Program and guest
Bloomberg Television’s The China Show (approximately 1 hour, 31 minutes and 58 seconds) featured Mattie Zhao, BofA Global Research’s co-head of China equities and head of iPAC basic materials. This article covers Zhao’s interview segment (approximately 51:32–59:01); it does not cover the program’s other segments.
Key points
(The following paraphrases the guest’s views; timestamp links lead to the corresponding points in the original video.)
- China AI capital spending forecast: Annual spending rises from 110 billion dollars last year to about 350 billion dollars in 2030, while annual additions to data-center capacity rise from about 13 gigawatts to about 56 gigawatts. The forecast rests on assumptions about data-center construction and funding availability. 51:57
- Funding mix: Internet companies are expected to contribute 60% to 65%, the government about 25%, and telecom companies a low-single-digit percentage. Precisely because funding availability is the key constraint, capital spending will grow more slowly than data-center capacity. 52:33
- China’s advantages lie in key materials and costs: It accounts for about 50% of refined copper, about 70% of rare earths, and about 70% of key materials for optical lasers. Its power grid is younger (about 20 years old versus more than 40 years in the US and Europe), electricity is 40% to 60% cheaper, and its integrated industrial base enables faster capacity ramp-ups. 53:08
- Copper company valuations have fallen sharply: Chinese copper companies trade at about 8 times earnings, compared with about 20 times for global copper companies and 14 times for Chinese peers at the start of the year. Copper foil companies traded at about 20 to 30 times earnings six months ago and now mostly trade at low- to mid-double-digit multiples. Supply of copper foil, glass and copper remains tight, so opportunities remain on a horizon of more than one year. 57:11
Background and notes
The subtitles cover 0:00–91:54 (full duration: 1:31:58). This article covers Zhao’s interview segment (approximately 51:32–59:01); it does not cover other segments, including the Foxconn Chiang segment and the HSBC foreign exchange segment. The views and timestamps are paraphrased from the original subtitles; timestamps mark the beginning of the corresponding passages. The guest’s name is Mattie Zhao, as given in the program description and subtitle introduction.