Exclusive Interview with Li Xiaojia, Founder of Drip Irrigation Group: China's Bond Market Has Huge Potential. AI Technology Is Expected to Empower "Cash Rights" to Unlock Trillions in Small and Micro Economy "Stable Alpha"

Ask AI · How can AI technology turn the cash flow of small and micro merchants into stable alpha assets?

China Finance News · April 1 (Reporter Li Ting, Gao Ping) “Investing in China is the trend of the times; it’s the fundamental current you can’t stop.” On March 31, at the ICMA China Debt Capital Markets 2026 Annual Conference, Li Xiaojia, founder and chairman of Drip Capital Group, said in an interview with China Finance News reporters.

Li Xiaojia believes that the development of China’s bond market is an irreversible trend, and breakthroughs in artificial intelligence (AI) technology may transform the “cash rights” of tens of millions of small and micro merchants in China into a brand-new set of “stable alpha” assets, reshaping the underlying logic of financial markets.

China Finance News: How do you view the current Chinese bond market and its development potential?

Li Xiaojia: China has become the world’s second-largest economy, but China’s bond market has not yet reached the scale of the world’s second-largest. The trend of investing in China—and investing in China’s bond market—is the trend of the times; it’s a fundamental tide that can’t be stopped.

The only question is how fast this tide advances—how quickly it can make the scale of China’s bond market match China’s economic size. I think it’s simply a matter of time, and the next decade will certainly be a decade of rapid growth for this market, with a pace that could well exceed general expectations.

Behind this are two major trends driving it: first, China’s relative importance in the world continues to rise, especially in the AI era and the era of “Made in China” production capacity; second, the dollar market itself faces challenges, as does the relative decline of the international order and global hegemony that it relies on. These two trends will drive the global reallocation and restructuring of assets. Therefore, it is almost certain that China’s bond market will move toward the world.

China Finance News: How do you view current international capital’s interest in and participation in China’s bond market?

Li Xiaojia: Although there haven’t been any specific major policy announcements recently, we’ll find that everyone’s attention is very high. For example, at this conference, participants were extremely enthusiastic, and the institutions represented were of very high quality and highly representative. This in itself reflects the characteristics of the bond market. It is a large market driven by asset allocation, and participants are extremely sensitive to cutting-edge trends. They need to make large-scale, strategic adjustments to their asset allocation, which requires a large amount of information input and internal debate.

Now everyone has seen this direction and feels the urgency. At the same time, against the backdrop of a complex international environment, they increasingly feel that China is a responsible and trustworthy market. Therefore, we can say that the development of China’s bond market could not be more timely.

China Finance News: Which breakthroughs in the financial sector are you currently focused on?

Li Xiaojia: What I care about is a possible long-term ideal for the future of China’s financial markets. Unlike Western developed economies, in China—and across the entire “Global South”—a large amount of economic activity exists in small and micro enterprises and individual merchants, not in traditional large multinational corporations. The financing costs for these economic activities are still relatively high.

This leads to two problems: first, the inclusive financial support that small and micro economies receive is still fairly limited; second, investors miss out on the opportunity for strong returns in 80% of economic activity.

Traditional finance can’t standardize and scale the service to small and micro businesses through “three statements.” But in today’s highly digitized era, the underlying cash flows of these small and micro entities are actually clearly visible. Could we not insist that they all become “big companies,” and instead treat them as a sequence of “cash rights”?

If we can, just like drawing a gene map, use digital means to depict the cash-flow vital signs of a small restaurant or a small shop over a one- or two-year cycle—and characterize them using indicators such as risk, returns, and volatility—then combine tens of thousands of such “vital signs” together, we can form an asset package that is far more transparent, more diversified, has lower risk, and provides higher-frequency feedback than the underlying assets in traditional bonds. This could create a brand-new underlying asset—perhaps we can call it “stable alpha.”

China Finance News: What is “stable alpha,” and what is the key to achieving it?

Li Xiaojia: In finance, “stable” typically isn’t “alpha” (excess returns); “alpha” often isn’t stable. We want to break this curse. We believe it is entirely possible to extract assets with relatively high returns but very stable performance from China’s vast, healthy, high-frequency cash flows of small and micro economies—namely “stable alpha.”

In the past few years, we went through painful exploration and found an “impossible triangle”: you can’t adequately balance scale, risk, and costs. The same is true in traditional finance: once you scale up and contain risk, costs become very high. We once thought digitization could solve the cost problem, but we found that to reach these fragmented small and micro entities, you still need a massive on-the-ground sales and outreach team; costs wouldn’t come down, and the business model couldn’t be made to work.

Now, a great era has arrived—AI breakthroughs bring a turning point. Since the beginning of this year, we’ve seen a leap in the capabilities of AI tools. For the issues of scale and risk, through our design we can now manage them. For the cost problem that previously seemed unsolvable, we now see possibilities and hope for solving it through AI. AI can efficiently process extremely fragmented, seemingly “non-standard” data—yet each scenario is extremely simple and standardized—extract, label, analyze, and combine them.

This may not necessarily be something we ultimately get done ourselves, but in the AI era it will certainly succeed. Once it succeeds, it will transform 80% of China’s small and micro economic activities—previously seen as a “weak link”—into a powerful support and unique advantage for financial markets. At that time, China’s bond market and international capital will have an irresistible new “gravity field.” The maturation of AI technology will become the final piece to crack the problem of scaling inclusive finance, thereby unlocking the enormous financial value of China’s trillion-level small and micro economy.

(China Finance News reporter Li Ting, Gao Ping)