Commentary
The South China Morning Post (SCMP) recently published a long interview with Fang Fenglei, cofounder of China International Capital Corp. (CICC) and chairman of Hopu Investments. He claimed that arguments against investing in China “do not hold water” and that the “investability” debate is “no debate at all.”
Fang helped build the system he defends and has been tied to China’s party-state financial apparatus for four decades. This “expert” has a direct conflict of interest.
The analysis below looks beyond his claims to other facts omitted (and obfuscated) in his interview to expose investability with communist characteristics, beginning with a quick look into his personal business history.
A Career Built Entirely in the System
Fang’s career rests on one relationship and a lifetime inside state-directed finance. After college, he joined Henan’s Economy and Trade Bureau, where he befriended Wang Qishan. Fang later persuaded Wang to found CICC in 1995 as the country’s first Sino-foreign investment bank and became Wang’s deputy CEO.
Wang rose to become mayor of Beijing, vice premier, anti-corruption chief of the Central Commission for Discipline Inspection, member of the Politburo Standing Committee, and vice president until March 2023. He is one of Chinese leader Xi Jinping’s closest allies, a bond dating to the Cultural Revolution. Fang’s foundational tie, therefore, is to a man who became one of China’s two or three most powerful officials.
From CICC, Fang moved through state-linked posts: CEO of Bank of China International’s Hong Kong investment bank, an executive at Industrial and Commerce Bank of China, and in 2005, chairman of Goldman Sachs Gao Hua, the joint venture he structured to bring Goldman onto the mainland. His signature work was taking major state-owned enterprises public abroad, including China Mobile, China Telecom, China Unicom, China Netcom, PetroChina, and Sinopec.
He built his professional life within the state-linked system he now defends, through a friendship with a man who helped run it. When he says arguments against investing in China “do not hold water,” he defends his life’s work and that relationship—a clear conflict of interest.
CICC Is Not an Independent Bank
The SCMP interview calls Fang the man who “helped create” CICC. That is technically true, but it leaves out what CICC became and who ran it.
After Morgan Stanley sold down its founding stake in 2010, the Chinese state became the dominant influence. Central Huijin—a China Investment Corp. subsidiary—holds about 40 percent and is the largest shareholder. As mentioned, Wang was CICC’s first CEO; Levin Zhu, the eldest son of Premier Zhu Rongji, served as CEO and president until 2015.
The institution Fang presents as a market breakthrough—the vehicle that opened China’s capital markets to partners such as Morgan Stanley—is, in fact, majority-controlled by the sovereign wealth fund. One of Xi’s closest lieutenants founded and chaired it; a premier’s son later ran it for more than a decade, and the Chinese Communist Party’s economic campaigns now set its pay. It is not an independent judge of whether China is investable.
The Data Fang Left Out
Fang points to a 4.6 percent rise in high-tech investment, a 13.3 percent increase in high-tech manufacturing value-added, consumer price index up “only” 1 percent, and more than $100 billion in Chinese drug out-licensing to argue that China is in a healthy transition, not in decline.
Those numbers look accurate. However, the interview omits the other side of the ledger, much of it published almost concurrently with the interview itself.
Youth unemployment (ages 16 to 24 excluding students) hit 17.9 percent in July 2026, the highest July reading in three years. The urban jobless rate rose to 5.2 percent, worse than the usual graduation-season pattern.
Inflation, which Fang calls stabilization, rose to 0.8 percent year-on-year in August from 0.5 percent in July, driven by energy prices, not demand. New-home prices fell for a 39th straight month, down 3.0 percent year-on-year—nearly 40 months into a crash that Fang calls an orderly three-year adjustment already largely over.
Debt is genuinely two-sided, which makes the omission sharper. Beijing cut local governments’ hidden off-balance-sheet debt by more than half in two years through a 10-trillion-yuan bond swap.
Over the same period, total government debt rose to 102.5 trillion yuan and the debt-to-gross domestic product ratio rose to 73.2 percent from 68.7 percent, as official borrowing offset the property slump and weak consumption. The hidden debt did not vanish; it moved onto official books, and the total kept rising.
The “strategic emerging industries” he says absorbed resources freed by the property adjustment show the same overbuilding. Local governments raced to build subsidized artificial intelligence data centers; utilization often ran 20 percent to 30 percent against a target above 60 percent, so Beijing set minimum-use rules and halted new projects in underused regions.
Guizhou Province, a flagship hub, has not turned a profit and ranks 22nd by gross domestic product under the debt load; Xi warned against “reckless decisions and hasty investments.”
That is not a smooth shift into “new growth drivers.” Debt-fueled overbuilding produced the property crisis, and it’s repeating in a new sector.
Concluding Thoughts
The problem with the interview is not that it is built on fabrication; it is that it is built by a lifelong insider—personally tied through Wang Qishan and CICC’s ownership structure to the top of the Chinese party-state—who has selected the statistics that flatter the system he helped build and omitted the ones that undermine his claims.
Lastly, Fang’s “collapse theory versus threat theory” closing is a rhetorical shield, not an argument. Fang says Western views are trapped between two extremes that block understanding of China’s real path. That framing recasts specific, sourced concerns about deflation, property, youth unemployment, or capital controls as caricatured ideology rather than engaging the numbers.
The simple fact is that the September 2026 data do not support Fang’s claim that the investability debate in China is settled.
Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.
