Core Viewpoint - The resignation of Zong Fuli from Wahaha Group's leadership has sparked discussions about the internal family conflict and the future of this iconic Chinese enterprise, highlighting issues related to offshore trusts, equity arrangements, and the transition of mixed-ownership enterprises in China [1] Group 1: "National Stock Private" Model - The ideal "National Stock Private" model involves the state allocating funds based on asset management plans' historical performance, decentralizing investment decisions to competing market institutions [2][3] - Implementing the "National Stock Private" model can potentially break the bottleneck of economic growth, transcending family interests and impacting the trajectory of Chinese enterprises and the economy [3] Group 2: Economic Challenges and Demand Shortage - Demand shortage has been a persistent issue since the industrial era, with various economic theories attempting to address it, yet fiscal policies have often led to increased national debt without the expected economic recovery [4][5] - The current economic landscape in China shows signs of demand shortage, with declining investments and a lack of private sector confidence attributed to policy risks in sectors like real estate and education [5][6] Group 3: Capital Return Rates and Investment Dynamics - The return rate on physical assets in China has decreased from 7% in 2001 to 4.2% in 2023, indicating a weakening profitability of physical assets [6][7] - The overall capital return rate is influenced by the distribution of capital and the economic growth rate, with a historical trend showing that capital return rates tend to decline when capital growth outpaces economic growth [8][9] Group 4: Implications of Wealth Concentration - Wealth concentration among high-income groups leads to a mismatch in demand, where those with capital do not consume enough, resulting in unsold goods and economic stagnation [10][11] - Historical patterns suggest that when wealth becomes overly concentrated, it can lead to social unrest and economic crises, necessitating interventions to redistribute wealth [13][14] Group 5: Future of Corporate Governance - As the founding generation of companies ages, the next generation may lack the management skills needed, leading to a shift from management to mere ownership, which could necessitate changes in governance structures to protect minority shareholders [24][25] - The "National Stock Private" model aims to create a more equitable management structure that aligns the interests of large shareholders, small shareholders, and public shareholders, ultimately benefiting all investors [25][26]

Core Viewpoint - The article contrasts the economic conditions of China in the 1980s and 1990s with the current situation, highlighting a shift from inflation and scarcity to deflation and oversupply, driven by structural issues in consumption and debt [4][11]. Economic Context - In the past, China faced severe inflation due to a lack of goods, leading to a situation where consumers had money but could not find products to buy [3][6]. - Currently, China is described as the "world's factory," producing 33% of global capacity, but is now struggling with oversupply and insufficient domestic demand [6][7]. Consumption Issues - The article identifies three major challenges affecting consumption: 1. **Income Distribution Imbalance**: Consumer spending accounts for only 33% of GDP, significantly lower than in developed countries, where it starts at 50% [7]. 2. **Debt Burden**: High levels of household debt, with a leverage ratio of 62%, are constraining consumer spending, as many individuals are burdened by mortgage repayments [9]. 3. **Aging Population**: An accelerating aging demographic is leading to reduced consumption, as older individuals typically spend less and the younger population is insufficient to drive demand [9][11]. Current Economic Phenomenon - The current deflation is attributed to a lack of consumer confidence and purchasing power, rather than a desire to buy, resulting from debt, income expectations, and pessimism about the future [11]. - The transition from a situation of scarcity to one of oversupply reflects a fundamental shift in economic dynamics, with the focus now on demand-side issues rather than supply-side constraints [11].

Report Industry Investment Rating - Crude oil: Cautiously bearish [1] - LPG: Cautiously bearish [1] - L: Bearish continuation [1] - PP: Bearish continuation [1] - PVC: Low-level oscillation [1] - PX: Cautiously bearish [1] - PTA: Cautiously bearish [2] - Ethylene glycol: Cautiously bearish [2] - Methanol: Cautiously bullish [2] - Urea: Cautiously bearish [2] - Natural gas: Cautiously bearish [4] - Asphalt: Cautiously bearish [4] - Glass: Bearish continuation [4] - Soda ash: Bearish continuation [4] Core Viewpoints - Crude oil supply is in excess, and prices are under downward pressure. LPG is affected by high warehouse receipts and weak cost, with prices trending downwards. L and PP have insufficient upward drivers due to balanced supply and demand. PVC has cost support but weak fundamentals. PX and PTA are affected by supply - demand expectations and macro factors, showing a weakening trend. Ethylene glycol has supply pressure and weak demand. Methanol's downward space may be limited. Urea has a supply - demand imbalance and inventory accumulation. Natural gas prices are affected by inventory and seasonality. Asphalt is pressured by cost and supply - demand. Glass and soda ash are affected by supply and demand in the real estate and downstream industries [1][2][4] Summary by Variety Crude Oil - **Market Review**: Overnight international oil prices fell, with WTI down 0.19%, Brent down 0.11%, and SC down 1.43% [5] - **Basic Logic**: Geopolitical risks decline, supply is in excess, and the US crude oil inventory has unexpectedly decreased, providing short - term support. In the long - term, supply may push prices down to around $60 [6] - **Strategy Recommendation**: Hold short positions. Pay attention to the $60 support level and the [470 - 480] range for SC [8] LPG - **Market Review**: On September 20, the PG main contract closed at 4,293 yuan/ton, down 1.72% [11] - **Basic Logic**: The cost of crude oil is weak, demand is weak, warehouse receipts are at a high level, supply is increasing, and inventory is rising [12] - **Strategy Recommendation**: Hold short positions. Pay attention to the [4250 - 4350] range [13] L - **Market Review**: The L2601 contract closed at 7,130 yuan/ton, with a decline [17] - **Basic Logic**: Spot prices stop falling and rebound, the basis continues to repair. Supply is abundant, and demand is strengthening, but there is insufficient upward drive [18] - **Strategy Recommendation**: Wait for a pullback to try long positions. Pay attention to the [7050 - 7200] range [18] PP - **Market Review**: The PP2601 contract closed at 6,873 yuan/ton, with a decline [22] - **Basic Logic**: The market is bearish, the basis is strengthening, cost pressure is high, supply pressure may ease, and demand is slowly increasing [23] - **Strategy Recommendation**: The industry can hedge at high prices. Do not chase short positions for absolute prices. Pay attention to the [6800 - 6950] range [23] PVC - **Market Review**: The V2601 contract closed at 4,938 yuan/ton, with a decline [27] - **Basic Logic**: Cost support improves, warehouse receipts decline, supply is strong, demand is weak, and inventory is accumulating. Exports are strong [28] - **Strategy Recommendation**: Try long positions on pullbacks. Pay attention to the [4850 - 5000] range [28] PX - **Market Review**: On September 19, the PX spot price was 6,773 yuan/ton, with a decline [31] - **Basic Logic**: Supply - demand tight balance is expected to ease, inventory is high, and macro factors are negative [31] - **Strategy Recommendation**: Hold short positions carefully and sell call options. Pay attention to the [6500 - 6580] range [32] PTA - **Market Review**: On September 19, the PTA spot price in East China was 4,555 yuan/ton, with a decline [34] - **Basic Logic**: Supply pressure may ease, the "Golden September and Silver October" consumption season is underperforming, demand is weak, and cost support exists [35] - **Strategy Recommendation**: Hold short positions carefully and look for opportunities to short at high prices. Pay attention to the [4525 - 4575] range [36] Ethylene Glycol - **Market Review**: On September 19, the ethylene glycol spot price in East China was 4,352 yuan/ton, with a decline [39] - **Basic Logic**: Supply pressure is expected to increase, demand is weak, and inventory is low, providing some support [40] - **Strategy Recommendation**: Hold short positions carefully and look for opportunities to short on rebounds. Pay attention to the [4200 - 4240] range [41] Methanol - **Market Review**: On September 19, the methanol spot price in East China was 2,299 yuan/ton, and the main contract closed at 2,361 yuan/ton [42] - **Basic Logic**: Supply pressure is still large, but demand is improving, and cost support is stabilizing [43] - **Strategy Recommendation**: Look for opportunities to go long on the 01 contract on pullbacks. Pay attention to the [2331 - 2361] range [45] Urea - **Market Review**: On September 19, the small - particle urea spot price in Shandong was 1,640 yuan/ton, and the main contract closed at 1,661 yuan/ton [47] - **Basic Logic**: Supply is strong, demand is weak, inventory is accumulating, and cost support is expected to weaken [48] - **Strategy Recommendation**: Hold short positions and sell call options [2] Natural Gas - **Basic Logic**: US natural gas inventory has increased more than expected, and prices are weakening. Cooling weather provides some support [4] - **Strategy Recommendation**: Cautiously hold short positions [4] Asphalt - **Basic Logic**: Cost is weak, supply pressure is increasing, and supply - demand is loose [4] - **Strategy Recommendation**: Hold short positions [4] Glass - **Basic Logic**: Supply is under pressure, demand is weak, and inventory is expected to increase [4] - **Strategy Recommendation**: Short - term wait - and - see, long - term short on rebounds [4] Soda Ash - **Basic Logic**: Demand is improving, supply is expected to be loose, and pay attention to downstream restocking [4] - **Strategy Recommendation**: Short on rebounds in the long - term [4]

Report Summary 1. Report Industry Investment Rating No investment rating information is provided in the report. 2. Core View This week, the SHFE tin 2510 contract experienced a tug - of - war between bulls and bears in a complex market environment, with significant price fluctuations. Positive macro data spurred active capital inflows, driving up the price [2]. 3. Summary by Directory 3.1 Futures Market - **Contract Market**: The price of the SHFE tin 2510 contract showed a pattern of first declining and then rising. In the first half of the week, it fluctuated downward due to macro - economic data and market sentiment. In the second half, with marginal improvement in macro sentiment and supply - side tightness, bullish forces strengthened, leading to a strong rebound and an overall price increase. The price fluctuated sharply, and the battle between bulls and bears was intense [3]. - **Variety Price**: The report provides detailed price data for multiple SHFE tin contracts, including opening, high, low, closing prices, trading volume, open interest, and other information. For example, the sn2510 contract had a weekly opening price of 273,340, a high of 274,900, a low of 268,010, and a closing price of 273,950 [6]. 3.2 Spot Market - **Registered Warehouse Receipts**: On September 12, the SHFE tin futures warehouse receipts were 7,326 tons, a decrease of 178 tons from the previous trading day. The cumulative decrease in SHFE tin futures warehouse receipts in the past week was 71 tons [7]. 3.3 Influencing Factors - **Industry Aspect**: On the supply side, tin ore mining in production areas such as Yunnan in China has been continuously restricted, and some smelters continued their maintenance in September, constraining the output of concentrates and supporting the spot price. On the demand side, the traditional electronic solder field was weak due to the drag of the real estate and infrastructure sectors, with lackluster demand growth for SHFE tin. The lack of demand led to light trading in the spot market and limited upward momentum for the spot price [8]. - **Macro Factors**: The year - on - year growth rate of the US PPI in August unexpectedly slowed to 2.6%, and the core PPI decreased by 0.1% month - on - month. This strengthened the market's expectation of a Fed rate cut in September, weakening the US dollar index and providing some support for the US - dollar - denominated SHFE tin price [9]. 3.4 Market Outlook Given the rigid constraints on raw materials and maintenance plans, the smelter operating rate has dropped significantly, and there are no signs of substantial improvement in the short term. Under the situation of weak supply and demand, the tin price is likely to continue to fluctuate in a high - level range [10].

Economic Growth Observation - The economic growth in China is expected to slow down, with a forecasted year-on-year growth rate of approximately 4.5% for Q3 2025 [3] - Export growth is projected to decline from 7.2% in July to 5%-6% in August due to high base effects and a pullback in prior export demand [3] - Domestic consumption remains weak, particularly in the automotive and home appliance sectors, with significant declines in sales despite government subsidies [5][7] - Infrastructure investment shows a slight recovery, but its sustainability is questioned due to reduced government bond financing [8][10] Market Sentiment - Despite the economic slowdown, market sentiment remains optimistic, supported by ample liquidity and proactive policy measures [12] - The liquidity environment has turned positive since June 2025, with significant inflows into the offshore Chinese stock market, estimated at 15-17 trillion RMB in H1 2025 [14] - There is a notable shift in residents' asset allocation from savings to capital markets, indicated by a decrease in deposits and an increase in investments in non-bank financial products [16] Policy Response - The Chinese government is addressing core challenges categorized as "3D" (de-leveraging, insufficient demand, structural transformation) through targeted policies [19] - Recent government meetings emphasized the continuity of cyclical policies and the acceleration of consumer support measures [19] - The government is also considering capacity adjustments in the refining and petrochemical sectors to address oversupply issues [19] Central Bank Stance - The central bank's recent monetary policy report indicates a focus on the quality of liquidity management rather than direct market support [20] - There has been a gradual reduction in net liquidity injections since June, with interbank market rates aligning with policy benchmark rates [20] Leverage Levels - Current leverage levels in the A-share market are deemed reasonable, with the margin financing balance exceeding 2 trillion RMB (approximately 290 billion USD) [23] - The proportion of margin financing to free-floating market value is around 4.8%, slightly below the 10-year average of 4.9% [23] - The risk of government intervention due to excessive leverage is considered low in the short term, although vigilance is advised if leverage indicators rise significantly [27]

Economic Growth Observation - The economic growth in China is expected to slow down, with Morgan Stanley predicting a year-on-year growth rate of approximately 4.5% for Q3 2025, influenced by various weakening indicators observed in August [1] - Export growth is anticipated to decline from 7.2% in July to a range of 5%-6% in August due to high base effects and a pullback in prior export demand [1] - Domestic consumption remains weak, particularly in the automotive and home appliance sectors, with significant declines in sales despite government subsidies [3] - Infrastructure investment shows a slight recovery, but its sustainability is questioned due to a decrease in net financing from government bonds [5][7] Market Sentiment - Despite the economic slowdown, market sentiment in the A-share market remains resilient, supported by ample liquidity and proactive policy measures [10] - The liquidity environment has turned positive since June 2025, indicating a shift towards a more accommodating financial landscape [10] - There is a notable shift in residents' asset allocation from savings to capital markets, as evidenced by a significant drop in household deposits and a rise in non-bank financial institution deposits [13] Policy Response - The Chinese government is addressing core challenges categorized as "3D" (de-leveraging, insufficient demand, structural transformation) through targeted policy measures [17] - Recent government meetings have emphasized the continuity of cyclical policies and the acceleration of consumer support measures to bolster domestic demand [17] - The government is also considering capacity adjustments in the refining and petrochemical sectors to tackle overcapacity issues, which may lead to the exit or upgrade of outdated production capacities [17] Central Bank Stance - The central bank's recent monetary policy report indicates a shift towards prioritizing the quality of liquidity management rather than merely injecting liquidity to support the stock market [18] - The central bank has reduced the scale of net liquidity injections since June, reflecting a recognition of the current level of liquidity [18] Leverage Levels - Current leverage levels in the A-share market are deemed reasonable, with the margin trading balance exceeding 2 trillion RMB (approximately 290 billion USD), yet remaining below historical peaks [21] - The proportion of margin trading balance to free float market value is around 4.8%, slightly below the 10-year average of 4.9% [21] - Although there has been a recent increase in the proportion of margin trading volume to daily A-share turnover, it remains significantly lower than the peaks observed in 2020 and 2015 [24]

Core Viewpoint - The article discusses the 20th anniversary of the "7·21" exchange rate reform, highlighting the significant changes in the RMB exchange rate since 1994, including a nearly 60% appreciation from 2005 to early 2022, followed by a depreciation of over 15% since 2022, indicating a deviation from reasonable valuation [1][5]. Group 1: RMB Exchange Rate Dynamics - The RMB's actual effective exchange rate has shown a trend of appreciation until 2022, but has since weakened significantly, reaching its lowest level in nearly a decade by March 2025 [1][4]. - The depreciation of the RMB is attributed to a combination of nominal effective exchange rate decline and a decrease in China's price level relative to trade partners, with the latter accounting for two-thirds of the decline [5][6]. - Despite a record trade surplus, the actual depreciation of the RMB has not been offset, indicating that lower prices have not translated into expected competitiveness in international markets [5][6]. Group 2: Economic Conditions and Policy Recommendations - Demand insufficiency is identified as the primary reason for the RMB's depreciation, exacerbated by price stickiness and market coordination failures [6][7]. - The article notes that while economic growth has shown resilience, investment growth has slowed, particularly in real estate, which has seen a significant decline [8][9]. - CF40 suggests that expanding domestic demand should be the core focus of macroeconomic policy in the second half of the year, with fiscal spending being a critical lever to stimulate total demand [10][11]. - The projected fiscal budget for 2025 indicates a significant increase in public spending, which could effectively boost total demand if achieved [10][11]. - Urban renewal is highlighted as a suitable area for government-led public investment to stimulate economic activity [12].

Core Viewpoint - The report highlights a paradox where China's trade surplus is expanding while the Renminbi (RMB) is depreciating, raising questions about the underlying economic dynamics [1][3]. Group 1: Trade Surplus and Currency Dynamics - Since 2022, despite rapid industrial upgrades and increasing export competitiveness, China's trade surplus has reached new highs, yet the actual effective exchange rate of the RMB has declined by over 15% from Q1 2022 to Q1 2025 [3]. - According to Balassa's theory, faster productivity growth in a country's trade sector typically leads to currency appreciation, a trend observed in Japan, but this has not been the case for China [3]. Group 2: Demand Insufficiency and Market Failures - Zhang Bin attributes the continuous depreciation of the RMB since 2022 primarily to insufficient demand, which also explains the expanding trade surplus and significant net capital outflows [5]. - The insufficient demand has resulted in low inflation and weak asset price expectations, indicating a market failure characterized by price stickiness and coordination failures among market participants [5]. - Individual rational behaviors, such as reduced investment by businesses and decreased consumption by households, collectively contribute to a negative spiral of income and expenditure, exerting downward pressure on demand and asset prices, leading to depreciation of the nominal and actual effective RMB exchange rates [5]. Group 3: Recommendations for Currency Valuation - Experts, including Zhang Bin, believe the RMB is undervalued and recommend timely and sufficient counter-cyclical policies to achieve a reasonable valuation of the currency [5]. - If overcoming the demand insufficiency in the short term proves challenging, maintaining a wide fluctuation range for the RMB against the USD while firmly defending the upper and lower limits of RMB exchange rate fluctuations is advised [5].

1. Report Industry Investment Rating - No specific industry investment rating is provided in the report. 2. Core Viewpoints - **Stock Index**: The A-share market is expected to continue to fluctuate. The index fundamentals depend on the domestic economic recovery process. Although the corporate profit situation in the first half of 2025 has improved significantly compared to 2024, and there is support from allocation funds, the index is difficult to break through the central level and rise significantly due to credit contraction and insufficient demand under the background of debt resolution. On the other hand, it will not experience a sharp decline in the short term [1]. - **Treasury Bonds**: The bond market is in an environment with loose funds, stable economy, and low short-term interest rate cut expectations. With insufficient upward and downward momentum, it is expected to continue the fluctuating trend in the short term [2]. 3. Summary by Relevant Catalogs 3.1 Research Views - **Stock Index**: On July 9, 2025, the A-share market fluctuated and closed down. The Wind All A index fell 0.18% with a trading volume of 1.53 trillion yuan. The CSI 1000, CSI 500, SSE 50, and SSE 300 indices also declined. The media sector led the rise, while the non-ferrous metals sector corrected. The recent Central Financial and Economic Commission emphasized the construction of a unified national market, but the impact on related themes depends on the transfer mode and scale of central fiscal incremental policies. Overseas, the Fed's interest rate cut expectation has slowed down, and the boost to domestic small-cap indices has weakened. The fundamentals of the index depend on the domestic economic recovery process, and it is expected to fluctuate [1]. - **Treasury Bonds**: On July 9, 2025, treasury bond futures closed with gains. The central bank conducted 755 billion yuan of 7-day reverse repurchase operations with a stable interest rate of 1.4%. The net withdrawal of funds was 230 billion yuan. The overall capital situation was loose, and the price index remained stable. The bond market is expected to continue to fluctuate in the short term [1][2]. 3.2 Daily Price Changes - **Stock Index Futures**: On July 9, 2025, compared with the previous day, the IH, IF, IC, and IM contracts all declined, with declines of -0.14%, -0.15%, -0.47%, and -0.35% respectively [3]. - **Stock Indices**: The SSE 50, SSE 300, CSI 500, and CSI 1000 indices also declined, with declines of -0.26%, -0.18%, -0.41%, and -0.27% respectively [3]. - **Treasury Bond Futures**: The TS, TF, T, and TL contracts all rose, with increases of 0.00%, 0.02%, 0.03%, and 0.14% respectively [3]. 3.3 Market News - From 2021 to 2024, China's economy maintained an average annual growth rate of 5.5%. The average contribution rate of domestic demand to economic growth was 86.4%, and the average contribution rate of final consumption to economic growth reached 56.2%, 8.6 percentage points higher than that during the 13th Five-Year Plan period [4]. 3.4 Chart Analysis - **Stock Index Futures**: The report presents the trend charts of the main contracts and the basis of IH, IF, IC, and IM [6][7][9]. - **Treasury Bond Futures**: The report shows the trend charts of the main contracts, spot bond yields, basis, inter - period spreads, cross - variety spreads, and capital interest rates of treasury bond futures [13][15][17]. - **Exchange Rates**: The report provides the trend charts of the central parity rates of the US dollar, euro against the RMB, forward exchange rates, and exchange rates of other currency pairs [20][21][22]

Report Industry Investment Rating - No industry investment rating is provided in the report. Core Viewpoints - The A-share market rose rapidly yesterday, with the Wind All A index up 1.56% and a trading volume of 1.45 trillion yuan. The conflict between Iran and Israel has limited direct impact on the A-share market. Given the current credit contraction and insufficient demand, the index is unlikely to break through the central level and rise significantly. However, with the improvement in corporate earnings in H1 2025 compared to 2024 and the support of allocation funds, the A-share index will not experience a sharp decline in the short term. It is expected that the index will mainly fluctuate in the future [1]. - Treasury bond futures closed lower, with the 30-year main contract down 0.27%, the 10-year main contract down 0.11%, the 5-year main contract down 0.07%, and the 2-year main contract down 0.02%. The central bank conducted 4065 billion yuan of 7-day reverse repurchase operations, with a net injection of 2092 billion yuan. The bond market lacks the momentum to strengthen significantly and is likely to remain in a range-bound pattern [1][2]. Summary by Directory Research Viewpoints - **Stock Index Futures**: The A-share market showed a significant upward trend, with multiple sectors rising. The conflict between Iran and Israel had limited direct impact on the A-share market. The domestic economy faces challenges such as credit contraction and insufficient demand, but corporate earnings have improved, leading to an expected volatile trend for the index [1]. - **Treasury Bond Futures**: Treasury bond futures closed lower. The central bank's open market operations led to a slight tightening of the capital market. Given the economic resilience and the approaching half-year end, the bond market is likely to remain range-bound [1][2]. Price Changes in Futures Contracts - **Stock Index Futures**: On June 24, 2025, IH rose 1.10%, IF rose 1.45%, IC rose 1.79%, and IM rose 2.46% compared to the previous day [3]. - **Stock Indexes**: The Shanghai Composite 50 Index rose 1.16%, the CSI 300 Index rose 1.20%, the CSI 500 Index rose 1.62%, and the CSI 1000 Index rose 1.92% [3]. - **Treasury Bond Futures**: TS fell 0.03%, TF fell 0.08%, T fell 0.12%, and TL fell 0.30% [3]. Market News - An event to commemorate the 80th anniversary of the victory of the Chinese People's War of Resistance against Japanese Aggression and the World Anti-Fascist War will be held on September 3, including a military parade, and President Xi Jinping will deliver an important speech [4]. Chart Analysis - **Stock Index Futures**: The report presents the trends and basis trends of IH, IF, IC, and IM main contracts, providing a visual reference for the performance of stock index futures [6][7][9]. - **Treasury Bond Futures**: The report includes the trends of treasury bond futures main contracts, treasury bond spot yields, basis, inter - period spreads, cross - variety spreads, and capital interest rates, helping to analyze the treasury bond futures market [13][15][17]. - **Exchange Rates**: The report shows the exchange rate trends of the US dollar against the RMB, the euro against the RMB, and other currency pairs, as well as the trends of forward exchange rates, offering insights into the foreign exchange market [20][21][22].