UBS(US:UBS) 2 1 Shi Ji Jing Ji Bao Dao·2025-07-10 13:15Group 1: Chinese AI and Technology Sector - The Chinese AI sector is experiencing strong growth, and UBS remains optimistic about the performance of Chinese tech stocks in the second half of the year [1] - The ongoing tariff war presents an uncertain outlook, leading to a cautious stance from China regarding large-scale fiscal stimulus measures, although there is still room for interest rate reductions [1] - Over-competition is identified as a major pain point for investors in China, with many companies engaging in irrational price wars, resulting in Chinese tech companies being valued at only half of their U.S. counterparts [1] Group 2: Government Policies and Market Dynamics - The Chinese government is committed to combating "involution" and has signaled strong policy intentions to regulate low-price disorderly competition, encouraging companies to enhance product quality and facilitate the orderly exit of outdated capacities [1] - The ultimate winners in this competitive landscape are expected to possess global competitiveness [1] Group 3: Diversification Trends in Investment - There is a noticeable trend among clients shifting from U.S. assets to more diversified investments, with strong growth observed in Asian and European assets [2] - The volatility in the U.S. market serves as a reminder of the importance of diversification during periods of high uncertainty [2] - UBS plans to maintain U.S. asset allocation between 50% to 66%, with emerging markets in Asia, led by China, being a key focus for diversification [2] Group 4: Currency Outlook - Progress in trade negotiations and improved capital flows support the potential for further appreciation of the Renminbi, with expectations for the exchange rate to reach 1 USD to 7 CNY by mid-next year [2]