Core Viewpoint - The rise of the Renminbi (RMB) is reshaping wealth security perceptions globally, as it becomes a safe haven for investors amid global market volatility caused by Federal Reserve interest rate hikes [1][8]. Group 1: RMB Internationalization Progress - In Q1 2024, RMB bonds attracted a net inflow of 120 billion yuan from foreign investors, marking a three-year high and indicating steady progress in RMB internationalization [1]. - China has signed currency swap agreements with 40 countries across Asia, Africa, Latin America, and Europe, totaling over 4 trillion yuan, providing a financial safety net during dollar liquidity crises [3]. Group 2: Global Adoption and Usage - RMB deposits in Moscow's foreign trade bank have reached 33% of total foreign currency savings, expected to rise to 50% by year-end, reflecting the currency's growing international appeal [5]. - Various countries are increasingly using RMB for transactions, such as Argentine supermarkets pricing beef in RMB and Thai convenience stores accepting RMB payments [5]. Group 3: Impact on Daily Life and Prices - The direct trading of RMB with over 30 countries has reduced the price volatility of imported goods, with the price fluctuation of imported soybeans dropping from 15% to 9% after switching to RMB settlement [6]. - In 2023, the overall price volatility of imported grain and oil settled in RMB decreased by 40%, contributing to more stable consumer prices [6]. Group 4: Cross-Border Payment System - The Cross-Border Interbank Payment System (CIPS) now covers 186 countries, processing over 480 billion yuan daily, significantly lowering transaction fees for individuals and businesses [7]. - Over 200 universities globally support RMB payments, enhancing convenience for students studying abroad [7]. Group 5: Macroeconomic Implications - More than 80 countries have included RMB in their foreign exchange reserves, and the IMF has increased the RMB's weight in Special Drawing Rights (SDR) to 12.28%, strengthening its international credit [7]. - A 1% increase in RMB internationalization can reduce domestic inflation pressure by an average of 0.3 percentage points [7]. Group 6: Overall Economic Impact - The internationalization of the RMB is fundamentally altering economic dynamics, leading to more stable prices, safer savings, and enhanced financial security for ordinary citizens [8].

Report Industry Investment Rating No relevant content provided. Core Views of the Report - The financial support for the continuous improvement of the economy has increased. China's central bank implements a moderately loose monetary policy, aiming to maintain ample liquidity and promote a decline in financial market interest rates and social comprehensive financing costs [2]. - The US labor market has slowed down rapidly, with the July non - farm payrolls increasing by only 73,000, the lowest in 9 months, and the unemployment rate rising slightly to 4.2%, which may trigger new recession concerns [3]. - The real estate industry policy implementation rhythm is expected to accelerate, and the policy flexibility of first - tier cities and core areas may exceed expectations [29]. - The macro - policy may focus more on monetary policy relaxation in the third quarter, considering the low possibility of short - term fiscal incremental policies [29]. Summary by Directory 1. Macro Data Overview - In Q2 2025, GDP at constant prices had a year - on - year quarterly increase of 5.2%, slightly lower than the previous quarter's 5.4% but higher than the same period last year's 4.7% [1]. - In July 2025, the manufacturing PMI was 49.3%, down from 49.7% in the previous month; the non - manufacturing PMI for business activities was 50.1%, down from 50.5% in the previous month [1]. - In June 2025, the year - on - year growth rates of M0, M1, and M2 were 12.0%, 4.6%, and 8.3% respectively, with M1 and M2 showing significant increases compared to the same period last year [1]. 2. Commodity Investment Reference Comprehensive - China's central bank will implement a moderately loose monetary policy in the second half of 2025, including reducing the deposit reserve ratio and lowering policy interest rates [2]. - The US President Trump modified "reciprocal tariffs" for dozens of countries, with rates ranging from 10% to 41%, and postponed the effective date to August 7 [2]. Metals - The price of tungsten has reached a new high due to supply contraction and an increase in long - term contract prices. In the past two weeks, the price of black tungsten concentrate has risen by 7.82% to 193,000 yuan/ton, and the price of ammonium paratungstate has risen by 7.95% to 285,000 yuan/ton [5]. - Three major steel enterprises jointly opposed the speculation of high molybdenum prices, as the profit of the industrial chain is highly concentrated in the mining end [5]. Coal, Coke, Steel, and Minerals - The China Coking Industry Association decided to raise the price of coke on July 31, with different price increases for different types of coke [9]. - In July 2025, India's coal production was 46.4 million tons, a year - on - year decrease of 16%; sales were 53.7 million tons, a year - on - year decrease of 11% [9]. Energy and Chemicals - China plans to reform the pricing mechanism of provincial natural gas pipelines, transitioning from "one - line, one - price" and "one - enterprise, one - price" to regional pricing or unified provincial pricing [11]. - OPEC+ core members will decide whether to fully exit the 2.2 million barrels per day crude oil production cut plan in September or take a more cautious approach [12]. Agricultural Products - On August 3, the average price of live pigs was 14.29 yuan/kg, with a daily decline of 0.01 yuan/kg. The price increase at the beginning of the month failed to meet expectations [14]. - On August 1, the average price of pork in the national agricultural product wholesale market was 20.60 yuan/kg, a 1.3% decrease from July 25 [15]. 3. Financial News Compilation Open Market - This week, 1.6632 trillion yuan of reverse repurchases in the central bank's open market will expire. Last week, the central bank conducted 1.6632 trillion yuan of reverse repurchase operations, with a net investment of 6.9 billion yuan [16]. Important News and Information - Starting from August 8, 2025, the interest income from newly issued national bonds, local government bonds, and financial bonds will be subject to value - added tax [17]. - The central bank requires steady and solid progress in the internationalization of the RMB, including expanding the use of RMB in trade and enhancing its financing currency function [19]. Bond Market Summary - China's bond market showed narrow - range fluctuations, with treasury bond futures rising and falling unevenly, and the yield of major interest - rate bonds in the inter - bank market fluctuating within 1 bp [23]. Foreign Exchange Market Express - The on - shore RMB closed at 7.2106 against the US dollar on August 4, down 176 basis points from the previous trading day [28]. Research Report Highlights - CICC Fixed Income believes that the policy focus will shift from fiscal to monetary policy in the second half of the year, and monetary policy relaxation will help reduce the fiscal interest burden [29]. - Huatai Securities believes that the policy implementation rhythm of the real estate industry is expected to accelerate, and the policy flexibility of first - tier cities may exceed expectations [29]. 4. Stock Market Important News - The new - share market of the Beijing Stock Exchange continues to be booming. The first - day increase of Dingjia Precision on July 31 was 479.12%, and the funds frozen in the online subscription exceeded 60 billion yuan for the first time [33]. - The Hong Kong Stock Exchange's IPO pricing mechanism has been reformed, with new rules taking effect on August 4, including optimizing the new - share allocation ratio and reducing the public shareholding threshold [34].

Group 1 - The People's Bank of China and financial management departments have implemented multiple measures to promote high-level financial openness and enhance the competitiveness of the financial system [1] - The construction and development of the Cross-Border Interbank Payment System (CIPS) is being continuously promoted, with significant progress in cross-border payment scenarios involving digital currency and bilateral currency swaps [1][2] - As of June, the custody balance of foreign institutions in China's bond market reached 4.3 trillion yuan, with foreign investment in domestic stocks and funds increasing by 10.1 billion USD [2] Group 2 - The focus for the next phase of financial openness includes advancing the internationalization of the renminbi, enhancing its financing functions, and developing the offshore renminbi market [3] - The issuance of panda bonds has been active, with 111.2 billion yuan issued in the interbank market this year, and foreign government institutions accounting for 50% of the issuance [2] - The People's Bank of China has signed bilateral currency swap agreements with 32 countries and regions, with an outstanding balance of 81.8 billion yuan in use [2]

Core Insights - The Panda bond market is showing strong growth momentum in 2025, with the issuance scale reaching 1.1665 trillion yuan as of August 3, marking a cumulative issuance surpassing 1 trillion yuan [1] - The enthusiasm of foreign institutions for issuing renminbi-denominated bonds in China continues to rise, with a diverse range of issuers and a steady increase in the number of issuers [1] Group 1: Factors Driving Issuance - In July, 11 issuers launched a total of 16 Panda bonds, with a cumulative issuance of 21.95 billion yuan, including several record-breaking bonds [3] - The Asian Infrastructure Investment Bank issued a 2-year 2 billion yuan Panda bond with a coupon rate of 1.64%, achieving a record subscription multiple with over 30 participating institutions [3] - Morgan Stanley successfully issued a 5-year 2 billion yuan Panda bond at a rate of 1.98%, marking the first Panda bond issued by a US-based company [3] Group 2: Market Expansion and Attractiveness - The issuance by foreign government agencies, international development institutions, and multinational corporations accounted for 50% of the Panda bond market, a 27 percentage point increase from the entire year of 2024 [4] - The Panda bond market has seen issuers from five continents, reflecting the strong appeal of China's bond market to high-quality global issuers [4] - Systematic reforms, including simplified access rules and improved cross-border fund usage, have enhanced the financing efficiency for foreign issuers [4] Group 3: Future Prospects - Panda bonds, initiated in 2005, are entering a rapid expansion phase, with issuance expected to reach 154.45 billion yuan in 2023 and a record 194.8 billion yuan in 2024 [5] - The first half of 2025 saw a registration scale of 153.5 billion yuan, a 165% year-on-year increase, laying a solid foundation for annual expansion [5] - Policy support for the Panda bond market is strengthening, with recent notifications from multiple government departments optimizing management processes for eligible foreign investment enterprises [5] Group 4: Investment Characteristics - Panda bonds are considered a good hedging asset for foreign investors, with no significant default events reported and overall credit risk remaining controllable [6] - The relative independence of China's monetary policy results in lower correlation between renminbi bond yields and major global bond yields, enhancing the hedging characteristics of Panda bonds for foreign investors [6]

Group 1: Monetary Policy and Economic Support - The People's Bank of China emphasizes the continuation of a moderately loose monetary policy to support economic growth, including lowering the reserve requirement ratio and utilizing various monetary policy tools to maintain ample liquidity [1] - The central bank plans to reduce policy interest rates and structural monetary policy tool rates to lower financing costs in the financial market [1] Group 2: Currency Internationalization - The People's Bank of China aims to cautiously advance the internationalization of the Renminbi, enhancing its use in trade and optimizing policies for domestic enterprises listed abroad [2] - Development of the offshore Renminbi market is prioritized to create stable liquidity supply channels [2] Group 3: Taxation on Bond Interest - Starting from August 8, 2025, the Ministry of Finance and the State Taxation Administration will reinstate VAT on interest income from newly issued government bonds, local government bonds, and financial bonds [3] - Interest income from bonds issued before this date will remain exempt from VAT until maturity [3] Group 4: Digital Transformation in Manufacturing - Eight departments have released a plan for the digital transformation of the machinery industry, aiming for widespread application of smart technologies by 2027, with 50% of enterprises achieving a maturity level of two or above in smart manufacturing [4] - By 2030, the goal is for major enterprises to complete a round of digital transformation, with 60% achieving a maturity level of two or above [4] Group 5: Financial Services for SMEs - The People's Bank of China in Guangdong has issued a plan to enhance financial services for the digital transformation of small and medium-sized enterprises, focusing on four areas and fifteen measures [5] - The plan includes strengthening financial support for digital transformation and improving the quality of financial services in key sectors [5] Group 6: Robotics and AI Development - The 2025 World Robot Conference will showcase over 1,500 exhibits from more than 200 domestic and international robotics companies, with over 100 new products being launched, nearly double the number from the previous year [9] - China is recognized as a global leader in humanoid robotics, with significant advancements in core technologies and a substantial increase in industrial robot market sales [10] Group 7: Neuromorphic Computing - Zhejiang University has announced a breakthrough in neuromorphic computing with the launch of the "Wukong" computer, featuring over 2 billion pulse neurons and a power consumption of approximately 2000 watts [11] - This development represents a significant step towards creating low-power, high-efficiency computing systems modeled after the human brain [11]

Core Viewpoint - The People's Bank of China (PBOC) is committed to implementing monetary policy measures to support economic growth, enhance financial services, and manage financial risks effectively in the second half of 2025 [1][2]. Group 1: Monetary Policy - The PBOC will continue to implement a moderately loose monetary policy, utilizing various tools to maintain ample liquidity and guide financial institutions to ensure reasonable credit growth [2][3]. - The aim is to align the growth of social financing and money supply with economic growth and price level expectations [2]. Group 2: Support for the Real Economy - The PBOC emphasizes enhancing financial services for the real economy, particularly focusing on technology innovation and financing for small and medium-sized enterprises [3]. - There will be increased support for key sectors to resolve structural contradictions and promote industrial upgrades [3]. Group 3: Financial Risk Management - The PBOC is focused on preventing and mitigating financial risks in key areas, including supporting local government financing platform debt management [3][4]. - Enhanced risk monitoring and macro-prudential management will be prioritized [3]. Group 4: Internationalization of the Renminbi - The PBOC aims to promote the international use of the Renminbi, enhancing its financing capabilities and optimizing cross-border capital management [3][4]. - Development of the offshore Renminbi market and support for clearing institutions will be accelerated [4]. Group 5: Financial Market Reform and Opening - The PBOC plans to advance reforms in the bond market and expand the issuance of technology innovation bonds [3][4]. - Revisions to financial market regulations and the facilitation of cross-border investment will be pursued [4]. Group 6: International Financial Cooperation - The PBOC will deepen bilateral and multilateral international monetary cooperation and participate actively in global financial governance [4]. - Efforts will be made to reform the International Monetary Fund's quota system and improve governance structures of international financial organizations [4]. Group 7: Financial Management and Service Improvement - The PBOC will enhance financial management and service levels through legislative initiatives and the establishment of a secure cross-border payment system [4]. - The focus will also be on the construction and promotion of digital currency infrastructure [4].

Industry News - The implementation plan for the digital transformation of the machinery industry has been issued by eight departments, aiming to establish no less than 200 excellent smart factories by 2027, with 50% of enterprises achieving a maturity level of two or above in intelligent manufacturing capabilities [6] - The average commission rate for A-shares in Shanghai reached a new low of 0.201‰ in the first half of 2025, marking an 8.2% decrease compared to the same period in 2024 [4] - New mandatory product certification rules for mobile power supplies, lithium-ion batteries, and battery packs will be implemented starting August 15, 2025 [4] Company News - China Shenhua announced plans to issue shares and pay cash to acquire assets while raising matching funds, leading to a stock suspension starting August 4 [9] - Ideal Auto reported a significant increase in July deliveries, reaching 50,129 units, a year-on-year growth of 126.9%, while Xiaopeng Motors also saw a record high with 36,717 units delivered, up 229.45% year-on-year [6] - Hikvision disclosed its semi-annual report, showing a revenue of 41.818 billion yuan in the first half of the year, a year-on-year increase of 1.48%, and a net profit of 5.657 billion yuan, up 11.71% [10] - Ninebot Company reported a revenue of 11.742 billion yuan in the first half of 2025, reflecting a year-on-year growth of 76.14%, with a net profit of 1.242 billion yuan, up 108.45% [10]

Core Insights - 华夏基金（香港） has been focusing on innovative financial products and positioning itself as a differentiated Chinese institution in the market [1][3] - The CEO, 甘添, believes that the new technology revolution is reshaping the financial industry, providing strategic opportunities for asset management institutions in Hong Kong [1][3] - The offshore RMB bond market is expected to experience explosive growth in the next three to five years, with 华夏香港 already taking the lead in this area [1][5] Company Strategy - 华夏香港 has launched several innovative products, including the first RMB-denominated public fund in Hong Kong and the largest offshore RMB money market ETF, which has grown to a scale of 4.97 billion RMB within two years [3][4] - The company has also introduced the first pure Hong Kong stock biotech ETF and the largest ESG broad-based ETF in Asia (excluding Japan), showcasing its commitment to differentiation in the ETF market [4] Market Outlook - 甘添 predicts that the offshore RMB funds pool could reach approximately 5 trillion RMB by 2030, driven by the internationalization of the RMB and the growth of the dim sum bond market [6][8] - The dim sum bond market has seen significant growth, with the market size increasing from 254 billion RMB in 2020 to nearly 1 trillion RMB currently, indicating a strong demand for these bonds [6][7] Investment Trends - The yield on dim sum bonds is currently more attractive compared to domestic bonds, leading to increased interest from domestic investors facing asset allocation challenges [7][8] - Major domestic enterprises are increasingly using dim sum bonds to replace USD-denominated bonds, reflecting a shift in financing strategies [7][8] Regulatory Environment - The Chinese government is actively supporting the internationalization of the RMB, which is expected to enhance the development of the offshore RMB market [6][8] - Recent policy optimizations, such as the cross-border wealth management connect, are facilitating domestic investors' access to offshore RMB assets, providing a stable funding source for the offshore market [8][9]

Core Viewpoint - 华夏基金（香港） is positioning itself as a differentiated Chinese financial institution, focusing on innovative financial products and capitalizing on emerging market opportunities, particularly in the offshore RMB bond market [1][3][7]. Group 1: Company Strategy and Innovation - 华夏基金（香港） has adopted a forward-looking approach, launching several innovative products, including the first RMB-denominated public fund in Hong Kong, which targets investment-grade bonds [3][7]. - The company has successfully launched the largest offshore RMB money market ETF globally, with a scale of 4.97 billion RMB, demonstrating its ability to identify and capitalize on market trends [3][4]. - The firm has also introduced the first pure Hong Kong stock biotechnology ETF, which has gained significant traction among both domestic and international investors [4][5]. Group 2: Market Outlook and Growth Potential - 甘添, CEO of 华夏基金（香港）, predicts explosive growth in the offshore RMB bond market over the next three to five years, with the offshore RMB fund pool expected to reach approximately 5 trillion RMB by 2030 [1][7]. - The point bond market has seen substantial growth, with its scale increasing from 254 billion RMB in 2020 to nearly 1 trillion RMB currently, driven by attractive yields compared to domestic bonds [8][9]. - The company anticipates that the increasing participation of domestic institutions in the offshore RMB market will be fueled by favorable policies and the growing appeal of point bonds [9][10]. Group 3: Regulatory and Market Dynamics - The Chinese government is actively supporting the internationalization of the RMB, which is expected to enhance the development of the offshore RMB market and create a stable liquidity supply channel [7][9]. - Recent policy changes, such as the relaxation of cross-border investment channels, are expected to facilitate domestic investors' access to offshore RMB assets, further boosting market growth [9][10]. - The shift in the Hong Kong stock market's pricing power, with increasing domestic investment, indicates a changing landscape where local investors are becoming more influential [10][11].

Core Insights - The "2025 International Currency Forum" held by Renmin University of China and Nankai University focused on the complexities and impacts of geopolitical economic risks in the current global landscape [1][3] - The forum emphasized the need for effective identification, assessment, and response to geopolitical economic risks to ensure national economic security and support high-quality development in China [3] Group 1: Geopolitical Economic Risks - Geopolitical economic risks are characterized by their complexity, interconnectivity, and suddenness, influenced by geopolitical conflicts, unilateralism, and protectionism [3] - The core features of geopolitical economic risks involve the use of economic means with diverse objectives, which can be either economic or political [6] - The long-term structural contradictions of geopolitical economic risks necessitate international cooperation and reform of the international monetary system to enhance resilience and inclusivity [7] Group 2: Measurement and Analysis - A team from Nankai University developed a Geopolitical Economic Risk Index based on national newspaper data from 1979 to June 2025, showing a significant increase in risk post-2018 due to events like the US-China trade friction [9][10] - The index has been validated against existing indices, demonstrating its comprehensive nature and relevance in assessing the impact of geopolitical economic risks on macroeconomic indicators [9][10] Group 3: Macroeconomic Impacts - Geopolitical economic risks negatively affect China's macroeconomy, with significant adverse spillover effects on industrial output, consumer confidence, and inflation [12][13] - The research indicates that a one standard deviation increase in geopolitical economic risk leads to a contraction in industrial output and a decline in consumer confidence, highlighting the demand shock nature of these risks [12][13] Group 4: International Trade and Investment - Geopolitical economic risks are reshaping global trade and investment systems, leading to a decline in bilateral trade volumes and prompting companies to diversify production bases and export markets [18][19] - The rise in trade barriers has reached historical peaks, significantly altering international trade dynamics, particularly in US-China trade relations [18][19] Group 5: Financial Systems and Currency Dynamics - The forum discussed the implications of financial sanctions and geopolitical risks on global payment systems, emphasizing the need for countries to seek alternatives to the SWIFT system [22][23] - The evolution of international reserve currency dynamics is influenced by geopolitical economic risks, with a notable trend towards diversification away from the US dollar [25][26] Group 6: Renminbi Internationalization - The rise in geopolitical economic risks has positively influenced the internationalization of the Renminbi, particularly in trade and investment, while maintaining its role as a supplementary option rather than a direct replacement for traditional currencies [28][29] - The forum highlighted the importance of stabilizing the Renminbi's value and enhancing market confidence to support its internationalization efforts [29]