At the inaugural NOAH's ARK Global Chinese Wealth Management and Inheritance Summit held on 1 August, we unveiled key insights from the tenth edition of the Noah Holdings 2025 H2 CIO Report. This landmark event serves as Noah ARK's premier global branding and client engagement platform, highlighting our ecosystem's research-led foresight and drawing nearly 600 new and existing clients from the global Chinese community to Singapore.

Ms. Jingbo Wang, Founder and Chairwoman of Noah Holdings, articulated in the report: "we are entering a new capital era shaped by technology-led deflation," advocating a paradigm shift in asset allocation from inflation-centric models to those embracing technological deflation.

She emphasized that over the next two decades, the defining challenge will center on understanding, embracing, and profiting from deflationary trends. For wealth managers, the priority is not to sidestep deflation but to leverage technology's deflationary dividends, strategically restructuring portfolios to fortify resilience in today's environment while capturing sustainable growth opportunities for the future. Sustained wealth is achieved not through the speed of returns but through the strategic alignment of allocations.

We are Entering a New Capital Era Shaped by Technology-led Deflation Noah CIO Office 

Entering a New Capital Era Shaped by Technology-led Deflation
Since 2020, global markets have faced unprecedented uncertainty, marked by escalating geopolitical tensions, ongoing supply chain restructuring, and volatile monetary policy swings between accommodation and tightening. These dynamics have challenged conventional investment frameworks, rendering them increasingly inadequate.

At the same time, breakthroughs in AI, big data, blockchain, and clean energy are reshaping economic structures at an accelerated pace, propelling marginal costs of information, computation, and energy toward negligible levels.

The current market unease transcends income inequality, reflecting deeper skepticism about the sustainability of existing economic systems. Amid rising geopolitical volatility and continued monetary easing, what defines a resilient asset allocation framework capable of navigating market cycles?

As Canadian economic thinker Jeff Booth incisively observes in The Price of Tomorrow:

"Technology naturally drives deflation, promoting more affordable living and greater societal efficiency, however, we continue to navigate a misaligned world using inflationary frameworks."

While the past two decades focused on countering inflation through investments in inflation-hedging assets, the upcoming era will center on understanding and strategically leveraging tech-driven deflation to unlock new value.

The rapid advancement of AI not only highlights structural economic tensions but also sparks a fundamental rethinking of value creation.

The future economic landscape will move away from debt-driven asset bubbles, embracing a new growth model powered by tech-driven deflation and efficiency gains.

For wealth managers, the opportunity lies in harnessing technology's deflationary benefits, restructuring portfolios to strengthen resilience in today's markets while positioning for long-term growth.

1. Inflation Assets as a "Reality Anchor": Still Important, but it's Changing

The current economic landscape cannot be simply classified as high- or low-inflation, presenting instead a dynamic "dual-track" environment. Structural inflationary pressures driven by geopolitical tensions, deglobalization, aging populations, and energy transitions coexist with powerful deflationary forces fueled by technological innovation.

To navigate this duality, asset allocation must balance inflation-hedging strategies for near-term stability with deflationary opportunities for long-term growth.

Why do dual-benefit assets remain essential?

Recent monetary and fiscal expansions have inflated global asset valuations, making commodities, real estate, defense, and infrastructure vital safe havens. These inflation-hedging assets provide stability amid systemic risks and declining institutional trust.

Structural inflation persists through multiple channels: geopolitical conflicts driving up defense and resource costs, aging demographics increasing healthcare and welfare spending, green energy transitions raising restructuring costs, and deficit monetization amplifying policy-driven inflationary risks.

The dual-benefit assets remain critical "reality anchors" in today's markets, as Jeff Booth warns in The Price of Tomorrow:

"When governments attempt to address structural problems with short-term measures, the cost is not borne today but tomorrow."

Over-reliance on monetary and fiscal measures undermines these assets' long-term valuation strength. 

A prudent approach maintains significant exposure to dual-benefit assets to counter stagflation and geopolitical risks while creating space for tech-driven deflationary strategies.

2. Tech-Driven Deflation: From Emerging Concept to Central Investment Driver

Technology's nature is to deliver greater value with fewer resources, making it the primary force behind structural deflation and a cornerstone of modern investment strategies.

This deflation manifests in two ways: reduced costs for services, production, and delivery, and scalable expansion of user access. AI and platform ecosystems transcend traditional limits, shifting from enterprise-centric models to interconnected networks.

These efficiency gains represent a critical value frontier. Examples include AI automating repetitive tasks to boost scalability, blockchain lowering trust and transaction costs, automation enabling manufacturing repatriation, solar and energy storage reducing energy costs, advanced computing and AI models reshaping decision-making, and stablecoins alongside Bitcoin creating rule-based global financial systems.

Investors should leverage ETFs and carefully selected equities to capitalize on opportunities between valuation adjustments and technological breakthroughs, gradually increasing deflationary asset exposure to roughly 30% of portfolios over the next 3–5 years. This aligns with the summit's emphasis on technology-driven strategies for sustainable growth.

3. Three-Pillar Allocation Framework: Reality Anchor + Deflation Engine + Adaptive Bridge

We stand at a pivotal moment where old economic systems are fading, and new paradigms are taking shape. Asset allocation must blend pragmatism, vision, and flexibility to address immediate macroeconomic risks, seize future growth opportunities, and maintain liquidity in uncertain times.

The Three-Pillar Allocation framework outlines these goals:

Pillar 1: Inflation Assets (gold, defense, infrastructure, REITs) mitigate risks and ensure stable cash flows, hedging against inflation and uncertainty.

Pillar 2: Deflation-Benefiting Assets (AI, digital currencies, green energy, automation) capture technological growth.

Pillar 3: Adaptive Bridge Assets (stablecoins, short-term bonds, cash equivalents, multi-strategy portfolios) to maintain flexibility and supporting liquidity.

4. Dynamic Rotation and Risk Management Protocols

To manage uncertainties in technological adoption, policy shifts, and market fluctuations, we recommend a semi-annual rotation strategy. Increase dual-benefit asset allocations during rising inflation or geopolitical tensions, boost deflationary exposures when interest rates peak or tech valuations adjust, and strengthen adaptive bridge assets and cash holdings during heightened volatility or tightening expectations. This agile approach ensures portfolios remain resilient, as emphasized in the summit's discussions on navigating market cycles.

Bridging Structural Shifts Toward a New Economic Paradigm

The future does not merely extend the past; it is a dynamic leap driven by structural transformation. Technology-driven deflation is subtly reshaping the economic landscape, challenging traditional growth models rooted in debt and monetary expansion.

Wealth management must adapt to this shift. In this dual-track era, a balanced mindset is crucial. Crafting a structured allocation framework that navigates the tension between "current inflation" and “future deflation” demands neither cautious retreat nor reckless optimism, but a strategic, resilient, and forward-thinking approach.

True wealth lies not in the pace of returns but in the alignment of allocations with transformative trends.