Core Viewpoint - The rapid expansion of the Panda bond market is a significant milestone in China's bond market's internationalization, with cumulative issuance exceeding 1 trillion yuan since the end of 2022 [1][2]. Group 1: Market Expansion - The cumulative issuance of Panda bonds reached 10,888.90 million yuan as of July 22, 2025, with 654 bonds issued [3]. - The Panda bond market has experienced two phases: a slow development phase from 2005 to 2015 and a rapid expansion phase from 2016 to the present, with issuance exceeding 1,300 million yuan in 2016 and consistently above 1,000 million yuan from 2023 onwards [3][5]. Group 2: Regulatory Improvements - Regulatory enhancements in market access, issuance pricing, information disclosure, and investor protection have simplified Panda bond issuance rules, attracting more foreign institutions [1][6]. Group 3: Low Interest Rate Environment - The low interest rate environment in China has made Panda bonds attractive for foreign issuers, with the proportion of bonds issued at a coupon rate below 2.5% increasing from 67.89% in 2024 to 89.58% in 2025 [6][7]. - The overall downward trend in interest rates, coupled with the widening interest rate differential between China and the U.S., has further highlighted the cost advantages of RMB financing [7]. Group 4: Issuer Structure Optimization - The issuer structure of Panda bonds has diversified, including international development institutions, foreign sovereign governments, financial institutions, and non-financial enterprises across five continents [9]. - The proportion of issuances from international development institutions and multinational corporations increased by 23 percentage points in the first half of 2025 compared to the previous year [9][10]. Group 5: Future Outlook - The Panda bond market is expected to continue expanding, driven by the ongoing internationalization of the RMB and favorable financing conditions [11][12]. - The emergence of innovative bond types related to sustainable development and rural revitalization is anticipated to enhance market activity and attract more foreign issuers [12].

Group 1 - The People's Bank of China (PBOC) has drafted a proposal to amend certain regulations, which is now open for public consultation [1] - The proposal clarifies the legal status of the Shanghai Clearing House as a bond registration, custody, and settlement institution [1] - The proposal aims to facilitate open market operations involving government bonds and promote a high level of openness in the bond market by removing the requirement to freeze collateral for bond repurchase agreements [1] - The proposal also includes modifications to the regulations regarding the disclosure of financial bond information based on current practices [1]

Core Viewpoint - The People's Bank of China (PBOC) is soliciting public opinions on the draft decision to amend certain regulations, which aims to enhance the legal status of the Shanghai Clearing House and improve the bond market's operational efficiency and openness [1] Group 1 - The draft decision clarifies the legal status of the Shanghai Clearing House as a bond registration, custody, and settlement institution [1] - The regulation removes the requirement to freeze pledged securities for bond repurchase agreements, facilitating open market operations for government bonds [1] - Modifications to the information disclosure management of financial bonds are made to align with current practices [1]

Core Viewpoint - The expansion of the "Southbound Bond Connect" is expected to enhance the overseas asset allocation channels for domestic non-bank institutions, improving their investment flexibility and return capabilities, while also increasing the activity and liquidity of the Hong Kong bond market, thereby reinforcing its status as a global financial center and offshore RMB hub [1]. Group 1: Expansion of Participation Institutions - The recent expansion allows non-bank institutions such as brokerages, insurance companies, and asset management firms to participate in the "Southbound Bond Connect," which previously only included banks and qualified domestic institutional investors (QDII) [3]. - This expansion is anticipated to help domestic non-bank institutions invest in global bond markets, enhancing their investment returns and risk-reward ratios, especially given the current low yield environment in the domestic bond market [3]. - The introduction of diverse investment demands is expected to boost the activity and liquidity of the Hong Kong bond market [3]. Group 2: Benefits for Non-Bank Institutions - The expansion provides a new channel for insurance companies to invest in higher-yielding foreign bonds, alleviating the pressure of "asset scarcity" in the current market [4]. - For example, the yields on 10-year government bonds are significantly higher in the U.S. (4.34%) and Eurozone (3.24%) compared to China's (1.64%), making overseas bonds more attractive for domestic investors [4]. Group 3: Opportunities for Brokerages - Brokerages are expected to benefit from multiple growth points, including enhanced self-operated investment returns and diversified asset allocation through high-yield bonds [6]. - They can also develop asset management products linked to foreign bonds, catering to high-net-worth clients and institutional investors, while launching differentiated products for various currency markets [6]. - Some brokerages may become qualified market makers for the "Southbound Bond Connect," providing liquidity and earning from bid-ask spreads [6]. Group 4: Optimization of Offshore Repo Mechanism - The optimization of the offshore repo mechanism allows for a broader range of currencies, enhancing the liquidity and attractiveness of onshore RMB bonds as collateral [9][11]. - This change is expected to deepen the interconnection between the mainland and Hong Kong bond markets, facilitating the two-way flow of capital and enhancing market linkage [11]. - The development of a multi-currency repo trading center in Hong Kong is anticipated to reduce currency hedging costs and strengthen its role as a global funding hub [11].

Core Insights - The report highlights the impact of the recent US-Vietnam trade agreement on China's textile exports, with US tariffs on Vietnam reduced from 46% to 20%, potentially leading to a shift of orders from US buyers to Vietnam [8] - The outdoor industry is expected to continue thriving, supported by increasing participation in events and a growing market for outdoor products, with a target industry scale exceeding 3 trillion yuan by 2025 [9] - The real estate market is anticipated to stabilize, with potential policy support from the government, which may positively influence the home furnishing sector [10] Economic News - The National Development and Reform Commission has allocated an additional 10 billion yuan for employment projects, expected to create jobs for 310,000 individuals [2] - The People's Bank of China is exploring new measures to open the bond market to foreign investors, aiming to enhance the liquidity of RMB bonds [3] - The Hong Kong Monetary Authority plans to expand offshore RMB repurchase operations, enhancing market liquidity and supporting the development of the Hong Kong bond market [4] Company News - Shentong Express has partnered with Cainiao to advance the application of unmanned vehicles in last-mile delivery, aiming to enhance its smart delivery network [6] - Huawei has announced a new patent for an auxiliary driving method, which aims to improve drivers' perception of surrounding obstacles [6] - JD.com has launched a "Double Hundred Plan" to invest over 10 billion yuan to support quality merchants, enhancing their online sales capabilities [6] Market Review - The textile and apparel industry saw a 1.36% increase, while the light industry rose by 0.58%, indicating a positive trend in these sectors [11]

Open Market Operations - The central bank announced a 690 billion yuan 7-day reverse repurchase operation on July 8, with a fixed interest rate of 1.40%, and the same amount was successfully bid [1][4] - On the same day, 1,310 billion yuan of reverse repos matured, resulting in a net withdrawal of 620 billion yuan [1][4] Funding Conditions - The latest transaction for one-year interbank certificates of deposit among major banks is around 1.6%, showing little change from the previous day [6] Bond Market - Major interbank bond yields have generally risen [8] - Government bond futures closed collectively lower, with the 30-year main contract down 0.22%, the 10-year down 0.08%, the 5-year down 0.08%, and the 2-year down 0.03% [12][14] Local Government Financing - The Hubei province is implementing measures such as "debt restructuring, platform transformation, and asset revitalization" to effectively prevent and mitigate local debt risks [18] - Recent negative events in bond issuance include downgrades in credit ratings for several companies, indicating potential risks in the local government financing sector [18]

Group 1 - The issuance of technology innovation bonds has accelerated since the implementation of the new policy on May 7, with a total of 442 bonds issued, raising 630.71 billion yuan in two months [1] - Nine companies from Henan have collectively raised over 10 billion yuan through technology innovation bonds [1] - The Hong Kong Securities and Futures Commission announced measures to expand the range of participants in the Bond Connect Southbound scheme, including brokers and asset management companies [3] Group 2 - Two leading credit rating agencies are planning to introduce simplified "one-page" credit rating reports starting in August, requiring investors to register as institutional investors to access full reports [5] - The People's Bank of China is actively researching further measures to promote the opening of the bond market, including enhancing cross-border financing convenience and enriching the offshore RMB financial market product system [6][8] - The National Development and Reform Commission and other departments issued a notice to support qualified enterprises in issuing bonds for zero-carbon park construction [6] Group 3 - The Tianjin government encourages qualified venture capital institutions to issue corporate bonds and debt financing tools for equity investment [11] - Fujian Province plans to issue 262.2682 million yuan in special new bonds as part of a total issuance of 599.584 million yuan [12] - The Anqing State-owned Assets Supervision and Administration Commission issued guidelines to strengthen debt risk management for state-owned enterprises [13] Group 4 - Luoyang Guoxing Industrial Investment Company plans to issue 600 million yuan in rural revitalization corporate bonds [14] - Jiaozuo Construction Investment (Holding) Company has completed the issuance of 300 million yuan in corporate bonds with an interest rate of 2.75% [16] - Nanyang High-tech Development Investment Group intends to issue up to 1.7 billion yuan in corporate bonds, with the underwriting fee set at 2‰ per year [17] Group 5 - Dongfang Jincheng predicts that the bond market will continue to experience fluctuations, with expectations of marginal improvement in inflation data for June [19] - Despite the central bank's significant net withdrawal, the funding environment remains loose, potentially leading to further declines in short-term interest rates [19] - The overall bond market is expected to maintain a volatile trend, with a steepening yield curve anticipated [19]

Group 1 - The total amount of Chinese bonds held by foreign institutions has increased by nearly 200 billion RMB since the beginning of the year, indicating a positive outlook on RMB assets following tariff events [1] - As of the end of May, foreign institutions held a total of 4.4 trillion RMB in Chinese bonds, which is nearly four times the amount before the Bond Connect was launched [1] - The Northbound trading volume has exceeded 5.5 trillion RMB this year, with over 1.2 million transactions in the swap market [1] Group 2 - The People's Bank of China announced three new measures to optimize the Bond Connect, including improving the Southbound trading mechanism, optimizing offshore repurchase business arrangements, and enhancing the swap market mechanism [1] - The central bank is actively researching further measures to promote the opening of the bond market, including enhancing connectivity between domestic and foreign financial markets and establishing a one-stop account opening platform for foreign investors [2] - Efforts are being made to enrich the offshore RMB financial market product system to improve market liquidity and promote a virtuous cycle between onshore and offshore RMB markets [2]

Report Summary 1. Report Industry Investment Rating The report does not mention the industry investment rating. 2. Core View of the Report The current fundamentals continue the weak recovery trend. After the cross - quarter, the easing of capital pressure kicks off the seasonal easing window, and the overall environment is favorable for the bond market. However, with the central bank's reserve requirement ratio cut and interest rate cut expectations not dispelled, the downward space for yields is limited. The bond market is expected to fluctuate strongly, and it is recommended to buy on dips [2]. 3. Summary by Relevant Catalogs 3.1 Futures Disk - T, TF, TS, and TL main contract closing prices decreased by 0.08%, 0.08%, 0.03%, and 0.22% respectively, while trading volumes increased by 845, 490, 434, and 2498 respectively [2]. 3.2 Futures Spreads - Different contract spreads show various changes, such as the TL2512 - 2509 spread decreased by 0.02, and the T2512 - 2509 spread increased by 0.00 [2]. 3.3 Futures Positions - The positions of T, TF, TS, and TL main contracts and the long - short positions of the top 20 show different changes, with the net short positions of most contracts decreasing [2]. 3.4 Top Two CTD (Clean Prices) - The clean prices of multiple CTD bonds decreased, such as the 220010.IB (6y) decreased by 0.1041 [2]. 3.5 Active Treasury Bonds - Yields of 1 - 7y active treasury bonds increased by 0.15 - 0.90bp, while the 10y yield decreased by 0.10bp [2]. 3.6 Short - term Interest Rates - The silver - pledged overnight interest rate decreased by 7.49bp, and the silver - pledged 7 - day interest rate increased by 2.00bp [2]. 3.7 LPR Interest Rates - The 1y and 5y LPR interest rates remained unchanged [2]. 3.8 Open Market Operations - The issuance scale was 690 billion, the maturity scale was 1310 billion, and the interest rate was 1.4% for 7 days [2]. 3.9 Industry News - The central bank is actively researching and promoting other measures for the opening - up of the bond market; the Chinese Ministry of Finance is willing to deepen BRICS financial cooperation; the US will impose tariffs on 14 countries and extend the tariff negotiation suspension period to August 1st [2]. 3.10 Key Data to Focus On - On July 9th at 22:00, the US May wholesale sales month - on - month rate; on July 10th at 02:00, the Fed will release the minutes of the monetary policy meeting, and at 20:30, the US initial jobless claims for the week ending July 5th [3].

央行江会芬：正在积极研究推进债券市场对外开放的其他措施 金十数据7月8日讯，中国人民银行金融市场司副司长江会芬在"债券通周年论坛2025"上表示，正在积极 研究推进债券市场对外开放的其他措施：一是深化拓展境内外金融市场联通合作，进一步推动人民币债 券成为全球高质量流动性资产。二是提升跨境投融资的便利化水平，推动建立面向境外投资者的一站式 开户平台，与财税部门共同推动明确面向境外投资者的后续免税安排。三是丰富离岸人民币金融市场的 产品体系，提升市场流动性，推动在岸与离岸人民币市场形成良性循环。 （上证报） 美元/离岸人民币 ...