A Ruthless Person: Real Estate Lost 198.8 Billion, Photovoltaics Lost 31.5 Billion, but China Tobacco's Annual Tax Revenue is 1.66 Trillion, ICBC's Net Cash Ratio is 5.13—Revealing How China's 5 Major 'Administrative Monopoly Cash Cows' Legally Move the Surplus of All Consumers into Their Own Pockets, Making Wealth Inequality Irreversible.

This content starts from the cash flow of A-share listed companies, pointing out that China's so-called profitable industries are highly concentrated in a few monopolistic sectors such as state-owned banks, energy and mining, telecommunications operators, high-end liquor, and large hydropower. The article argues that against the backdrop of a declining Chinese economy and widespread losses in industries like photovoltaics, electric vehicles, retail, and real estate, the entities that can truly generate cash flow are not innovative enterprises, but privileged sectors relying on administrative approval, resource exclusivity, license barriers, and rigid demand. This institutional monopoly is essentially a form of implicit taxation, continuously transferring wealth from ordinary consumers to monopolistic groups, ultimately exacerbating wealth disparity and social stratification.

Observe things as they are, reject fragmented cognition.

Yesterday I saw that Alibaba was losing money, so I've been thinking about a question for the past couple of days: what businesses in China are still making money right now? Who can still make a fortune quietly under these circumstances?

With this question in mind, I scanned the financial records of all A-share listed companies. In the current environment, net profit on A-share financial reports is no longer meaningful; it's worthless, so don't bother looking at it.

The true indicator of a company's fundamental profitability is its operating cash flow.

Many companies' income statements look prettier than PPT presentations now; even Jia Yueting would call them master. But when you look at the cash flow statement, it's full of pitfalls. BYD is an example. This is what we often call paper wealth.

So today, we will use cash flow to cleave the entire A-share market in half, to see who can still earn real money in China's current economic meat grinder, and who is just paper wealth. More importantly, we will ask: on what basis can they continue to make money?

The answer might lead you to a new understanding of how wealth is distributed in Chinese society.

Let's look at the first set of data. In 2025, the total revenue of all 5,511 A-share listed companies was 72.96 trillion yuan, a year-on-year increase of 1.2%; net profit exceeded 5.39 trillion yuan, an increase of 2.6%.

By the first quarter of 2026, revenue was 17.7 trillion yuan, an increase of 4.9%; net profit was close to 1.6 trillion yuan, an increase of 7.4%.

Sounds okay, right? But beneath the surface, there is a large-scale, brutal clearing.

For example, what was the situation in 2025 for those star sectors once hyped by the CCP? I will report to you leaders one by one.

I won't even mention electric vehicles; we've said enough about similar things. Take photovoltaic equipment, for instance, with overall losses exceeding 31.5 billion yuan; general retail lost 27.4 billion yuan; real estate development losses reached a staggering 200 billion yuan.

Some of these relied on subsidies, some on boasting, and some were directly funded by cash flow. Once liquidity recedes, book profits are almost entirely wiped out, accounts receivable become bad debts, and there are massive impairments of inventory.

But at the same time, the real contrast emerges. While everyone is crying about a lack of money, a few sectors show an astonishing ability to attract funds.

Let's continue with the data.

In 2025, the operating cash flow of the Shanghai Main Board accounted for 85.1% of all A-shares, and its net profit share reached an even higher 81.6%.

Notice something? The share of cash flow is even higher than the share of profit. What does this indicate? It means that within the entire economy, the vast majority of real liquidity is concentrating with a very strong trend towards a few giants with extremely high barriers to entry.

So the question is, who are these cash behemoths?

I believe you are also very interested. Therefore, I deliberately discarded the net profit indicator, which is most easily manipulated by accounting methods, and adopted a three-dimensional system. This three-dimensional indicator includes: scale of net profit, net operating cash flow, and a crucial net-to-cash ratio, which is operating cash flow divided by net profit.

This ratio is the mirror that tests whether a company is truly generating cash.

Based on this standard, here are the top five strongest industries in China right now. Take a look.

The first one, needless to say, is large state-owned commercial banks.

These entities are in the business of money. Moreover, the CCP has drastically adjusted bank accounting standards in the past two years. Although we have dissected China's state-owned commercial banks countless times and know what these rotten banks are all about, their sheer size and administrative barriers are undeniable. Today, we will use the CCP's financial report data to discuss this matter.

In 2025, the overall net profit attributable to the parent company of commercial banks exceeded 1.42 trillion yuan, a counter-cyclical increase of 1.65%.

Take ICBC as an example. Its net profit was 368.5 billion yuan, while its net operating cash flow was close to 1.89 trillion yuan, with a net-to-cash ratio of 5.13.

We won't dwell on banks any further; we've discussed them enough before. The Chinese financial sector is clear at a glance. If the overall profitability of A-shares is the CCP's face, then the profitability indicators of China's state-owned banks are its lips – they must be bright red. If even these state-owned commercial banks were to present their bad debts to you according to accounting standards, it wouldn't just be painting their lips black; it would be painting the CCP's teeth black too.

Let's continue.

The second one, which has some degree of authenticity but is often overlooked by many, is a sunset industry: traditional energy and mining.

In recent years, star sectors have been chasing photovoltaics, electric vehicles, and lithium batteries. As a result, the new energy sector has become a red ocean, with almost no survivors. In contrast, coal and oil have been quietly making huge profits.

PetroChina's revenue in 2025 reached a staggering 2.8644 trillion yuan, ranking first in A-share revenue.

Looking at coal giant China Shenhua, its net profit was 60.1 billion yuan, operating cash flow was 93.3 billion yuan, and its net-to-cash ratio was 1.55. This means that for every yuan recorded on its income statement, it actually received 1.55 yuan in its account.

The third is the three major telecommunications operators.

Taking China Mobile as an example, its revenue in 2025 exceeded the trillion-yuan mark, reaching 1.05 trillion yuan; net profit was 137 billion yuan, operating cash flow was 232.9 billion yuan, and the net-to-cash ratio was 1.7.

How ruthless their model is, I believe you experience it in your daily lives. Users are forced to pay monthly fees, from tens to hundreds of yuan, with payment preceding service. This results in a bad debt ratio approaching zero.

The fourth, which might surprise you, is high-end liquor.

It seems that this

Decades of investment have long been completed. And they are just squeezing toothpaste. At the same time, they can exploit both upstream and downstream. They can raise prices for downstream as they please, and delay for upstream as they please. You sue them? Their main strategy is to be completely indifferent. Anyway, you can't win the lawsuit. Even if you win, it's too difficult to get them to return the money.

Speaking of which, the core issue surfaces.

What are the most profitable industries in China now? They all have an unbreakable moat. This moat is the administrative approval threshold, and the CCP's monopoly on all natural resources.

Now we divide this barrier into two categories.

The first category is innovation-driven. What are the representatives? Steve Jobs' Apple, early Tesla, and Nvidia, which leads the AI revolution.

Where does their excess profit come from? It comes from disruptive technological innovation, ultimate product experience, and continuous high-intensity R&D investment. They have fought their way step by step in brutal free competition.

But this kind of barrier is actually fragile because it needs to be constantly rebuilt. Once the technological route is missed, the moat will collapse in a very short period. Nokia and Kodak in the past are bloody lessons.

The second category is driven by the CCP's privileges and resources. This is the common background color of China's cash cows.

Banks and telecommunications are essentially monopolies of financial and public utility licenses, aren't they? Even if you have advanced AI risk control or substantial capital, you can't get this license. You can't get online, and you can't do the business of accepting deposits.

Coal, oil, and hydropower are blatant CCP monopolies. What technical content does this have?

So the key is not about how advanced the technology is, but what? It's whether you can obtain the license at a low cost, get access, and get the mining rights.

The most extreme example is tobacco monopoly.

The CCP, with its "Tobacco Monopoly Law of the People's Republic of China," has effectively eliminated any possibility of private competition at the legal level. As a result, the tobacco industry alone contributes more than one-tenth of the national tax revenue.

This annual stable huge profit of trillions is purely played out by the CCP's monopoly system, and it has nothing to do with market competition, or rather, it has absolutely nothing to do with it.

Conversely, if an industry is completely protected by administrative barriers, such as pure manufacturing industries like photovoltaic and lithium batteries, or even ordinary e-commerce, no matter how excellent your technology is, even if you become the global leader, you can be caught in a fierce price war within a few months, your profits can instantly become zero, or even lose tens of billions.

As everyone knows, even Alibaba is losing money in the first quarter, photovoltaic is even worse, and electric vehicles don't even need to be mentioned. Basically, the industries that the CCP used to brag about are now all declining.

So you see, in China today, what determines whether an industry can make money stably in the long run is not your operational skills, not how good your products are, but whether you have hit the wall of administration and resources.

What else can this high wall create besides profit? It creates monopoly rent.

As long as there is monopoly rent, irreversible wealth polarization will follow.

What is monopoly rent? This can only be compared. Compared with whom? Compared with a fully competitive market.

In a fully competitive market, if companies can only compete for customers by improving efficiency and lowering prices, who benefits in the end? Consumers. The consumer surplus of the whole society is constantly increasing, which is a benign Pareto improvement.

Once the barriers are forcibly set up by administrative power, efficient competitors will be blocked by laws and licenses. What motivation does a monopolist have to lower prices? As long as it controls output and maintains high prices, it can steadily and continuously reap excess profits.

This process is essentially an implicit tax on the entire population. It legally and unilaterally transfers money that should be in the pockets of hundreds of millions of consumers to a few monopolistic enterprises.

And this transfer will increase the wealth gap through three paths.

Why is the wealth gap in China so large now? It is caused by these paths.

First, the compensation for factors is completely imbalanced.

In monopolistic enterprises, the rate of return on capital has long been significantly higher than the economic growth rate. As a result, the wealth share of those who rely on selling physical strength and labor is irreversibly and passively eliminated. Unless you don't make phone calls, don't refuel, don't use electricity, wouldn't that be going back to the primitive society? So it's unlikely.

Then there will be an insurmountable wage gap between industries. There is data that everyone can look at: the income gap between monopolistic industries and competitive industries is more than 50% purely caused by monopoly power. It has nothing to do with how hard you work or how high your labor productivity is. It is simply the direct monetization of administrative power.

The employees and leaders of these monopolistic enterprises have a very vulgar slogan.

For example, China Tobacco. If you are an employee or leader of China Tobacco, you can shout a slogan, which is very powerful: "I dedicate my youth to China Tobacco, and after dedicating my youth, I will dedicate my descendants."

When these people think about dedicating themselves and their descendants, the entire class is directly solidified. Because places like China Tobacco are extremely profitable and have almost zero risk. Who wouldn't want to dedicate their youth and descendants to such a place?

However, if you want to dedicate, you have to spend 400,000 to 800,000 yuan first, and you need connections to have the opportunity to dedicate. That's really sharpening your head and desperately trying to squeeze into the bottom of this monopoly system.

Isn't the economic logic: monopolies can not only continue but also be inherited?

As long as the regime is supported by administrative barriers, it is not a matter of ability, but entirely depends on blood ties, and who your father is.

Once blood ties start to matter, this society will inevitably lead to the rich getting richer. And ordinary people at the bottom not only have to face intense involution but also bear the high communication fees, high energy costs, and high financial costs brought by monopolistic industries. Even the ability to save a little money will be gradually stripped away.

Look at China Tobacco, it is now the largest single profitable entity in the world. In 2024, its direct tax and profit will be 1.6 trillion yuan, and in 2025, it will increase by 57 billion yuan to 1.657 trillion yuan.

Even within China Tobacco, the hierarchy is very strict. For example, tobacco workers and formal employees with formal establishment, even with only junior high or high school education, are incomparable to ordinary people in terms of treatment and benefits. However, those who are externally hired or dispatched labor, even if you are a Ph.D., do the same work as others, but your income and treatment are still in the category of discrimination.

A Ph.D. and a junior high school student in the same position, just because they are not within the establishment, live completely different class lives.

Now you know how the wealth gap in China is generated, right?

This is a dual compensation mechanism. In market-oriented countries, there is a premium for ability because the market is uncertain. The CCP, on the other hand, gives a premium for certainty because administrative barriers are certain.

So let's think about the simplest question: what is solidified in society? The ability to solve uncertainty is solidified.

Therefore, in China today, don't start businesses anymore. Because the premium for solving uncertainty in China is very low now, it has hit the floor.

So today we see through a few things.

First, in an era of tight cash flow, net profit can be deceiving, but operating cash flow is the real mirror of self-sustaining ability.

Second, the five major industries that truly penetrate real money are banking, energy, telecommunications, liquor, and hydropower, in that order. What do they rely on? They rely on administrative monopoly, rigid demand, and exploiting both ends of the industrial chain. This is the commonality of these industries.

Third, and most importantly, the moat of these industries is essentially not technology or market competition, but administrative thresholds and exclusive resource control. This high wall is continuously transforming the consumer surplus of the entire population into monopoly rent for the monopoly groups.

What will this cause? It will cause the wealth gap to expand irreversibly, and then lead to the complete solidification of classes.

Once you understand this logic, you should understand why applying for civil service and public institutions has been so popular in recent years, and why people are sharpening their heads and spending so much money to squeeze into state-owned enterprises, tobacco, and other such sectors.

You can also see why Alibaba is losing money this time, right? Even if you become the global number one, your profits can become zero overnight.

These are never just about who works hard, but about which side of that high wall you stand on.

This is why I have always said that if you can leave, you should leave. Because doing the same thing, the probability of turning your life around in China is far lower than abroad.

Okay, I'll stop here for today. If you like my show, please click the little bell below. If you want to support me, you can join the member channel. The member channel has four in-depth programs every month.