Industry Overview Upstream - Non-metallic: Glass prices continue to rebound [3] - Non-ferrous metals: Prices fluctuate [3] Midstream - Chemical industry: The operating rate of PX has declined [3] Downstream - Real estate: The sales of commercial housing in third-tier cities have seasonally declined [4] - Services: The number of domestic flights during the summer vacation has increased [4] Meso-level Event Overview Production Industry - Sino-US talks have postponed trade conflicts. From July 28th to 29th, the Chinese and US economic and trade leaders held talks in Stockholm, Sweden. According to the consensus, the suspension of the 24% US reciprocal tariffs and China's countermeasures will be extended for 90 days [1] - NVIDIA co-founder and CEO Huang Renxun believes that the wealth creation ability of artificial intelligence (AI) will exceed that of the Internet in the next 5 years [1] Service Industry - The International Monetary Fund (IMF) has raised its forecast for the global economic growth rate for this year and next year to 3.0% and 3.1% respectively. It has also significantly raised China's economic growth rate for this year to 4.8% [2] Industry Credit Spread Tracking | Industry | Last Year | Quarterly | One Month Ago | Last Week | This Week | Quantile | | --- | --- | --- | --- | --- | --- | --- | | Agriculture, Forestry, Fishing and Hunting | 85.59 | 77.83 | 57.09 | 47.35 | 49.07 | 0.70 | | Mining | 33.06 | 46.36 | 37.35 | 27.48 | 31.05 | 2.00 | | Chemicals | 68.16 | 62.06 | 49.18 | 42.09 | 44.87 | 1.00 | | Steel | 37.13 | 55.10 | 47.48 | 37.99 | 41.94 | 6.50 | | Non-ferrous Metals | 39.26 | 56.54 | 49.42 | 40.23 | 42.58 | 5.30 | | Electronics | 52.58 | 70.94 | 54.62 | 43.31 | 42.35 | 0.00 | | Automobiles | 57.44 | 50.32 | 39.92 | 29.66 | 34.14 | 1.20 | | Household Appliances | 36.95 | 47.58 | 47.10 | 39.12 | 43.09 | 8.10 | | Food and Beverage | 36.18 | 45.25 | 37.12 | 28.44 | 30.25 | 0.50 | | Textile and Apparel | 44.99 | 53.41 | 52.65 | 39.28 | 42.30 | 1.20 | | Light Industry Manufacturing | 47.59 | 167.09 | 146.32 | 132.29 | 133.75 | 7.70 | | Medicine and Biology | 52.07 | 71.30 | 53.47 | 43.92 | 46.74 | 0.90 | | Public Utilities | 25.15 | 33.57 | 27.41 | 20.28 | 23.82 | 2.80 | | Transportation | 26.46 | 36.88 | 30.25 | 23.79 | 26.92 | 4.50 | | Real Estate | 207.49 | 126.20 | 100.80 | 86.02 | 88.85 | 0.70 | | Commercial Trade | 39.88 | 50.24 | 42.17 | 32.90 | 36.79 | 1.50 | | Leisure Services | 73.88 | 119.48 | 118.95 | 105.46 | 105.42 | 85.50 | | Banks | 23.36 | 19.80 | 18.64 | 13.86 | 16.79 | 4.10 | | Non-bank Finance | 25.43 | 34.18 | 30.08 | 23.84 | 26.46 | 5.10 | | Comprehensive | 69.95 | 49.74 | 41.37 | 32.62 | 36.37 | 1.70 | | Building Materials | 33.33 | 46.19 | 37.31 | 24.78 | 28.14 | 0.70 | | Building Decoration | 37.97 | 54.48 | 51.32 | 42.89 | 46.49 | 9.90 | | Electrical Equipment | 53.97 | 79.25 | 72.51 | 66.34 | 69.49 | 29.00 | | Machinery and Equipment | 28.21 | 44.64 | 44.40 | 36.28 | 40.18 | 15.10 | | Computers | 66.65 | 61.96 | 46.60 | 33.72 | 36.84 | 1.00 | | Media | 240.02 | 45.79 | 37.92 | 29.70 | 34.29 | 1.30 | | Communications | 27.80 | 29.18 | 29.10 | 24.15 | 27.79 | 6.60 | [48] Key Industry Price Index Tracking | Industry Name | Index Name | Frequency | Unit | Update Time | Value | YoY | 5-Day Trend | | --- | --- | --- | --- | --- | --- | --- | --- | | Agriculture | Corn Spot Price | Daily | Yuan/ton | 7/29 | 2332.9 | -0.24% | - | | | Egg Spot Price | Daily | Yuan/kg | 7/29 | 6.8 | 3.03% | - | | | Palm Oil Spot Price | Daily | Yuan/ton | 7/29 | 9032.0 | 0.42% | - | | | Cotton Spot Price | Daily | Yuan/ton | 7/29 | 15557.5 | 0.05% | - | | | Average Wholesale Price of Pork | Daily | Yuan/kg | 7/29 | 20.5 | -1.16% | - | | Non-ferrous Metals | Copper Spot Price | Daily | Yuan/ton | 7/29 | 79043.3 | -0.91% | - | | | Zinc Spot Price | Daily | Yuan/ton | 7/29 | 22562.0 | -0.91% | - | | | Aluminum Spot Price | Daily | Yuan/ton | 7/29 | 20676.7 | -1.30% | - | | | Nickel Spot Price | Daily | Yuan/ton | 7/29 | 122683.3 | -1.39% | - | | | Lead Spot Price | Daily | Yuan/ton | 7/29 | 16850.0 | 0.26% | - | | | Rebar Spot Price | Daily | Yuan/ton | 7/29 | 3371.0 | 2.24% | - | | Ferrous Metals | Iron Ore Spot Price | Daily | Yuan/ton | 7/29 | 789.7 | -1.15% | - | | | Wire Rod Spot Price | Daily | Yuan/ton | 7/29 | 3555.0 | 1.64% | - | | | Glass Spot Price | Daily | Yuan/square meter | 7/29 | 16.1 | 8.81% | - | | Non-metals | Natural Rubber Spot Price | Daily | Yuan/ton | 7/29 | 15066.7 | -0.28% | - | | | China Plastic City Price Index | Daily | - | 7/29 | 812.3 | -0.29% | - | | | WTI Crude Oil Spot Price | Daily | US dollars/barrel | 7/29 | 66.7 | 1.15% | - | | Energy | Brent Crude Oil Spot Price | Daily | US dollars/barrel | 7/29 | 70.0 | 1.20% | - | | | Liquefied Natural Gas Spot Price | Daily | Yuan/ton | 7/29 | 4152.0 | -1.14% | - | | | Coal Price | Daily | Yuan/ton | 7/29 | 768.0 | 1.59% | - | | | PTA Spot Price | Daily | Yuan/ton | 7/29 | 4863.3 | 0.96% | - | | Chemicals | Polyethylene Spot Price | Daily | Yuan/ton | 7/29 | 7453.3 | 0.88% | - | | | Urea Spot Price | Daily | Yuan/ton | 7/29 | 1817.5 | -0.95% | - | | | Soda Ash Spot Price | Daily | Yuan/ton | 7/29 | 1315.0 | 5.20% | - | | | National Cement Price Index | Daily | - | 7/29 | 130.1 | -0.53% | - | | Real Estate | Building Materials Comprehensive Index | Daily | Points | 7/29 | 117.6 | 0.72% | - | | | National Concrete Price Index | Daily | Points | 7/29 | 94.1 | -0.82% | - | [49]

Group 1 - In Q2 2025, actively managed equity public funds continued to increase their holdings in Hong Kong stocks, with the proportion of Hong Kong stocks in their portfolios rising to 20% [1] - The concentration of holdings among actively managed public funds decreased, indicating a shift towards mid and small-cap stocks in Hong Kong [1] - The investment strategy involved increasing allocations to both growth assets like pharmaceuticals and consumer sectors, as well as dividend-paying assets such as non-bank financials and banks [1] Group 2 - Passive index funds also saw continued inflows into Hong Kong stocks, with approximately 280 billion yuan flowing in during Q2 2025, although at a slower rate compared to Q1 [2] - The total inflow through the Hong Kong Stock Connect for public funds in the first half of 2025 reached nearly 200 billion yuan, with a projected total for the year between 300 billion and 450 billion yuan [2] - The potential for further inflows remains significant, with an estimated theoretical allocation space of about 300 billion yuan for actively managed public funds [2] Group 3 - The momentum for southbound capital inflows is recovering, suggesting that Hong Kong stocks may outperform A-shares in the second half of the year [3] - The technology sector in Hong Kong is expected to become a key focus, driven by advancements in AI and easing of trade restrictions between China and the US [3] - Other sectors such as high-dividend stocks, new consumption, and innovative pharmaceuticals are also highlighted as areas of interest for investment in the latter half of the year [3]

Group 1 - The average annual growth rate of medical insurance fund expenditure is 9.1%, indicating a continuous improvement in the保障水平 [7] - As of the end of June, the cumulative installed power generation capacity in the country has increased by 18.7% year-on-year [12] - In the first half of the year, the proportion of 5G base stations and gigabit users in the country has exceeded 30% [13] Group 2 - The central budget investment of 735 billion yuan has been basically allocated for this year [8] - The first "East, Central, and West School-Enterprise Employment Promotion" event has been held [14] - The first deep-sea green intelligent technology test ship in the country has been delivered [15]

Core Insights - Public funds continued to increase their holdings in Hong Kong stocks in Q2 2025, with the market value of Hong Kong stocks in the sample of actively managed equity funds rising to 20.0%, up from 19.2% in Q1 2025 [6][10] - The increase in holdings was primarily in small and medium-sized Hong Kong stocks, with the Hang Seng Small Cap Index's component stocks' market value share in the total Hong Kong stock holdings of funds increasing by 5.6 percentage points [6][10] - Sector-wise, public funds mainly increased their positions in the pharmaceutical, light manufacturing, non-bank financials, and banking sectors, corresponding to themes of innovative drugs, new consumption, and dividends [6][10] Fund Holdings Analysis - The report indicates a significant shift in fund holdings, with a reduction in the technology sector, particularly in internet and automotive stocks, which had previously seen substantial gains [6][10] - The technology sector's market value share in fund holdings decreased by 3.7 percentage points, while the media and retail sectors also saw declines [10][12] - Conversely, the consumer sector saw an increase of 3.8 percentage points in market value share, indicating a strategic pivot towards consumer-related investments [10][12] Specific Stock Movements - Notable changes in specific stock holdings include Tencent Holdings decreasing from 21.5% to 17.8%, while Alibaba's share dropped from 10.6% to 6.3% [12] - In contrast, stocks like Kuaishou and Pop Mart saw increases in their holdings, reflecting a shift towards emerging consumer brands [12] - The report highlights a significant increase in holdings for companies like Xinda Biopharmaceuticals, which rose from 1.2% to 3.5%, indicating a growing interest in innovative healthcare solutions [12]

Group 1: Internet Development in China - As of June, China's internet user base reached 1.123 billion, with an internet penetration rate of 79.7% [1] - The number of "silver-haired" internet users aged 60 and above is 161 million, while rural internet users stand at 322 million, showing stable growth [1] - The report highlights that China's internet development is at a higher level globally, with significant advancements in accessibility and application richness [1] Group 2: Information Infrastructure - The Ministry of Industry and Information Technology (MIIT) is promoting the deployment of 10G optical networks and has achieved over 4.55 million 5G base stations, with over 90% of administrative villages having 5G access [1][2] - Mobile internet traffic has seen double-digit growth for six consecutive months, indicating a robust increase in data consumption [1] Group 3: Digital Inclusion Efforts - The internet penetration rate among the elderly population is 52%, while rural areas have a penetration rate of 69.2%, reflecting a 1.9 percentage point increase compared to December 2024 [2] - The government and enterprises are making efforts to balance digital dividends and the digital divide, which is crucial for fostering new economic growth points [2] Group 4: Artificial Intelligence Advancements - By the first half of 2025, China's generative AI products have seen significant advancements in technology and application, with 346 generative AI services registered by March [3] - DeepSeek, a generative AI application, gained over 30 million daily active users within 20 days of launch, topping the app markets in 140 countries [3] Group 5: AI Market Growth - As of June, 80.9% of users utilized generative AI products for answering questions, indicating high engagement [4] - The AI industry in China is projected to exceed 700 billion yuan in 2024, maintaining a growth rate of over 20% for several years [4] - Domestic AI products are achieving breakthroughs in various fields, contributing to a comprehensive intelligent application ecosystem [4]

Group 1: Fund Performance and Trends - The Dachen Insight Advantage Mixed Fund announced a successful launch with a total issuance scale of 2.46 billion, making it the largest actively managed equity fund launched in 2023 [1] - The Huashang Zhiyuan Return Mixed Fund also launched with a scale of 2.082 billion, setting a record for similar products this year [1] - The total issuance scale of actively managed equity funds reached 56.964 billion, reflecting a year-on-year growth of 28.01% compared to the same period in 2024 [1] Group 2: ETF Market Developments - The first batch of Sci-Tech Bond ETFs saw significant inflows, with the Huaxia ETF surpassing 14.2 billion in scale and experiencing a net inflow of approximately 11.1 billion on its first trading day, marking a 378% increase [2] - The Penghua Sci-Tech Bond ETF also reported a trading volume of 18.361 billion, with a turnover rate of 612.17%, bringing its scale to over 10.9 billion [2] - Among the four Sci-Tech Bond ETFs listed on the Shenzhen Stock Exchange, two have exceeded 10 billion in scale, namely the Jiashi and Fuguo Sci-Tech Bond ETFs [2] Group 3: Fund Liquidation - A total of 50 actively managed equity funds have been liquidated this year, including several initiated funds [3] - In July alone, six actively managed equity funds entered liquidation, triggered by the automatic termination of fund contracts without the need for a shareholder meeting [3] - Notable liquidated funds include those focused on popular sectors such as artificial intelligence and healthcare [3] Group 4: Floating Fee Rate Funds - The first batch of floating management fee funds has seen a total issuance scale of 24.762 billion, with 25 products announced as established [4] - A second batch of 11 floating fee rate funds has been submitted for approval, focusing on sectors like high-end equipment and healthcare [4] Group 5: Fund Manager Adjustments - Fund manager Liu Gesong has made significant adjustments in the second quarter, reducing holdings in the new energy vehicle supply chain and semiconductor equipment companies while increasing positions in new consumption, internet, and military industries [5] - Liu emphasized the importance of monitoring domestic and international economic developments and policy impacts on industries [5] Group 6: Portfolio Insights - Gao Nan, Chief Equity Investment Officer at Yongying Fund, has concentrated investments in TMT and innovative pharmaceutical sectors in his second-quarter report [6] - The top ten holdings of Gao's flagship fund include companies like Pop Mart, Zhongji Xuchuang, and Kangfang Biotech, with notable new additions and increased stakes in several stocks [7] Group 7: Market Overview - On July 18, the market showed mixed performance, with the Shanghai Composite Index rising by 0.5% and total trading volume reaching 1.57 trillion, an increase of 31.7 billion from the previous trading day [8] - Sectors such as rare metals and energy metals performed well, while gaming and consumer electronics sectors experienced declines [8]

Global Market Insights - 34% of investors believe shorting the US dollar is the most crowded trade, an increase from June, marking the first occurrence of this sentiment [15] - Cash levels have dropped to a historical low of 3.9% in July [6] - Nearly half of the respondents expect the Federal Reserve to cut interest rates twice this year, with 26% anticipating that Bostic will become the next Fed Chair [8] - The market expects the final tariff level from the US on other markets to be 14%, slightly up from 12% in June [13] - Global investors have reached a new high in their overweight positions in the euro and European stocks [16] Asia Market Insights - The proportion of investors who believe China's economy will weaken in the next 12 months remains at 10%, unchanged from June [22] - There is an increasing willingness among investors to seek opportunities in markets outside of China compared to June [27] - Investors are more optimistic about Japan's economy, with a notable increase in those expecting improvement [29] - In the Asia-Pacific region, the proportion of investors optimistic about Japan has decreased from 45% to 32%, while those favoring South Korea increased from 5% to 16%, and India from 17% to 10%; however, China's sentiment has worsened from -5% to -13% [32] - Within the Chinese market, the most favored sectors by foreign investors are AI, dividends (now second), and internet, with consumer sectors still not favored [34]

Core Viewpoint - The central urban work conference emphasizes the need to innovate urban governance concepts, models, and methods, leveraging digital technologies such as the internet, big data, cloud computing, artificial intelligence, and blockchain to transform and upgrade urban governance [1][2]. Group 1: Internet-Driven Governance - Internet technology supports the construction of an interconnected governance network, facilitating the transition of offline services to online platforms, with new governance service models like "no-contact approval" and "one-stop processing" becoming widely adopted [1]. - By May 2025, over 1.08 billion users are expected to be registered on the national integrated government service platform, with more than 90% of provincial administrative licensing matters processed online [1]. Group 2: Big Data-Driven Governance Innovation - Big data technology enables the creation of a "holographic map" of urban operations, enhancing scientific, precise, and holistic governance [2]. - The city of Fuzhou has improved its emergency response efficiency for drainage and flood control by over 50% since 2017, thanks to a foundational map covering key water systems [2]. Group 3: Artificial Intelligence in Governance - Various AI models are deeply integrated into urban governance, transforming the underlying logic of digital development and information systems [2]. - The introduction of 70 "AI civil servants" in Shenzhen's Futian District has led to a 90% reduction in document review time and an overall efficiency increase of over 20% [2]. Group 4: Blockchain-Driven Governance Structure Optimization - Blockchain technology introduces a new trust mechanism for data and information exchange, ensuring data integrity and traceability through a consensus mechanism [3]. - The shift in urban governance models towards cross-regional and cross-spatial collaboration is necessary to address increasing risks and challenges [3]. Group 5: Strategies for Urban Governance Modernization - The integration of smart technologies is essential for enhancing urban governance efficiency, focusing on key areas such as urban planning, community governance, traffic management, and ecological environment [4]. - Emphasizing grassroots governance, the need for collaborative efficiency is highlighted, with a focus on integrating resources from various departments to enhance community participation [4]. - The development of a blockchain-based government application platform is crucial for advancing urban governance from data sharing to value trust [4][5].

Core Viewpoint - The article emphasizes that the internet is the key technology driving the advancement of artificial intelligence, rather than focusing solely on model architectures like Transformers [1][5][55]. Group 1: Importance of the Internet - The internet provides a rich and diverse data source that is essential for training AI models, enabling scalable deployment and natural learning pathways [1][5][54]. - Without the internet, even advanced models like Transformers would lack the necessary data to perform effectively, highlighting the critical role of data quality and quantity [28][30]. Group 2: Critique of Current Research Focus - The article critiques the current emphasis on optimizing model architectures and manual dataset creation, arguing that these approaches are unlikely to yield significant improvements in model capabilities [1][19][55]. - It suggests that researchers should shift their focus from deep learning optimizations to exploring new methods of data consumption, particularly leveraging the internet [16][17]. Group 3: Data Paradigms - The article outlines two main paradigms in data consumption: the compute-bound era and the data-bound era, indicating a shift in focus from algorithmic improvements to data availability [11][13]. - It argues that the internet's vast array of sequence data is perfectly suited for next-token prediction, which is a fundamental aspect of many AI models [17][22]. Group 4: Role of Reinforcement Learning - While reinforcement learning (RL) is seen as a necessary condition for achieving advanced AI, the article points out the challenges in obtaining high-quality reward signals for RL applications [55][61]. - The article posits that the internet serves as a complementary resource for next-token prediction, which is crucial for RL to thrive [55][56]. Group 5: Future Directions - The article calls for a reevaluation of how AI research is conducted, suggesting that a collaborative approach between product development and research could lead to more meaningful advancements in AI [35][54]. - It emphasizes the need for diverse and economically viable data sources to support the development of robust AI systems, indicating that user engagement is vital for data contribution [51][54].

Core Viewpoint - The article highlights the significant yet often overlooked contributions of Indian inventor Nasir Ahmed, particularly his development of the DCT algorithm, which has become foundational in digital image and video compression, impacting global communication and technology [1][9]. Group 1: Historical Context of Indian Software Industry - In the late 20th century, India's software industry was highly regarded, with companies like InfoSys setting the standard for software outsourcing and achieving high CMM certification levels [1][2]. - During the early days of software outsourcing, Indian firms were seen as leaders, while Chinese companies were still learning from them [1][2]. Group 2: Development of DCT Algorithm - Nasir Ahmed conceived the idea of image compression in 1972 while working as a professor in the U.S., despite facing financial challenges and skepticism from peers [2][3]. - The DCT algorithm allows for significant image size reduction (up to 10:1) while maintaining visual quality, revolutionizing how images are stored and transmitted [6][7]. Group 3: Impact of DCT on Digital Communication - The DCT algorithm became integral to various digital formats, including JPEG for images and MP3 for audio, enabling efficient data transmission over the internet [7][8]. - Without DCT, modern digital communication, including video calls and social media sharing, would not be feasible, highlighting its critical role in the digital age [8][9]. Group 4: Recognition and Legacy - Despite the widespread use of DCT, Nasir Ahmed remained relatively unknown and did not seek patents or commercialize his invention, focusing instead on academia [9][10]. - The article emphasizes the importance of foundational innovations like DCT, which, while not always recognized, have profound effects on global connectivity and technology [10][11]. Group 5: Indian Innovation Culture - The article discusses the Indian approach to innovation, which often emphasizes deep technical research over quick financial gains, as exemplified by Ahmed's work on DCT and the invention of USB [10][11]. - This culture of perseverance and focus on foundational technology has led to significant contributions to the digital world, despite the perception of India as primarily a service-oriented economy [11][13].