During the critical period of the development of the manufacturing industry in China, a thought-provoking phenomenon is unfolding. Despite the fact that our country has already possessed the core elements for developing the manufacturing industry—capital, technology, and a high-quality yet relatively low-cost workforce—leading manufacturing enterprises are caught in a dilemma of being forced to expand production capacity. This phenomenon is vividly referred to as "involution," and it is eroding the profits and growth potential of enterprises.

In response to this challenge, a new round of supply-side reforms has emerged, with the core goal of "anti-involution." However, this reform is not an easy task; it will face daunting challenges: the process may be exceptionally difficult, the cycle may last a long time, and there is also a fairly high risk of failure.

Against this backdrop, investment opportunities will exhibit new characteristics. Industries with high barriers on the supply side, such as resources, policies, environmental protection, and energy consumption, may become the focus of investors. At the same time, leading enterprises with ultra-low cost advantages, highly diversified businesses with abundant cash flow, and "survivor takes all" companies with extremely healthy balance sheets may all become investment hotspots in the future.

For investors, it is crucial to deeply understand the complexity of this reform and the uniqueness of various industries. Adopting a reverse thinking approach for layout and maintaining the patience for long-term holding may be an effective strategy to navigate this long reform cycle. Only in this way can one capture those scarce high-quality rise opportunities amidst the turbulence.

This new round of supply-side reform is not only an important adjustment to China's economic development model but also provides rare opportunities for visionary investors. In this period filled with both challenges and opportunities, maintaining clear judgment amidst the changes and pinpointing the right investment direction will become key factors determining the success or failure of investments.