Future Predictions on Inflation and Oil

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You can social media your thing, generate images or videos of your thing, make decks or presentations to show your thing. Whatever needs to be done for your thing, Canva can make it an even better and bigger thing. Canva, the thing that makes anything We have to recognise how enormous a trend this is. The South Korean government, along with Samsung Electronics and SK Henix, have allocated five hundred twenty billion US dollars to keep South Korea in the AI race, can we see any kind of a pledge like that in Europe Nothing so far comes close to that P Welcome to China Decode. I'm Alice Han. And I'm James King. In today's episode of China Decode, we're discussing Big money moves in the AI arms race China's latest strategy to increase its global influence and the Californication of Chinese diets That's all coming up, but first, let's do a quick check in with how the markets are starting the week in China On Monday, markets finished mostly higher after sentiment improved on easing geopolitical tensions and renewed risk appetite The Shanghai composite was up one point one six percent. The CSI three hundred rose one point two one percent And the Shenen component added zero point one nine percent Financial stocks have led the way with Industrial and Commercial Bank of China up zero point nine eight percent and the agricultural Bank of China up zero point eight one percent. All right, let's get into it A lot of news this week in the AI world, starting with Apple who raised prices on the MacBook and the iPad in some cases by around twenty percent AI is to blame but not because of new features. it's because of the growing chip shortage as chip makers prioritize orders for companies like NVIidia Now Apple is reportedly lobbying the Trump administration for permission to buy chips from blacklisted Chinese DRAM company, CXMT Meanwhile, Chinese AI company DeepSek has just announced plans to double its headcount in some departments and is preparing to take outside investment for the first time ever Theream's a lot of exciting things happening in the world of AI, not just in the US, clearly in China too. And the first one really is this Apple story. You know, not only will consumers have to confront price rises globally of Apple products But now Apple is really stretched in terms of capacity for memory as well as chips. And this speaks to a broader supply shortage that we're seeing It explains why DRM prices from the Korean companies basically doubled in the last few months. And this is, I think, a perfect entry point for some of these Chinese players like CXMT which is China's big chip maker in the space to enter and potentially catater to of the world. But I think the bigger political question is whether or not the Trump administration, you know is going to ultimately clear CXMT for sales to Apple or to American companies because right now, as you know, it's technically on a list banned by the Pentagon because it's blacklisted as a company that's aiding the People's Liberation Army of China Now this is not a ban that creates legal penalties for an Apple or a company trying to buy six empty chips. does carry a lot of reputational risk. So the big question is A, will there be a change of tune from the Trump administration? and B, will Apple try to risk it in order to get more DRAM? That's a great question, Alice. Just to take one step back, I think what we're in now is Ramageddon. And obviously, this is because as you've described, the frenzy for AI causing this chip shortage and the shortage focuses on memory chips hence the RAM in RAMageddon because RAM stands for random access memory. And the reason that AI is causing the shortage is because data centers that are needed to train the large language models use a lot of these memory chips. and so That's the situation that we're in. I think it'll take a long time to build new capacity here because it takes a long time to build new chip factories. And that's what needs to happen to increase the supply of these memory chips to ease this Ramageddon situation that we've got at the moment. We have to recognize how enormous a trend this is. And I think that was thrown into sharp relief today by the incredible announcement from South Korea. The South Korean government, along with Samsung Electronics and SK Heinix, have allocated five hundred twenty billion US dollars. to to keep South Korea in the AI race. This money is going to be spent in lots of different areas, including building new chip factories, but also building AI data centers, robotics and all of that. So This just shows how huge the trend that we are trying to describe is I don't think this is the biggest industrial policy move in history. It's not as big as the Belt and Road Initiative by China, and it's not as big as the American New deeal as a percentage of GDP, that is, but five hundred twenty billion US dollars being spent by a single country and a couple of companies just shows how crucially important the AI race is and also being able to get enough memory chips to power the large language models that train AI really is. So to come to CXMT, is the US going to approve Apple to use chips that are made by CXMT in China or not It's a really big call for the White House, isn't it? Because all along, the US has been saying we want to deny China a leg up in the tech race And allowing America's most impressive tech company, or certainly one of them perhaps, after NVIDia, perhaps, level pegging with NVIidia, allowing one of America's most impressive tech companies to buy Chinese chips made by this CXMT company, which is a very proficient maker of memory chips and does so at a pretty low price will be a huge leg up to China and therefore it will be countering America's broad strategy of trying to keep Chinese tech contained, trying to keep its advance contained. I really wouldn't like to call it to be honest. It's so hard to call this White House. They seem to flip flop on these policies all the time. So all I think we can say is that the pressure is going to be intense and that pressure will grow because I said at the beginning, this is a structural trend. The world is not going to be able to supply masses and masses more memory chips in short order. It's going to take a long time the factories that are going to have to make these memory chips to ease the supply bottleneck. So, you know, the pressure is only going to intensify And do you think that withith the midterms and potentially a blue wave or a democratic sweep through the House at the very least It'll make it even harder for CXMT in the same way that say four years ago in twenty twenty two. Apple said that it wanted to buy from Chinese stp maker YMTC that was I wouldn't say I'm legally blocked, but it still was not allowed because it was blacklisted by the U. S. administration and Apple didn't move further on it. There seem to be parallels between YMTC back in twenty twenty two and CXMT today But am I wrong to overindex on the congressional part of things Because I do think that if you take out Trump, the congressional committees and House of representatives tend to have a very anti China view And this extends to the technology race where you saw obviously the passing of the leegislative Build a Match Act, which has affected ASML. But am I right to be thinking about the midterterms is really another key data point in terms of worsening relations between US and China and affecting technology. I think you're absolutely right, Alice, there's no question that in general, Congress is more, as you put it, anti China or, you know they're more competitive when it comes to the U.S China tech race. you know the mood is definitely that this is a crucial battle that America needs to win and therefore they need to disadvantage China whenever they can. However having said that We need to look at the economic effects of this as well. And you've just mentioned the way in which the various different Apple products are rising in price So the MacBook air jumped in price from one thousand ninety nine US dollars to one thousand two hundred and ninety nine US dollars. The entry level iPad air also rose by a similar magnitude. And so what we've got here is clear inflationary pressure moving through not just Apple products, but the whole gamut of electronic products. When you add that to the inflationary pressures that we're already getting in terms of oil prices from the Middle East and the fact that US inflation is is rising and is at fairly high levels, a trend that we see across Europe, by the way, then the question is If inflation in the US really starts to bite in coming months, then will Congress remain so adamant? on its anti China policy or on its policies to disadvantage China in the tech race. Or will they think, you know what, guys? we need to just let in the cheapest products as quickly as possible to keep inflation under control. So what we've got, I think, is a dynamic picture. I don't really think we can call it I do think that the will of Congress will start being fairly in favor of containing China, but thenation inflationary pressures, if they really begin to take off, could undermine that stance. Yeah, it definitely undermines the affordability issue or set of concerns that the Trump administration clearly was worried about even before Iran hit people's baskets and gas pump prices I want to take this back to Apple itself and how it fas in this real, I would say pecking order for chips. This is a competition for chips and a time where capacity that you've referenced, James is already constrained And I almost feel that the right way to think about it is that the hyperscalers that are creating the frontier models, you know, your Clods and your chat GPs will get first preference. You know, we've got seven hundred north of seven hundred billion dollars of CapEx going into data center rollouts throughout America It seems to be basically, I would say, a frenzy to get as much um as many trips as possible. And because they can pay for it, the real, I think, preferences for the you know, SK high NXes and Samsunges of the world to be selling to these hyperscalers as opposed to Apple And meanwhile, prices rise across the board. I think the markets have reflected this somehow in the sense that Apple stock It has already fallen more than six percent. on the news of the price hikes last week and that's a single that's a steeper single day drop since Liberation Day tariffs last April. that Trump launched I almost feel as though the market is expecting that Apple is going to have to eat the cost and the final bearer of the cost will have to be everyday consumers in China in America globally Because we're going to have to deal with more expensive electronic goods because of the shortage of chips. Yeah, completely. I mean, I think we're in this for a good long time, actually. The DRAM prices surged nearly one hundred percent in the first quarter of this year. There's another sixty percent jump expected this quarter This is not going to go away. you know, we are in a structural shortage of DRAM and RAM chips So Ramageddon, I think, is going to last for quite some time. We're just at the beginning of the trend. We don't know all of the permutations, but I would say an inflationary spike which broadens through various tech products is highly likely And you know we've already seen the inflation that's coming from oil prices. So we could be in for a rough few months ahead Very, very interesting. So quickly on deep sea, you know, that's been in the news again And in general, China has been in the news. There's the new XAI model that says that it is as good as mythos This is the new model that's come out of China in the cybersecurity space Deepsekers just said that it wants to double its workforce and that it's now open to external Investors, it's close apparently to finalizing a seven point four billion dollars funding round largely driven by Tenscent CATL, the battery maker as well as China's state backed National AI Investment Fund, which is a consortium of both private and public companies in the technology space So, you know, it's clear to me that Dep Sk is still a darling, even although we've seen in the last year or so that sometimes Dense comes ahead, sometimes Jipool comes ahead You know, it's still, I think, very unclear who is going to be the leader in the AI model race But it seems clear that Dep Sak isn't off the list. There's a lot of what I'm hearing from my China friends is that there's a lot of enthusiasm. about getting involved in this round and still a lot of positivity about Deep Sek But I thought this was interesting because of one of two things. One is that You know, it's these models in China are super competitive and I've been hearing that they're Use cases and adoption are rising outside of China quite exponentially. And the number two issue that I want to raise is the fact that these funding rounds, and this is just seven point four billion dollars are tiny compared to the amounts that are being raised by, you know anthropics and open AIs in America. Again, I want to bring this home because you see this both in the valuation of Chinese tech companies publicly listed But you also see this in the size of the funding grounds is that they tend to be much smaller. I mean, I would say maybe even less than half of what you see in Silicon Valley which I think is interesting. And I haven't yet figured out why the ticket sizes are much smaller suuffice to say that my friends who are knowledgeable in the investment space just say that this is a normal given Profitability, the scale and the capital market depths in mainland China compared to Silicon Valley. I think those are really interesting points. I just think that this deep seek move is yet again evidence of how vibrant the whole large language model AI sector is in China And we see several companies, Chinese companies battling for primacy. there's the Alibaba Kuen, there's Dupu that you've already mentioned, and there are several others. We don't know which one is going to come out on top We don't know how many leaders the market can take, you know, That's another thing. Are we looking at a mature market where there are one or two big providers at some point in the future? or are we looking at a cluster of different LLMs that do different things? My sense of it is we may well be looking at a small number And so, you know, time is of the essence. Maybe that's the reason one of the reasons why Deep Sek is keen to raise money and to kick on But anyway, I just think the battle between U.S and China on AI is as vibrant and competitive as ever. And now we've seen, as I mentioned at the outset, South Korea The South Korean government and two big South Korean companies ready to put up five hundred twenty billion US dollars to up their challenge in the race to you know, this is going to get bloody. The margins are going to vanish or turn negative in my view. It's going to be highly competitive, highly bruising, I would say very interesting. Okay we'll be back with more after a quick break. stay with us. Support for the show comes from super humuman. Be honest, how many tabs do you have open right now? My computer and tabs are a chocolate mess. 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LinkedIn has a word for that, Bull spend Reach the right buyers from LinkedIn ads and invest in what looks good to your CFO According to the twenty six Dream Data benchmark R report, LinkedIn ads generated the highest ROas of all major ad networks. It's one hundred twenty one percent. You can target by company, industry, job title and more. It's time to cut the bull spend. Advertise on LinkedIn, the network that works for you. Spend two hundred fifty dollars in your first campaign on LinkedIn ads and get a two hundred fifty dollars credit for the next one Just go to LinkedIn. com slash Scott. That's LinkedIn d. com slash Scott Terms and conditions apply Welcome back. Chinese Cmerce Minister Wang Wint Tol is in Brussels early this week for a meeting with EU Trade Commissioner Mara Sevkovich, which comes as fears of an EU China trade war continue to bubble up and European leaders express more concern for China's trade surplus. The effort to maintain good relations with the EU comes in a year where Chinese President Xi Jinping has already hosted more than a dozen world leaders and made particular inroads with so called middle power countries especially as an alternative to an increasingly volatile US So James, we still haven't of this recording figured out what is being negotiated or announced between the Chinese and European counterparts in Brussels this week. Two main points that I would flag that I think are worth considering. Number one is the fact that You know, the EU is in a really dire position China's goods trade surplus with the EU hit three hundred sixty billion dollars in twenty twenty five. percent increase on twenty twenty four And it's very likely, In fact, I think it's inevitable that it's going to expand in twenty twenty six based on the first half of twenty twenty six already. And so we're up for probably a record T surplus in twenty twenty six, even though last year was already a record at one point one nine trillion dollars in terms of China's. trade surplus with the EU So there's that hanging like a sort of Damocluse over the relationship. And the second point that I would raise is that there has been some more wiggle room. in the sense that you're a has entertained conversations with Chinese counterparts as a way to balance against what it sees as a as a non commommittal volatile Washington administration and especially because there was No love lost over the Iran issue and the ensuing energy crisis that are produced particularly for the Brits and the Europeans. And the reason I raiseed this issue is that I was pleasantly surprised that they had agreed finally in January to price floors, export price floors for Chinese EVs going into Europe And that would be a way to obviate the tariffs, close to forty percent that have been put on Chinese EV's by Brussels. But now it seems that there's a threat to something that hasn't yet been targeted, which is the hybrid market. So PHEVs hybrid pluggin cuse Brussels potentially entertaining tariffs on hybrid vehicles because of just the influx, you know, the surge in Chinese hybrid exports to Europe. So it seems like on the one hand Europe is screwed economically because of an ever imbalanced relationship. At the same time, it wants to continue to to talk to China. to use China to balance against America to try to fight in a way, maybe this is uncharitable for relevance by engaging with the Chinese. No, I'm afraid it isn't too uncharitable. Alice, I think you put your finger on it. My sense of this is potentially even more stark. You know the trade numbers that you mentioned shocking as they are The fact that this year, the trade deficit that the eurozone has with China will reach almost four hundred billion euro Although those numbers are shocking, they don't even describe the importance of what's going on here. What is happening here is that this inflow of Chinese imports most of them high tech these days and priced at levels that European companies simply can't compete with is wiping out Europe's industrial base and I say that ery bluntly, I believe it's true. I believe that within five or maybe ten years, Europe's industrial base will have been wiped out by Chinese competition unless there is a significant move either in terms of self restraint by the Chinese that you've already alluded to or in terms of major trade barriers erected by Europe My current sense is that Europe at the moment simply lacks the unity for a for you know genuine trade barriers with China. And that's because You know, you can have these European representatives who go to China, such as we have right now, but they have their hands tied behind their backs Because several member countries of the EU, often Spain, which is benefiting from an inflow of Chinese investment, or countries like Hungary, which have long standing warm relations with China, are not prepared to back very strong European trade barriers against China. which is of course the most powerful country in the eurozone flows one way and then the other. We're never very clear which way the wind is blowing in Berlin And so I think that this visit will be the same as all the other visits. The Europeans will talk up a storm, but deliver very little in concrete terms in terms of genuine barriers or genuine protective measures to protect European industry against What I believe is extinction or close to the extinction of Europe's industrial base. And the reason I say that, I mean, this is the topic that I spend most of my time researching. The reason I say that is because I see sector by sector how cheap and how good the Chinese products are in terms of their technology content. And then I compare that to what the Europeans are able to do And the gap is huge. I don't want to undersell the Europeans too much There is news today that The European Commission will put a small new tariff on small parcels that come into Europe It's going to put three euros onto packages that come from China if they have a value of over one hundred fifty euro. So this is aimed to reverse or to stop what is being called by the European Commission desertification of Europe's high streets. Basically, a whole load of shops Europe in Europe's high streets are going to the wall or going out of business because people can just order online super cheap products that come from China. And so this additional charge of three euros is intended to stop that. The number of low value parcels coming into Europe It has more than quadrupled. In twenty twenty two, it was valued at one point three billion euro and this sorry last year, it was valued at five point nine billion do so virtually six billion euro. So you can see there's been a huge increase in this type of small package. It's funny that you raised this, James. that the Europeans have finally gotten ono the de minim requirements that the Trump administration, if you recall, put into place last year And there's just a nicade piece that came out showing how Chinese merchants on Temu and Sin You know, these are the ones doing these low cost goods. have actually found loopholes through logistic networks and through false import declarations in order to even avoid the de mininimous requirements in the U.S, which are I think around eight hundred US dollars. Anything above eight hundred dollars needs to be subject to tariffs U so like I look at that bit of regulation that you just t to James and I go, well, not only is that too little too late, You know, will, as we know, is often the case with Chinese merchants, will they find loopholes because they Pre prettyty canny and smart, and I think Id probably take that scenario, which is that they will find loopholes to avoid even these requirements Uh but I want to brring it home to One sector in particular, because we've talked about chips just now. We discussed ASML last week And we mentioned that Washington was putting more pressure on the Dutch chipmaker. This is a bit of a left field question, but what I've learned from the South Korea example And we see this reflected in per capita GDP now overtaking the UK The market cap of Taiwan and South Korea both overtaken the market cap of the London Stock Exchange, primarily driven by TSMC Samsung SK HeynX What we learned from the East Asian tiger example is that Maybe you shouldn't try to compete with China on autos because China will always be able to price compete you now that it has the scale and maybe you should be competing on the more value added industries in chip making, right? Chip equipment, chip making. and here ASML really is the leader and prime maybe even the sole example But I try to figure out why in particular Europe, the Germans The French haven't really gone into that and maybe you don't have a view, but it seems puzzling to me at a time where They're still desperately trying to compete with the Chinese on autos, increasingly on chemicals where China is becoming even more competitive. The whereas they should really be you shifting their attention to defense tech. to chip making to some of the more higher value added industrial technological products. It seems a little bit of a I think fruitless attempt. Some of the European analysts are recommending a quote unquote reverse dung effect and if you recall in the eighties, Dg Xop Ping, who was the leader at the time was mandating foreign companies to do tech transfers in exchange for access to the Chinese market. and now the Europeans are saying the same to Chinese companies like CATL and BYD We have seen some increase in greenfield investment in Europe in the last year or so You know, I'm hearing from the Chinese is that they don't want to have all their eggs in one basket and export their IP and tech to Europe. They want to have some of the more critical IP staying at home in China Yeah, this is such a big topic, Alice. We could do a whole episode on this. I think you're absolutely right. You know, what we have at the moment is the result of, I'm afraid to say, a couple of decades of compompllacency in Europe, complacency at many different levels. I'm not just talking about the eurozone. We definitely have complacency here in the UK, especially with regard to industrial policy Look at what's just happened in South Korea. five hundred twenty billion US dollars being pledged to go into the AI race. Can we see any kind of a pledge like that in Europe Nothing so far comes close to that. Now there are all kinds of reasons for this. It would really take a long time to go into them. But where is European industrial policy? Where is the clarity of European bureaucrats in the eurozone in the national countries saying we need to prioritize this sector or that sector We need to recognize that ular sector is all you know the game is already over, China's already won. So let's not put resources into that There is very little clarity at the moment. I think Europe has just woken up to the fact that China is a peer competitor in technology with the US and has left Europe far, far behind This is in spite of the fact that many of us have been writing this For many years, why has Europe been so slow to wake up to this crisis? I really don't know. But that's the situation we have at the moment. just to answer your question on reverse dg, in other words gettinget Chinese investors to invest in factories in Europe And as part of the price for the entrance into the eurozone market, having to form a joint venture to maybe hand over technology to a joint venture partner I completely agree with your take. I think although Europe may want this and I don't think it's a bad objective for Europe to have. I think it's a good objective, there are so many complications with it right now. One of which is you'll see a flood of Chinese investment going into countries like Morocco. Morocco has a trade agreement with Europe. So they can manufacture in Morocco and export into Europe without extra duties So why why wouldn't they do that and keep their technology rather than invest in Europe with a joint venture partner under conditions that force them to hand over technology? So you know we're into a very complicated period in EU China relations At the moment, I would say the cards are mostly with China And this is largely because European member states do not have unity over what trade policy they should adopt with regard to China. This is a structural European problem. And for as long as there's no unity, there will be no clear policies. Okay, let's take one last quick break and stay with us. Support for the show comes from sofi. If you're a parent helping your child navigate college, you know just how fast the costs can pile up between tuition, housing, textbooks and everyday living expenses, funding higher education is a major financial commitment. That's where today's sponsor, Sfi comes in. 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There's a new sign that the middle class in China is growing and changing The economist reports that there's a quote unquote, Californication of food happening in this segment of the population I've been shocked and I mean, this is completely an observational statement as opposed to being backed by data. But the amount of overweight people that I see in China you know, in the last couple of years compared to a decade ago And you know you could look at it in terms of GDP outcomes, you could look at it in terms of, you know access to food, you could look at it in terms of people's work habits and sedentary lifestyles But it is interesting that as we've seen the prevalence of obesity rise We're also seeing this pivot towards organic food, towards eating better, knowing where your food comes from. I've never, you know, it really has happened COVID. I've never ever been in a Chinese supermarket prior to twenty twenty where I've seen, you know, and these are not necessarily the best high grade you know, Beijing, Shanghai supermuggetets, they're pretty run of the mill, but you will get organic fruits, you know, they're packaged really nicely as you know, people really care about how their fruits and food produs look But people are getting educated about Proidance of food the importance of organic And you see a lot of these live streaming organic farmers in China who are on quite sure, for instance, you know, live streaming about their produce They sell direct to the consumers via the platform. You have this real dichy dichotomy between a population that is increasingly obese Although not to the level of the US is, I think it's around half in terms of the share of population relative to the US, which is around forty percent But at the same time, you're seeing a real supply side and a demand side push for organic s Yeah. I mean the Chinese middle class at five hundred million people, obviously, if those people wanting to eat healthier and to prioritize their health, as you said, then this theme of the californication of the Chinese food market is going to Run and run and run. And already, I'm absolutely amazed by some of the numbers that we're seeing emerge, particularly in terms of the amount of money that some people are willing to pay for premium products in this regard. There's a caviar company in China and of course, China is these days the world's leading producer of caviar It's making organic cavar. It's called Kaluga Queen. And it's supplying Michelin star restaurants all over the world. And the caveiat prices from companies such as this range from about three thousand to nine thousand euro or three thousand one hundred and fifty US dollars to nine thousand four hundred fifty US dollars per kilogram So that's an An enormous amount of money, it seems to me, but there's a ready market for that in China. goingo even more extreme. We've got something called the caterpillar fungus. Now this is not on everybody's dinner plate every day, but these are hand foraged From the Qinghai Tibetan pllateau. I'm sure you've heard of this or you've seen these being sold in markets in China. They're just little funguses. they look a bit like cucumbers, but very small. I've actually seen them before. I've tried them in Junan. Have you I've never tried them. What are they like? I mean I had them in a big mushroom hot pot in Junan in comoming and the texture was I couldn't remember the taste, but the texture was really interesting. If ever if anyone's a mushroom Enhusiasts, you should definitely go that apparently half of the world's Mushroom breeds Fr Runan, just this province in southern China. Well, Alice, you were having a very expensive meal there if they were genuine because wild premium Chinese caterpillar fungus sells from any anywhere from twenty thousand US dollars to over one hundred ten thousand US dollars per kilogram So yeah, I mean, it's just incredible. rem I remember once meeting some guys who go foraging for these fungi when I was in China as a journalist. And you know they would spend days and weeks camping on the Tibetan pllateau trying to find these Fairly small fungi, aren't they? I mean, they're not very big, I mean, they're size of your thumb maybe. So you know, what we're seeing at the moment is this trend of middle class Chinese becoming more health conscious As you say, partly in order to avoid what they're seeing in terms of the large increasing number of obese people in China, but you know just to live healthy lifestyles. And then at the top end of this trend to eat healthy, we're seeing incredible Premium prices for luxury products And u, you know, given the fact We're still at the beginning of the Chinese organic trend. I reckon that we're going to see higher prices and more interest in buying the very luxury products as time goes on. We've got some numbers saying that Chinese sales of organic food were sixteen point sevencent billion US dollars in twenty twenty four. That was up about nineteen percent from twenty twenty three just as a point of comparison The US organic sales in twenty twenty four were seventy one point six billion US dollars Obviously, we can see that the US market is still much bigger. But as we mentioned at the top, five hundred million Chinese are now in the middle class If these guys really take this trend to their heart We're going see Chinese organic food sales go in one direction only, I'd say I'm really bullish on the organic food market relative to the luxury bag market or luxury goods market because my spidey sense from the culture is that people would rather eat well at this point. I feel likes we've had a bit of a pivot in the cultural guys where people want to live well, you know, Be well eat well as opposed to buy expensive foreign flashy, you know logo goods U And so as a result, you know We have now China is the third largest organic product consumption market in the world. I think it's not Unrealistic that that might end up being the, you know, the biggest just given the size of the population, especially the middle class And we also have a lot of supply side shifts that are supporting it. So for instance, there's a Norwegian Nordic aqua company that does aquaculture of fish, including salmon in land based tanks in Zojiang Yunan, which we just mentioned, which is really has, you know, the amazing I think topography and geography to support agriculture is becoming a blueberry and avocado hub You now have these you know fresh hippo Alibaba platforms that just create organic food supply chains that go direct to consumer. In the market, the organic farming area itself in twenty twenty four is doubled U from a decade before. So it used to be less than zero point four percent of the country's total film and now it's zero point seven percent. That's still not a huge size and the scheme of things, I think there's more room to grow. but it certainly points to the fact that I think on the supply and demand side We're seeing a lot of positive trends supporting the organic food industry in China And I think this is just the beginning. There's the there's a forecast that by twenty twenty eight, it'll reach about thirty one billion US dollars doubling from twenty twenty two levels. So I'm pretty optimistic about this And I think that Beyond China, this has big implications. So I was just in Florida Whereas hearing because of the greening of oranges in Florida, they're importing a lot of oranges from China. And I have this theory that as the agricultural sector gets more developed and the quality of produce gets higher we'll start to see China being being an agricultural power. So another example that I think is super interesting is I was actually in Piiedmont a couple two months ago with a friend. And that's an area that's known for growing some of the kiwis and supply to Italy. But they've been competed out by Chinese kiwis that are much cheaper and more plentiful And this is also happening in the mushroom market. I was in Junan two years ago And there's an Italian guy there that says the majority of the dried porcini Sachets and dried portcini mushrooms come from Yunan and come from China. So I think we're in the first innings of China becoming a really interesting agricultural power. All right, James, you know what time it is? It's prediction time As you peer into the future this week, what do you see? I'm going back to this issue of inflation. I think that some of the issues that we were mentioning at the top