Fund manager George Efstathopoulos of Fidelity International stated that the recent rise in the Chinese stock market this year is different from the past, and the emergence of Chinese AI and DeepSeek may be the most important factor, as it not only reflects improvement in fundamentals, but also provides new opportunities. Looking back at 2024, Chinese stock market returns outperformed most markets outside of the United States. However, investors were not impressed, as the Chinese stock market experienced volatility last year, making it one of the most volatile markets. In early 2024, the Chinese stock market experienced a deep adjustment, followed by two strong short-term rebounds in the first half of the year and after new policies were implemented in September, mostly driven by market expectations. From 2025 to date, the Chinese stock market has performed well, causing investors to consider whether this round of increase is different from the past, with George Efstathopoulos leaning towards agreeing with this view. Since the small fiscal stimulus measures introduced in the fourth quarter of 2024, economic data has improved. While the process of policy improvement is gradual and uneven, there has been a clear shift in monetary and fiscal policy stance in mainland China. This includes a significant boost from consumer subsidies, indicating to policymakers and the market the important impact of fiscal stimulus measures on consumers. More supportive policies are needed to sustain this momentum, and mainland China has also indicated that more measures will be introduced. The real estate market is another factor to consider. With policies driving it, the real estate market has gradually improved, with even some light at the end of the tunnel in the past few months, suggesting that the most difficult period of deleveraging has passed and potential tail risks have been preemptively resolved. Although the market has been concerned about trade conflicts, the tariffs announced so far have not reached worrying levels and have not caused significant disruption. The impact of tariffs in the era of Trump 2.0 may be more evident outside of mainland China. January credit data in China shows a good start to the market in 2025, with credit growth exceeding market expectations and policy support continuing to increase. At the same time, the rise of Chinese AI and DeepSeek is shaking the view that mainland China significantly lags behind the United States in technology, once again making investors aware that China has the ability to innovate and is proving it through action. This helps boost market confidence and significantly changes the sentiment regarding the investment value of the Chinese market. Fidelity believes that Chinese AI can not only drive corporate profit growth and productivity improvement, but also promote employment. Recently, it has been shown in meetings between the mainland Chinese government and private technology companies that they are actively promoting "new quality productivity", which is expected to open a new chapter for mainland China in the field of technology. In conclusion, the driving force behind this round of increase is significantly different from previous ones. Among them, the development of AI may be the most important factor, as it drives the improvement in fundamentals and provides new opportunities. This time, the fundamentals are playing a key role, rather than solely relying on market expectations. However, the role of market expectations should not be underestimated. Fidelity believes that if more fiscal measures can be announced during the Two Sessions, market confidence will continue to strengthen. An expanded fiscal deficit will push government spending to increase, and a rebound in credit impulses will help alleviate deflation concerns, further boosting the reevaluation of mainland Chinese stock market valuations. In an environment of rising global trade protectionism, mainland China cannot rely solely on exports and needs to stimulate domestic demand to kickstart its "second engine" of the dual circulation pattern. This will not only help alleviate the negative impact of tariffs but also help rebalance the economy, effectively address deflationary pressures, and achieve a more sustainable growth model. In addition, amid the changing global trade landscape, the strengthening of the Chinese consumer market can also balance the situation dominated by US consumption. The strong performance and unique advantages of the US economy are mainly driven by its technological leadership and the strong US consumer market, which accounts for nearly one-third of global consumption. The emergence of DeepSeek in the field of artificial intelligence has made a global impact and highlighted mainland China's capacity to compete at the top level in the field of technology. If mainland China implements fiscal and monetary policies to stimulate consumption, it may narrow the consumption gap and attract countries looking for new trading partners. Essentially, mainland China holds the key to using fiscal policy to counter internal deflationary pressures, rebalance the economy, and create a more sustainable local growth.