Core Viewpoint - The article draws a parallel between human hypothermia and economic stagnation, suggesting that just as individuals can misinterpret their physical sensations in extreme cold, markets can also misinterpret economic signals, leading to false perceptions of economic health [1][2]. Economic Data vs. Perception - Economic data often lags behind real-time events, leading to discrepancies between actual economic conditions and public perception [2]. - The case of Japan's "lost 30 years" illustrates how prolonged economic stagnation can occur despite seemingly positive data, as evidenced by Japan's CPI growth from 1991 to 2021 being only 7.5% [2][5]. Japan's Economic Stagnation - Japan's per capita GDP in 1991 was $28,666, peaking at $38,467 in 1994, but by 2024, it is projected to be only $32,420, indicating a significant decline when adjusted for inflation [5][7]. - The Nikkei 225 index peaked at 38,900 points in 1989 but fell to around 8,700 points by 2012, reflecting a long-term economic decline [7][10]. Policy Misjudgments - Japanese authorities underestimated the impact of the real estate bubble burst, leading to ineffective policy responses that failed to stimulate recovery [10][11]. - The Bank of Japan's delayed shift from tight to loose monetary policy contributed to prolonged deflation, with interest rates remaining high until 1995 [11]. Ineffective Fiscal Policies - Japan's fiscal policies oscillated between expansion and contraction, lacking coherence and effectiveness, which hindered economic recovery [11][12]. - Public works spending increased significantly in the 1990s, but much of it was directed towards low-impact projects in declining regions, resulting in wasted resources [12][14]. Lessons from Japan's Experience - Japan's experience highlights the importance of targeted investment in sectors that can drive growth, rather than indiscriminate infrastructure spending [23][27]. - The need for a coherent industrial policy to foster new industries is critical, as Japan has struggled to innovate in emerging sectors like technology and renewable energy [17][23]. Conclusion - The article emphasizes that while increasing public investment can stabilize growth, it must be strategically directed to avoid economic imbalances and ensure effective use of resources [27][28].

Group 1: Economic Overview - The rapid depreciation of cash is anticipated in the coming years due to severe monetary overexpansion in China, with M2 reaching 330.29 trillion yuan and a year-on-year growth of 8.3% as of June 2025 [1] - The current economic environment is characterized by deflation, with the CPI index showing a month-on-month increase of 0.4% and year-on-year stability [1][3] Group 2: Real Estate Market - Housing prices have been declining since 2022, with an average national price drop exceeding 30%, and some cities experiencing declines over 50% [5] - Factors contributing to the continued decline in housing prices include an aging population leading to reduced demand, an oversupply of housing with 600 million units available, and decreased household income affecting purchasing power [5][6] Group 3: Education and Employment - The value of university degrees is diminishing, with 12.22 million graduates expected in 2025, leading to increased competition for jobs and many graduates resorting to low-skill employment [8] - The disconnect between university education and practical job skills is causing employers to prefer experienced candidates over fresh graduates [8] Group 4: Automotive Industry - The automotive market is experiencing significant price reductions, with domestic mid-range cars dropping by 20,000 to 30,000 yuan and imported brands by nearly 100,000 yuan [10] - Contributing factors to the price decline include an influx of electric vehicles leading to market saturation, aggressive pricing strategies from tech companies entering the automotive sector, and reduced consumer demand from middle-class families [10]

Group 1 - The A-share market is expected to perform strongly due to factors such as a potential weakening of the US dollar and attractive valuations compared to both the US market and other emerging markets, despite reaching new highs [1] - Challenges faced by the Chinese market are diminishing, and the outlook for investment fundamentals is becoming clearer, instilling confidence for the remainder of the year [1] - Potential catalysts for the market include policy implementation and liquidity, focusing on real estate and infrastructure, fiscal measures, and a rebalancing of policy combinations to combat deflation [1] Group 2 - Southbound capital is significantly impacting the Hong Kong stock market, with nearly HKD 1 trillion injected by mainland investors this year, surpassing the total for 2024 [2] - Policies promoting stock buybacks and "market value management" are stimulating demand for high-dividend state-owned enterprises, supported by relaxed local financing conditions and lower interbank rates [2] - The technology sector, particularly AI and semiconductors, has seen substantial inflows, with the Hang Seng Tech Index rising nearly 70% this year, indicating further upside potential if stimulus measures continue [2] Group 3 - The onshore stock market is playing an increasingly important role in Chinese society, with ongoing reforms and policies supporting the market [3] - The stock market serves as a key mechanism for directing capital towards innovation-related industries, with ample liquidity in the financial system [3] - Given the current state of the real estate market, the stock market is becoming the primary investment destination for retail investors seeking higher returns [3]

1. Report Industry Investment Rating No information provided in the document about the report industry investment rating. 2. Report's Core View - The macro - environment is generally favorable for commodities. Overseas, Powell's dovish signal strengthens the market's interest - rate cut expectation, and the July S&P Global Manufacturing PMI exceeds expectations. Domestically, although the July domestic demand data is still weak, the market's pessimistic expectation of deflation has changed. However, the fundamentals of both raw materials and finished products are weakening, which suppresses the upward movement of the market. Overall, the steel market is expected to show a range - bound pattern [3]. - The supply of iron ore first increases and then stabilizes. The high demand for hot metal is maintained, but the downstream terminal demand is weak, and the inventory is accumulating. The short - term supply of coking coal is relatively loose, and the premium retracement supports the iron ore price. In the short term, the iron ore price is expected to be mainly range - bound [18]. - The details of the "anti - involution" policy need time to be introduced, and the macro - sentiment may fluctuate. The far - month production of coking coal may be restricted by over - production inspections and the 276 - working - day policy. The current main contract has a large open interest, and the long - short game is intense. Attention should be paid to the performance of finished product demand in the peak season, the production changes of coking coal mines, and the implementation effect of macro - policies [30]. - Driven by profit, the production of ferroalloys is gradually increasing, reaching a high level in the same period of the past five years, with great supply pressure. With the production restrictions on some steel mills before the parade and no obvious improvement in demand, the ferroalloy inventory may change from destocking to stocking. The price of ferroalloys is affected by the price of coking coal, and in the long - term, the valuation trend of coking coal is upward, but the short - term fluctuation is intense [48]. - The supply of soda ash is expected to remain high, and normal maintenance continues. The demand for soda ash is expected to be weak, and the upper - middle stream inventory continues to reach a new high. The cost of raw salt and coal has increased. The pattern of strong supply and weak demand for soda ash remains unchanged [57]. - The near - end trading of glass returns to the industry. After Hubei reduces the price, the production and sales situation improves. The policy expectation fluctuates, and the market sentiment also fluctuates. The supply of glass is stable, and the cumulative apparent demand from January to August is estimated to decline by 7%. The mid - stream inventory is at a high level, and the spot negative feedback continues. Attention should be paid to policy guidance and short - term sentiment changes [83]. 3. Summary by Related Catalogs Steel - **Macro and Fundamental Analysis**: Overseas macro - drivers are upward, and domestic deflation pessimism has changed. However, steel has a high - supply pressure with super - seasonal inventory accumulation. Raw material fundamentals are weakening, but the overall inventory of finished products is not high, and the total demand is acceptable. The market is expected to be range - bound [3]. - **Price Data**: On August 25, 2025, the closing prices of rebar 01, 05, and 10 contracts were 3224, 3261, and 3138 yuan/ton respectively; the closing prices of hot - rolled coil 01, 05, and 10 contracts were 3377, 3388, and 3389 yuan/ton respectively [4]. - **Spot Price and Basis**: The rebar summary price in China on August 25, 2025, was 3354 yuan/ton, and the 01 rebar basis in Shanghai was 86 yuan/ton. The hot - rolled coil summary price in Shanghai was 3430 yuan/ton, and the 01 hot - rolled coil basis in Shanghai was 53 yuan/ton [8]. Iron Ore - **Supply - Demand and Price Outlook**: Supply first increases and then stabilizes, demand for hot metal is high but terminal demand is weak with inventory accumulation. Coking coal supply supports the price. In the short term, the price is expected to be range - bound [18]. - **Price Data**: On August 25, 2025, the closing prices of iron ore 01, 05, and 09 contracts were 787, 763, and 806.5 yuan/ton respectively. The price of Rizhao PB powder was 780 yuan/ton [19]. - **Fundamental Data**: On August 22, 2025, the daily average hot - metal output was 240.75 tons, the 45 - port port clearance volume was 325.74 tons, and the 45 - port inventory was 13845.2 tons [24]. Coking Coal and Coke - **Market Analysis**: The "anti - involution" policy details are pending, and the macro - sentiment may fluctuate. The far - month production of coking coal may be restricted. The main contract has a large open interest, and the long - short game is intense. Attention should be paid to multiple factors [30]. - **Price and Basis Data**: On August 25, 2025, the coking coal warehouse - receipt cost in Tangshan (Meng 5) was 1128 yuan/ton, and the main - contract basis was - 88 yuan/ton. The coke warehouse - receipt cost in Rizhao Port (wet - quenched) was 1616 yuan/ton, and the main - contract basis was - 120.4 yuan/ton [35]. - **Spot Price and Profit**: The ex - factory price of Anze low - sulfur main coking coal was 1470 yuan/ton, and the immediate coking profit was 397 yuan/ton [36]. Ferroalloys - **Market Situation**: Driven by profit, production is increasing, with high supply pressure. With production restrictions on steel mills and no obvious demand improvement, inventory may change from destocking to stocking. The price is affected by coking coal [48]. - **Data of Ferrosilicon and Ferromanganese**: On August 25, 2025, the ferrosilicon basis in Ningxia was 8 yuan/ton, and the ferromanganese basis in Inner Mongolia was 268 yuan/ton [49][51]. Soda Ash - **Market Analysis**: Supply is expected to remain high, demand is weak, and the upper - middle stream inventory is at a new high. The cost of raw salt and coal has increased, and the pattern of strong supply and weak demand remains unchanged [57]. - **Price Data**: On August 25, 2025, the closing price of the soda ash 05 contract was 1393 yuan/ton, and the 5 - 9 month spread was 167 yuan/ton [58]. - **Spot Price**: The heavy - soda market price in North China was 1350 yuan/ton, and the heavy - soda to light - soda price difference was 100 yuan/ton [62]. Glass - **Market Analysis**: The near - end trading returns to the industry. After Hubei reduces the price, production and sales improve. Policy expectations and market sentiment fluctuate. Supply is stable, and the cumulative apparent demand from January to August is estimated to decline by 7%. The mid - stream inventory is high, and the spot negative feedback continues [83]. - **Price and Month - Spread Data**: On August 25, 2025, the closing price of the glass 05 contract was 1280 yuan/ton, and the 5 - 9 month spread was 281 yuan/ton [84]. - **Production and Sales Data**: On August 24, 2025, the production and sales rate in Shahe was 110%, and in Hubei was 131% [85].

Core Viewpoint - Experts believe that the era of rapid price increases in China is approaching, primarily due to severe monetary overproduction by the central bank, with M2 reaching 330.29 trillion yuan by June 2025, which is double the GDP. However, instead of inflation, the economy is entering a deflationary cycle, with prices of goods like cars, houses, and luxury items still in a downward adjustment phase [1][3]. Economic Conditions - The deflationary cycle in the domestic economy is attributed to two main factors: despite significant monetary overproduction, much of the excess liquidity is not entering the goods or capital markets but is circulating within the financial system due to insufficient investment and consumption confidence. This has led to falling prices in the goods market [3]. - Additionally, the sluggish performance of the real economy has resulted in stagnant or declining household income, leading to a rapid shrinkage in consumer demand. Consequently, businesses face severe inventory backlogs and are compelled to lower prices to recover funds [3]. Investment Recommendations - As the economy enters a deflationary period, industry insiders advise caution regarding asset depreciation, suggesting that investors should avoid certain actions: - Do not chase high stock prices, as the recent bull market in A-shares is driven by capital inflow from low bank deposit rates, making it unsustainable [7][9]. - Exercise caution when purchasing wealth management products, as the market has seen an increase in losses, with many investors facing principal losses due to declining money market yields and rising bond market risks [11]. - Avoid investing in real estate, as the market has been in a long-term adjustment since 2022, with average housing prices dropping by 30% from their peak, and some cities experiencing declines of over 60% [13]. - Refrain from blind entrepreneurship, as the success rate is low in a shrinking market, with rising costs and intense competition posing significant challenges [15]. Market Outlook - Starting in September, there may be a need to prepare for asset depreciation, as both real estate and stock markets exhibit significant bubbles and lack long-term investment value. In a deflationary context, risks associated with bank wealth management products and entrepreneurship are high, potentially leading to principal losses. It is recommended to consider low-risk investment products, such as government bonds and large-denomination certificates of deposit, to preserve capital and take advantage of future investment opportunities when asset bubbles burst [16].

Summary of Key Points from Conference Call Records Industry Overview - The records discuss the impact of tariffs on Asian exports and the overall economic growth in the region, particularly focusing on the effects of U.S.-China trade relations and the performance of various markets including India, Japan, and China [1][2][3]. Core Insights and Arguments 1. **Asian Export Performance**: Asian exports have shown limited improvement after a brief rebound, with exports to the U.S. stagnating and non-tech sector exports fluctuating within a narrow range, indicating significant impacts from global economic slowdown [1][2][3]. 2. **Tariff Impact**: Tariffs have had a notable negative effect on both Asian and U.S. economic growth, with U.S. GDP growth expected to slow from 2% in Q2 to 1% in Q4 of 2025, while global growth is projected to decline from 3.9% to 3.5% [2][9]. 3. **Capital Expenditure Stagnation**: U.S. capital expenditures have stagnated, with capital goods imports showing zero growth, which poses challenges for Asian economies, particularly in tech and non-tech sectors [5][9]. 4. **India-U.S. Trade Tensions**: Trade tensions between India and the U.S. may lead to a reduction in Indian exports to the U.S., but the overall impact is deemed manageable, with Indian corporate revenue expected to improve by Q3 2025 due to government policy actions [6][7][25]. 5. **Market Dynamics**: Recent market volatility suggests a significant directional change, with high valuations and risks of downturns in both U.S. and Chinese markets. Financial stocks have outperformed hardware companies, while AI-driven software firms have shown better performance [8][9]. 6. **China's Market Performance**: The onshore Chinese market has outperformed offshore markets, driven by rising long-term bond yields and positive liquidity indicators, with the Shanghai Composite Index reaching its highest level since 2015 [12][13][14]. 7. **Japan's Market Outlook**: Japan's stock market has rebounded strongly but may be overbought, with potential short-term correction risks. Long-term factors supporting the market include U.S. tax reforms and political changes in Japan [18][19]. 8. **Sector Performance in Japan**: Attractive sectors in Japan include construction software, information communication, real estate, and utilities, while the automotive sector faces uncertainties due to trade policies [19][20]. Additional Important Insights 1. **CPI and Deflationary Pressures**: Deflationary pressures from China are spreading across the region, contributing to downward pressure on CPI, which has remained below central bank targets [21][22]. 2. **Investment Strategy in A-shares**: Increasing positions in A-shares can effectively reduce portfolio risk due to their low correlation with global markets, especially during periods of significant volatility [16]. 3. **Monitoring Indicators for China**: Investors should focus on financing balance ratios, government bond yields, and upcoming policy events to assess the sustainability of the Chinese market [15]. 4. **Political Landscape in Japan**: The political situation in Japan remains uncertain, with potential leadership changes that could impact economic policies and market dynamics [27][28]. This summary encapsulates the critical insights and data points from the conference call records, providing a comprehensive overview of the current economic landscape and market dynamics in Asia.

Group 1: Market Performance - The US stock market opened lower on August 21, with the Dow Jones down 0.40%, S&P 500 down 0.31%, and Nasdaq down 0.39% [1] - Walmart's Q2 revenue was $177.4 billion, showing a year-on-year growth of 4.8%, but the stock fell over 3% [1] - Chinese stocks showed mixed performance, with Miniso up over 9%, XPeng and NIO up over 4%, while Bilibili and New Oxygen fell over 3% [1] Group 2: Trade Agreements - The US and EU reached a framework agreement on trade, with the US expected to impose a 15% tariff on most EU imports, including cars, pharmaceuticals, semiconductors, and timber [2] Group 3: Economic Outlook - A rare perspective from Wall Street suggests that US deflation may be imminent, primarily driven by the real estate market, with predictions of significant declines in housing prices potentially lowering inflation to near 1% [3] Group 4: Corporate Developments - Xiaopeng Motors' CEO He Xiaopeng increased his stake by purchasing 3.1 million shares at an average price of HKD 80.49 [5] - JD.com has relaunched its community group buying initiative, JD Pinpin, with multiple stores opened in Beijing and plans for expansion in other regions [6] - Alibaba announced plans to spin off Zhaoma Network Technology Co., Ltd. for independent listing on the Hong Kong Stock Exchange, aiming to provide separate valuations for investors [7]

Group 1 - Investors are focusing on the impacts of tariffs, the effectiveness of China's antitrust policies, US-India trade tensions, and whether the Bank of Japan is lagging behind [1] - Morgan Stanley's latest report indicates that investors are more optimistic about the macro outlook for the US and Asia compared to the bank's baseline scenario [1] Group 2 - The current tariff on Asian goods has increased significantly to 25% from 5% at the beginning of the year, with expectations of a notable slowdown in exports by the second half of 2025 [2] - Despite the tariff increases, investors believe that growth in the US and Asia will not show significant deceleration in the latter half of 2025 [2][4] - Non-tech exports from Asia have stabilized after a decline in April and May, with a focus on non-tech exports due to tech products being largely exempt from tariffs [2][5] Group 3 - Exporters have not borne much of the tariff burden, as the prices of goods imported from Asia to the US remain higher than levels seen in February 2025 [7] - The effective tariff rate on Asian imports has risen by 20 percentage points, yet the prices of these goods are only slightly lower than in February 2025 [10] Group 4 - Capital expenditure momentum in Asia appears to be stabilizing, with evidence suggesting a slowdown in capital goods imports since May 2025 [12] - South Korea has committed $350 billion in investments, with actual equity commitments expected to be lower than $17.5 billion, while Japan has announced $550 billion in loans and guarantees, with only 12% expected to be actual investments [13] Group 5 - The increase in tariffs is expected to enhance the transmission of price increases to core goods, with indications that tariffs are driving prices higher in categories such as automobiles and household goods [16] - The US core PCE is projected to peak at 0.39% monthly by August 2025, with core CPI expected to reach a higher peak of 0.45% [16] Group 6 - Asian central banks are currently in a wait-and-see mode, with expectations of further rate cuts as trade policy uncertainties decrease [17] - The report anticipates additional rate cuts in the remaining months of 2025 and into 2026 across various Asian central banks [17] Group 7 - The effectiveness of China's antitrust efforts faces challenges, with recent signals from policymakers indicating potential follow-up actions to address deflationary pressures [18] - The current macroeconomic environment is less favorable for addressing deflation compared to previous years, with a need for a rebalancing from investment to consumption [18][24] Group 8 - The impact of tariffs on India's growth is expected to be mitigated, with only 2% of India's GDP affected by direct and indirect channels from tariffs [19] - The Indian government estimates that only 55% of its exports to the US will be impacted by tariffs, allowing for some exemptions [19] Group 9 - There is a growing divergence between macroeconomic indicators and micro-level data in India, with corporate revenue growth slowing while nominal GDP growth remains high [21] - Factors such as recent monetary easing by the Reserve Bank of India are expected to support economic re-inflation in the coming quarters [21] Group 10 - The Bank of Japan maintains a dovish stance due to moderate demand-side inflation pressures, with expectations of no rate hikes in the near term [22] - The Japanese economy is still recovering from the pandemic, with private consumption and capital expenditure below pre-COVID levels [22] Group 11 - Asian investors are reducing net purchases of US stocks, indicating a shift in focus towards European equities and increased foreign exchange hedging on US positions [23] - The ongoing concerns about the US macro outlook are prompting Asian investors to reconsider their asset allocations [23]

Group 1 - The core viewpoint of Rosenberg Research is that the U.S. real estate market will significantly contribute to a decline in overall inflation, potentially bringing it close to 1%, well below the Federal Reserve's target of 2% [1] - The company's housing market activity index indicates a "substantial decline" in the U.S. real estate sector, with 10 out of 11 indicators showing significant downturns over the past six months [1][2] - The only indicator that did not decline was the S&P Case-Shiller 20-City Home Price Index, which increased by 0.8% over the past six months, but reduced transaction activity may pressure home prices downward [1] Group 2 - Housing-related expenditures account for approximately one-third of the Consumer Price Index (CPI) in the U.S., and the current downturn in the housing market is expected to have a lasting suppressive effect on inflation through 2026 [2] - The projected year-on-year CPI growth for the second quarter of 2026 is estimated to be between 1.2% and 1.8%, indicating a potential halving of the inflation rate compared to current levels [2] - Concerns about inflation slowing down or even deflation are emerging, with factors such as tightened immigration policies and an aging population potentially weakening consumer demand [2][3] Group 3 - Key indicators of the housing market's decline include a 23.9% decrease in housing starts, a 23.7% drop in new single-family home sales, a 16.1% decline in existing home sales, and a 14.2% reduction in the quarterly rent index for new tenants over the past two quarters [4] - The number of potential buyer visits has decreased by 7 percentage points, which is considered a critical data point in the index [4]

Group 1 - The Bank of Japan, under Governor Ueda, has raised interest rates for the first time in 17 years, marking a significant shift from its previous ultra-loose monetary policy [1] - Ueda's cautious stance is evident as he becomes one of the more dovish members of the nine-member policy committee, expressing concerns about the economic impact of U.S. tariffs [1][3] - The recent outlook report from the Bank of Japan indicates that tariffs could complicate future interest rate decisions, reflecting a cautious approach towards the economic outlook [1][3] Group 2 - The July meeting minutes reveal that persistent food inflation has led some committee members to warn of potential second-round price effects, which could justify further rate hikes [2] - Despite hawkish signals from some committee members, Ueda emphasizes that domestic demand and wage-driven inflation remain below the central bank's target, supporting a slower pace of rate increases [2] - The internal dynamics of the committee show a shift in influence, with former dovish members losing power and hawkish members warning about the risks of rising inflation due to food price increases [2][3] Group 3 - Ueda and his deputy, Shinichi Uchida, maintain a dovish stance, focusing on the downside risks facing Japan's fragile economy and the potential negative impacts of U.S. tariffs [3] - Concerns about the impact of U.S. tariffs on exports and capital spending are prevalent, with economists predicting a decline in corporate profits that could affect capital expenditures [3] - The trade agreement between Japan and the U.S. has not fully clarified the timeline for tariff reductions, leading to uncertainty about the future economic landscape [3] Group 4 - The governor proposes policies and interest rate proposals to the committee, which have historically been approved by majority or unanimous votes [4] - Since the current committee framework was established in 1998, the governor's proposals have never been rejected, indicating strong leadership [4] Group 5 - There is a perception that the current committee lacks strong dissenters, making it unlikely for hawkish members to oppose the governor's wishes regarding interest rate hikes [5] - Ueda's leadership within the committee appears to be solid, suggesting that his cautious approach may prevail despite the presence of hawkish sentiments [5]