Cai Lei: Concept of Spacetime and Evolutionism

2017-04-13

From April 12 to 14, 2017, the 11th ChinaVenture Investment Conference & Annual Summit, hosted by ChinaVenture Information and co-organized by chinaventure.com, was held in Shanghai. During the conference, President Cai Lei of JD Capital delivered the keynote speech of “Concept of Spacetime and Evolutionism”.R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司


R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Complete text of the speech is as follows:R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司


R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Hi everyone! I would like to thank ChinaVenture for inviting me to the conference, so that I can share my views with all of you here in Shanghai.R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Today, whether an investor or a businessman, all of us can perceive that the external uncertainties are mounting. Everyone is like a leading role in the famous Hollywood movie series Fast & Furious, experiencing fastness and furiousness. Each of us is driving a high-speed car with brakes removed. The car is going faster and faster into traffic conditions we’ve never seen. One mistake, all ruin.R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

This is how we are and where we are. At this point, I am going to talk about three things today.R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司


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A New Concept of SpacetimeR20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Firstly, I want to talk about the concept of spacetime.R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

The development of human society keeps accelerating. In the past several hundred thousand years, from chimpanzee to the first Homo sapiens in Africa who could walk upright, from gathering society, agrarian society, and industrialization to information technologies and artificial intelligence – the pace of human beings making progress is getting faster. In the past, it might take human beings millennia, centuries, years or days to bring about dramatic changes; in the future, however, the time needed may be further shortened to even seconds or microseconds. R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Recently, a buzz phrase called “the cycle of wetting one’s pants”, has been quite popular, which is exactly what I am talking about. But this phrase will soon be obsolete as well, as the cycle may get so short that even such behaviors will become meaningless. Time can be segmented in an infinite manner, and, theoretically, there is no limit to speed. As the pace of everything accelerates, the life cycle of human beings may become longer in relative terms, and the effect will be increasingly remarkable.R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

People’s life cycle will be longer in absolute terms as well. One hundred years ago, people might live 30 to 50 years on average; today, the average life expectancy of human beings is 70 to 80. I would predict that, with the development of life technologies in the next 20 to 30 years, the average life expectancy may be pushed up to 150.R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Time and space are two objective concepts, both with absolute senses in physical terms. But in the meantime, they also appear to be subjective, for every individual life can directly experience time and space in their lifetime. Due to the combination of the two effects above, the life cycle of human beings becomes longer in both relative and absolute terms, which means that everyone can enjoy more abundant life experience and may confront more uncertainties. Our parents and grandparents would probably have only one chance to witness a major social or technological revolution in their lifetime, but we, as well as our descendants, probably will experience many.R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Nevertheless, the brain and body of each individual is still comfortable with the existing cycle: the sun rises and sets every day; and it takes the Moon one month to circle once around the Earth and the Earth one year to circle once around the Sun… The natural cycles in the universe remain even and stable. At least, it may see few changes within one hundred years, the average length of a man’s lifetime.R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

This brings with it the biggest problem for human beings: the development of the human society is accelerating exponentially, but we, the individuals, are still only comfortable with the linear time in the natural environment outside. Our genes, a solution handed down by our ancestors, fail to develop in tandem with society. In other words, their slow development cannot address the challenges brought by social changes.R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

This is the first viewpoint I would like to share with you. We shall review the environment we are in and the most essential problems with a new concept of spacetime, a concept that makes sense in both sociological and historical terms.R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司


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A Reinterpretation of EvolutionismR20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Secondly, I want to say something about evolutionism, which is also the theme of this annual summit.R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

The theories of biological and social evolution are not only depicting a historical process, but also serving as an important solution to the problems of our survival and development in the future. There are two core ideas in evolutionism: “species competition” and “natural selection”R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

“Species competition” refers to the survival competition between different species. All of us here are facing survival competition, as are all individuals, groups and nations. In an environment with limited resources, competition is unavoidable. The key factor contributing to a win is the establishment of competitive advantages. For all species, the key to survival is not about one’s own excellence, but about comparative advantages against competitors. This is a fundamental conclusion of competition theories.  R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

From the UK’s exit from EU, Trump’s winning in the US election, to the establishment of Xiong’an New Area – almost every day, we are facing unpredictable events which are actually quite influential. However, even if we successfully foresee something, there are still a lot more awaiting us. In this condition, reactions appear to be more important than predictions. If you can make reactions faster than others, you win the competition.R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

But the comparative advantages against competitors can only bring about short-term success. In the long run, these advantages are far from enough. Moreover, they only work well in a stable environment and appear to be ineffective in a volatile environment. For one thing, taking the long view, environment and competitors will change; for another, competitors are constantly changing in a highly dynamic environment. Under the two circumstances, competitive advantages will certainly be useless and meaningless. Hence, we shall resort to the second – also the more important – idea in evolutionism, “natural selection”.R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

The idea means that, after the selection of nature and tests of harsh conditions, only the fittest survives. To survive for a longer period and in a dynamic environment, living organisms shall seek genetic mutations and organizations shall keep pursuing innovative ideas. More importantly, the genes and innovations must be capable of adjusting to environment changes. R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

While every single person, as an organic body, is directly restricted by the ultimate capacity of proteinic creatures, the speeding process of human being as a whole will stagnate, and the fate of “human” of being eliminated as a proteinic species is seemingly inevitable. This is the greatest challenge posed by the future. One hundred million years ago, dinosaurs used to rule the Earth, but turned to be vulnerable facing the changes of their living environment. The situation human beings face now, though caused by ourselves, is even worse.R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Of course, the pessimistic statement is still unlikely to turn into reality in our course of life. For organic lives, they should not only gain competitive advantages, but develop mutant genes to survive and succeed in a more rapidly-changing environment.R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司


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China’s PE industryR20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Third, let’s come to the PE industry. Last year, I put forward the three-stage argument of PE in China – the changes and evolutions in China’s PE industry.R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

The first stage of PE in China is growth investment, which ended during the financial crisis in 2008. This is followed by stage II, named Pre-IPO, or “growth + listing”, where we find outstanding non-listed enterprises and help them access the A-share market. However, PE firms that only talks about growth and listing now may face the same destiny as dinosaurs, as environment has changed.R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Now, China’s PE industry is at its third stage, where the major mode of investment is to offer access to industry, i.e. “growth + listing + integration”. This is consistent with the national call for supply-side reform and real economy development. PE’s need to fully combine with the real economy reflects the evolution of China’ PE industry at the asset side.R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

China’s PE industry has also greatly evolved at the capital side. While we used to say China’s PE developed too slowly to have a domestic PE firm capable of managing hundreds of billions capital, this is no longer the case. Last year, a number of national PE managing hundreds of billions emerged just in a while, projecting to greatly change the development mode and pace of China’s PE industry.R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

As a practitioner in the PE industry, JD Capital has been innovating and developing. We evolve at the capital side to go public, and our funding basically come from major institutional investors.R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Our core asset strategy is to reinforce the industrial feature of PE capital while maintaining its financial nature, and focus on industrial integration and industrial investment. This year, we summarize and start to implement the “Bellwether Emerging Plan”, the name derived from the Book of Changes. The plan includes two detailed modes: “1 + N”, which helps leading enterprises with industrial integration; and “N in 1”, which actively build industrial leaders. We hope to implement such plan in over a hundred industrial segments. To this end, JD Capital is thirsty for a large number of talents in industrial integration, and looks forward to cooperating with more investment institutions and institutional funders. The future opportunities are plenty.R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Last, time to return to our topic at the beginning. This is a highly dynamic, faster-changing era with endlessly emerging uncertainties. The situation is the same for all. To be a good actor in our own movie Fast and the Furious, you have to firmly hold the steering wheel and perform more steadily than other competitors. More importantly, you should be on track as soon as possible, and adapt to environment through fast upgrade and evolution. If you can manage these, what lies in front of you will be more splendid sceneries, instead of more risks.R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

That’s all. Thank you!R20九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

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