alone.
The result was not only substantial room for further convergence in vertical applications, but also some evidence that the integrated software-and-hardware barrier built around CUDA and Nvidia could be bypassed to a degree, expanding the possibilities for domestic compute. Open source then rapidly brought deployment, users and attention. “While everyone else was scrambling for that door, it suddenly opened a window somewhere else.”
China had more than 100 registered large models over half a year ago, and Hangzhou was hardly without model companies. What could not be predicted was which window would be pushed open. The original “few little dragons” of large models now face a choice: continue crowding the door of scale, or search for other exits in the walls and ceiling.

9. Industrial Policy Can Buy Speed, but It Cannot Name the Next DeepSeek

Li Xiang raised two questions. Could local governments’ pursuit of AI and robots repeat the pattern of solar and new-energy vehicles—concentrated resources, rapid overcapacity and fierce involution? And does DeepSeek itself look like a company that could have been “grown” through planned allocation of factors?
Li Feng acknowledged that overcapacity is a cost, but stressed that China’s concentrated-investment model can complete an entire industrial chain in an extremely short time. After the STAR Market encouraged chip companies in 2019, capital and investment promotion did not pile only into chip design; they quickly covered wafer fabrication, packaging and testing, materials, lithography-machine consumables and components, while expanding the total pool of trained technicians.
He explained national industrial investment through a fund portfolio. If a fund invests in 8 AI or robotics companies and 2 or 2.5 ultimately succeed, the other 5.5 may be acquired or fail. Failed projects are the cost; the key is whether the winners are strong enough to support the portfolio as a whole. At the national level, the question is whether an industrial chain emerges; at the provincial and city levels, some jurisdictions will necessarily win and others lose.
Li Feng calls this approach “trading time for space.” He added that “putting in massive force creates miracles” does not mean massive force will definitely create a miracle: “It may not create a miracle, but it can at least create scale. Once there is scale, miracles usually follow.”

10. The “Peripheral Revolution” Explains Why Non-Consensus Innovation Returns to the Mainstream

Li Feng cited the “peripheral revolution” from Ronald Coase’s How China Became Capitalist: as scale and speed develop, innovation grows in peripheral areas that were not designed in advance, eventually being “rolled back into the main axis.” Township enterprises and rural reform are classic examples.
Under this framework, DeepSeek was not the result of industrial policy precisely selecting a winner. It was a breakthrough that emerged from the peripheral route of quantitative-trading DNA and efficiency after large-scale attention, resources and companies had accumulated. The government can fill in the conditions, but it also needs to recognize and give space to non-consensus paths once they appear.

11. Homestead Reform Is Connecting Urbanizing Rural Residents to Property Income

The most discussed headline from the recent rural homestead document was that urban household registrations cannot buy rural homesteads. Li Feng believes that captures only one side: the document is simultaneously addressing rights confirmation, constrained circulation and the prevention of boundary-crossing transactions.
The document permits a degree of transfer across villages, subject to approval by the village collective, because individual use rights remain embedded in collective planning. It also restricts purchases by urban residents and prevents parties from effectively crossing the boundary through ultra-long leases and similar arrangements.
This connects with the Third Plenum’s proposal to provide urban public services based on permanent residents rather than registered residents. Once rural residents settle in cities, their existing farmland and homesteads need a new use; otherwise their income remains dominated by wages, leaving them without the property income that urban households can earn by renting out non-primary residences.
Li Feng once joked that accumulating large amounts of rural homestead land in advance could create a special arbitrage opportunity over the long term. The new document is opening one side of the gate again for rights confirmation and circulation, while the other side is aimed precisely at preventing capital hoarding, illegal transfers and maturity arbitrage.

12. The Prerequisite for Renewed IPO Expansion Is a Capital Market That Can Finance Again

Li Feng had initially expected IPO approvals to increase after the Two Sessions. The A-share market’s average daily turnover and liquidity at the start of the year had already stabilized enough to provide a basis; the capital market must first recover its stabilization and refinancing functions before it can resume a more normal role in IPO financing.
Over the past year-plus, the CSRC has not explicitly said that consumer companies or companies meeting the STAR Market’s fifth listing standard would be suspended from listing. These two categories look more like listing templates under the registration-based system.
In February’s PMI, production-related indicators recovered reasonably well. Services remained around 50, though weaker month on month than in January, possibly reflecting post-holiday effects. Li Feng therefore defines consumption and services as the “important” issues supporting the year’s economic scale, while chips, AI and other competitiveness-related sectors are “urgent” issues that must be addressed quickly.

13. A-Shares Are Moving from “Urgent” Toward the Intersection; Hong Kong Is Adding Technology to “Important”

Chips are urgent because of the “choke points”; AI and large models are urgent because they face future competition. Consumption is important because it supports economic scale. New-energy vehicles and smartphones combine technology and consumption, making them “urgent and important”—which also explains Wang Chuanfu’s and Lei Jun’s places at the symposium.
Based on context, the company mentioned on the program was Insta360. Li Feng sees it as a more complete intersection: software algorithms, sensors and cameras give it technological attributes; its products target consumers; and more than half its revenue comes from overseas. It is therefore “urgent, important and international.”
Mixue is an “important” company with significant scale, profitability and consumer exposure, but it previously could not list in A-shares and ultimately went to Hong Kong. Li Feng expects A-shares gradually to move beyond an emphasis on urgent sectors and include “urgent and important” companies; Hong Kong is moving in the opposite direction, from consumption and economic scale toward “important plus a little urgent.”
The STAR Market’s fifth listing standard remains “the most urgent within the urgent.” As for the precise reopening date, Li Feng initially guessed after the Two Sessions. But the private-enterprise symposium was brought forward by the Lunar New Year mood, and the IPO timetable could likewise be pushed along by the prevailing momentum.

14. Musk’s Peak Is Now Undermining Tesla’s Execution

Discussing the idea that “things get better when they are bad, then turn bad once they get good,” Li Feng framed it as the entrepreneur cycle: troughs encourage reflection, learning and adjustment, while peaks make people more likely to believe they possess abilities beyond their actual limits.
Around 2018, most investment banks and analysts still worried that Tesla’s cash flow would not last until profitability. That was Musk’s trough. The past 1.5 years—especially after his all-in support for Trump and Trump’s election victory—have been a peak of combined wealth, corporate power and political influence.
FSD was approved to enter China 2 weeks before the recording, but its initial feedback was “very average,” with signs that it did not adapt well to Chinese traffic conditions and rules, possibly because of insufficient data. Against autonomous-driving companies that had already built up local experience, Tesla’s competitiveness has also come into question.
Before Grok 3 launched, Musk described it as surpassing OpenAI and DeepSeek on every dimension, but market feedback did not match that claim. Li Xiang believes Musk sees himself as surpassing every incumbent leader regardless of the field he enters. The two also discussed the possibility that he is trying to turn Tesla from a pure automaker into something else. Li Feng believes Musk’s reputation in the US has definitely deteriorated, but the program offered no polling data or conclusion on whether Trump is also declining.

15. Ukraine Was First Excluded from the Talks, Then Became the Center of the White House Clash

When the US and Russia initially made direct contact and discussed a Russia–Ukraine ceasefire, neither Ukraine nor Europe could participate. Li Feng called Ukraine’s position “quite pitiful” and compared it with the Paris Peace Conference: China, despite being on the winning side, could not influence the disposition of Shandong; Germany’s rights were transferred to Japan, and Gu Weijun could only lobby from outside, eventually helping trigger the May Fourth Movement.
After the public White House confrontation, two explanations emerged. Zelensky may have deliberately manufactured the conflict; Trump may also have used it to show that a ceasefire failed because the other side was uncooperative, allowing him to escape his earlier commitment. Li Feng chose neither explanation, arguing that a situation escalating into a public argument may have surprised both sides to some degree.
A scenario discussed on the program last year held that after Trump’s victory, Zelensky might go into exile or be eliminated, followed by a government that was neither pro-Russian nor pro-American—and perhaps relatively pro-China—taking part in reconstruction. The current situation appears to be moving slightly in that direction, but minerals, US–Europe relations and other new variables leave the outcome “undecided.”

16. Trump Breaks Alliances into Transactions, Giving China a Brief Opening

Li Feng believes the US–Europe fracture is appearing simultaneously on two fronts. On security, there are disputes over NATO, aid to Ukraine and a ceasefire; economically, the US is also applying tariff pressure to Europe, Canada, Mexico and China. The overlap of military and trade tensions gives China “a little bit of unexpected strategic space.”
He cautiously speculated further that actors around China caught in the US–China crossfire, including the Philippines, may also reconsider “who will be the next Zelensky or Ukraine.” This is speculation, not a firm judgment, but such actors may reassess the reliability of external support as a result.
Li Feng distinguishes the underlying logic of the two US administrations. The Democratic Party is more like “make China weaker and America correspondingly better”; Trump treats every diplomatic matter as a transaction that can be weighed separately, requiring “the balance in every transaction to be on America’s side.” Whether military aid continues will also depend on whether Europe can benefit the US elsewhere, through energy, trade surpluses and other accounts.
Britain’s actions can be explained by “offshore balancing.” It has left the EU, is a former global power and does not sit on the European continent, so historically it has tended to preserve mutual checks within Europe. It was therefore unsurprising that Zelensky went to Britain after leaving the US, with Britain convening a European meeting. But even if Europe says it may send troops, it still wants a US security guarantee—and the US has not made that commitment.

17. Capital Flows Move Before the Narrative; Domestic Recovery Remains Only a Partial Signal

Li Xiang noted that German equities performed well over the past month despite no clear improvement in the German economy. He is unsure whether this is merely a rebound from oversold conditions or whether markets are betting on a Russia–Ukraine ceasefire, easing energy prices and supply constraints, and a new government’s ability to address existing problems.
India’s stock market has suffered a long, continuous decline since the end of last year. Outflows reflect both its earlier excessive gains and the fact that Asian emerging-market allocations had previously shifted from China and Hong Kong to India; some of that money is now returning to Hong Kong. US markets also moved lower amid the volatility of the past month, with Nvidia’s exposure to DeepSeek and Tesla’s exposure to Chinese new-energy vehicle competition potentially contributing factors.
If Trump treats a ceasefire as a business deal, the ideal outcome would be to deliver on the Russia–Ukraine ceasefire promise while securing Ukrainian minerals. France, Germany and Britain, however, are also making their own claims based on their past assistance. Li Feng concluded that international politics had given everyone a lesson in realism: “A weak country definitely has no room to maneuver.” In the end, the answer remains “a strong country and prosperous people.”
Domestic micro-level activity has improved somewhat. Li Xiang said he had gone out for social or business engagements on 5 of 7 evenings that week, and related business-consumption venues were slightly better than before the Lunar New Year. But some investors Li Feng spoke with were still making no new investments, devoting all their energy to managing existing projects and exits. The government side has clearly begun moving; the primary market’s inertia has not yet fully reversed.

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