J-Curve Hypothesis & Profit Lag

Large-scale infrastructure investments incur massive capital expenditures and depreciation costs in their early stages, suppressing short-term profitability. Economic returns only surge nonlinearly once adoption penetration crosses a critical threshold and marginal benefits accelerate. The trajectory forms a J-shape: initial downward dip (loss period) followed by steep upward climb (profit explosion phase).

Read the daily articles behind this idea on the Chinese edition.