Core Viewpoint - The article emphasizes the necessity for China to engage in the ongoing monetary revolution, particularly focusing on digital currencies and stablecoins, to avoid falling behind in the global financial landscape [2]. Group 1: Digital Currency Developments - Digital Renminbi (e-CNY) has been gradually integrated into daily life since its pilot launch in 2019, becoming a crucial part of China's digital payment transformation [3]. - The concept of Renminbi stablecoin, which is still under discussion, is seen as a potential tool to enhance cross-border payment efficiency and reduce costs, thereby providing advantages for businesses and individuals [4][6]. - The People's Bank of China (PBOC) has highlighted the challenges posed by the development of digital currencies and stablecoins to financial regulation [8]. Group 2: Comparison of Digital Renminbi and Stablecoin - Digital Renminbi is issued by the central bank, focusing on domestic payment modernization and financial sovereignty, while Renminbi stablecoin is market-driven and aims to facilitate cross-border transactions [12][19]. - Digital Renminbi is advantageous for small, frequent transactions and government payments, whereas stablecoins are more flexible for on-chain scenarios and 24/7 cross-platform settlements [14][15]. - There is a debate on whether digital Renminbi and Renminbi stablecoin will complement or compete with each other, particularly in cross-border payments [9][18]. Group 3: Strategic Importance of Stablecoin - The exploration of Renminbi stablecoin is urgent for enhancing China's position in the global financial market and promoting the internationalization of the Renminbi [24][25]. - The development of both digital Renminbi and stablecoin is strategically significant for improving China's capital market, international influence, and reducing the dominance of the US dollar in international payments [26]. - Key participants in this development include the central bank, regulatory authorities, financial infrastructure, and licensed financial institutions [27][28]. Group 4: Future Prospects and Recommendations - The future of Renminbi stablecoin may see its launch primarily in offshore markets like Hong Kong, while the domestic focus remains on digital Renminbi [29][30]. - A dual-track approach is suggested, where digital Renminbi expands its retail applications and stablecoins are tested in offshore markets [34]. - Companies are advised to integrate existing cross-border payment systems while ensuring compliance and leveraging digital Renminbi for government-related transactions [38].

Group 1 - China is considering the launch of a Renminbi stablecoin, potentially approving it by the end of the month, indicating a faster pace than expected in its digital currency strategy [1] - Stablecoins are designed to provide price stability by being pegged to stable assets like the US dollar, making them suitable for everyday transactions and international payments [3] - The introduction of a Renminbi stablecoin would facilitate direct payments between Chinese enterprises and international clients, reducing reliance on the US dollar and associated costs [4] Group 2 - The competition for dominance in the digital currency space is intensifying, with the US promoting dollar stablecoins to maintain its global payment supremacy [6] - A Renminbi stablecoin could enhance China's presence in the international financial system, providing a strategic advantage amid increasing geopolitical tensions and sanctions [8] - Effective regulation and oversight will be crucial for the success of the Renminbi stablecoin, as it poses potential risks such as capital flight and financial instability if not managed properly [6][8]

Market Overview - The Hong Kong stock market experienced a decline of 0.24% amid complex external conditions and concerns over upcoming remarks by Federal Reserve Chairman Jerome Powell at the Jackson Hole conference [1] - The geopolitical situation remains tense, with reports of large-scale airstrikes by Russian forces on Ukraine and renewed military actions in the Middle East [1][2] Company Performance - Chinese gold stocks, such as China Gold International (02099) and Chow Sang Sang (00116), saw significant gains, with increases of nearly 5% and over 7% respectively [1] - The Hong Kong Stock Exchange (HKEX) is considering extending trading hours, with plans for a 24-hour trading mechanism by 2026, although this may not be favorable for all investors [2] Digital Currency Developments - China is reportedly considering allowing the use of RMB-backed stablecoins, which could significantly enhance the internationalization of the RMB [3] - Related stocks in the stablecoin sector, such as ZhongAn Online (06060) and Guotai Junan International (01788), experienced notable increases [3] Health Sector Insights - The Chinese government has issued guidelines to promote ear and hearing health, which has positively impacted healthcare stocks like Dingdang Health (09886) and Ping An Good Doctor (01833) [3] Transportation and Logistics - China Railway Group announced a significant tender for high-speed trains, exceeding market expectations, which is likely to benefit companies like CRRC (01766) and Times Electric (03898) [3] - The shipping sector is poised for growth, particularly with the increase in trade with ASEAN countries, benefiting companies such as China Ocean Shipping (00598) and Sea Group (01308) [6] Individual Stock Highlights - Sea Group (01308) reported a revenue of approximately $1.6645 billion, a year-on-year increase of 28%, with a profit growth of 79.5% [7] - The company is expanding its fleet with new container ships to meet growing operational demands, which is expected to enhance its market position [8] - The demand for smaller container ships remains strong due to limited supply and economic growth in Southeast Asia [8]

Market Performance - The Shanghai Composite Index rose by 1.04% to 3766.21 points, while the Shenzhen Component Index increased by 0.89%[1] - The Hong Kong Hang Seng Index gained 0.17% to 25165.94 points, with the Hang Seng Technology Index down by 0.01%[1] - The total trading volume in the Hong Kong market reached 285.29 billion HKD[1] Federal Reserve Insights - The Federal Reserve's minutes indicated that most officials view inflation as a greater risk than a weak labor market[8] - The Federal Open Market Committee (FOMC) maintained interest rates in the range of 4.25% to 4.5% due to moderate economic activity and increased uncertainty[13] Chinese Currency Developments - Reports suggest that the Chinese government is considering a significant shift in its stance on digital assets, potentially allowing the launch of a Renminbi stablecoin[8][13] - The plan to expand the internationalization of the Renminbi may include a roadmap for stablecoin development, with discussions expected to take place by the end of August[13] Corporate Earnings Highlights - Baidu's Q2 revenue fell by 4% to 32.7 billion CNY (approximately 4.6 billion USD), marking its largest decline since 2022[15] - China State Construction International reported a 5.1% increase in interim profit to 5.26 billion CNY, with a revenue of 56.64 billion CNY[15]

Core Viewpoint - China's economy grew by 5.3% in the first half of the year, exceeding the annual growth target, but the outlook for the second half remains cautious due to pressures from tariffs, real estate, and limited fiscal capacity [1][3]. Group 1: Economic Growth and Policy Recommendations - The report emphasizes the need for stronger counter-cyclical policies to achieve the annual economic growth target, given the marginal weakening of growth momentum in Q2 compared to Q1 [3][4]. - It suggests that the government should utilize public budget funds and consider issuing an additional 2.3 trillion yuan in government bonds to support fiscal spending [4]. - The report highlights the importance of urban renewal projects as a critical area for expanding domestic demand, especially as the effectiveness of existing policies like "trade-in" diminishes over time [4][5]. Group 2: Monetary Policy and Interest Rates - The report recommends lowering policy interest rates to guide market rates downwards, which is essential for restoring balance between private sector savings and investments [4][5]. - It notes that the current global environment, with many developed countries in a rate-cutting cycle, provides a favorable backdrop for such monetary easing [4]. Group 3: Currency Valuation and Exchange Rate Dynamics - The report discusses the depreciation of the RMB's real effective exchange rate by over 15% since 2022, attributing this to persistent domestic demand shortages [7][8]. - It emphasizes that the comparison of expected returns between RMB assets and foreign exchange assets is crucial for determining the supply and demand in the foreign exchange market [8]. - The report suggests that timely and sufficient counter-cyclical policies are necessary to achieve a reasonable valuation of the RMB's real effective exchange rate [8][9]. Group 4: Stablecoin Development and Internationalization of RMB - The report outlines the structural changes in the RMB exchange rate, including a shift in expectations and a changing interest rate environment, which could support the internationalization of the RMB [11]. - It discusses the potential pathways for advancing RMB stablecoin trials, emphasizing the need for onshore stablecoins due to the lack of application scenarios for offshore stablecoins [12]. - The report highlights the importance of strict regulation in the development of RMB stablecoins to avoid missing critical opportunities in the evolving financial landscape [12].

Core Viewpoint - The report highlights the need for further counter-cyclical policies to achieve the annual economic growth target in China, given the pressures from tariffs, real estate, and limited fiscal capacity. It emphasizes the importance of expanding domestic demand and its impact on the RMB exchange rate [1][2][4]. Economic Growth and Domestic Demand - China's GDP for the first half of the year was approximately 66.05 trillion yuan, reflecting a year-on-year growth of 5.3% [2] - The report indicates that fiscal measures, such as bond issuance and spending, have effectively supported economic growth in the first half of the year [2] - It suggests that the economic momentum weakened in the second quarter compared to the first, necessitating stronger counter-cyclical policies to address increasing demand pressures [2][3] Fiscal Policy Recommendations - The report recommends utilizing public budget funds and considering the issuance of an additional 2.3 trillion yuan in government bonds to meet the annual budget growth target [2][3] - It notes that the government plans to issue 7.6 trillion yuan in bonds from June to December, which is lower than the previous year's issuance [2] Domestic Demand Expansion Strategies - The report identifies urban renewal and transformation as a critical area for expanding domestic demand, suggesting it as a viable point for government-led public investment [3] - It advocates for lowering policy interest rates to guide market rates downwards, thereby improving inflation expectations and balancing private sector savings and investments [3] - The report emphasizes the need for simultaneous efforts on both supply and demand sides to revitalize the real estate market [3] RMB Exchange Rate Dynamics - The report discusses the undervaluation of the RMB's real effective exchange rate, which has depreciated over 15% since early 2022, despite improvements in export competitiveness [4][5] - It highlights that the nominal effective exchange rate's depreciation and the decline in domestic price levels relative to trade partners contributed significantly to this depreciation [5] - The report stresses that the comparison of expected returns on RMB assets versus foreign assets is crucial for determining the supply and demand in the foreign exchange market [5][6] RMB Stablecoin Development - The report outlines structural changes in the RMB exchange rate, including a shift in expectations and a changing interest rate environment, which may support RMB internationalization [7] - It discusses various options for advancing RMB stablecoin trials, emphasizing the need for onshore stablecoins due to limited application scenarios for offshore stablecoins [8][9] - The report suggests leveraging China's manufacturing and industrial chain advantages to expand offline applications for stablecoins [8]

Core Insights - Conflux Tree Graph Technology and Ecological Development Conference was held in Shanghai from July 18 to 20, where Conflux Tree Graph Public Chain 3.0 was announced [1] - The official launch of Conflux Tree Graph Public Chain 3.0 is scheduled for August this year [1] - Strategic partnerships were established with AnchorX and Dongxin Peace (002017) to promote offshore RMB stablecoin issuance, cross-border settlement, and RWA applications in countries involved in the Belt and Road Initiative [1]

Core Viewpoint - The survey indicates a cautiously optimistic outlook for China's economy in the second half of 2025, with a focus on stabilizing consumption and investment while navigating external uncertainties [2][5][11]. Economic Performance - Nearly 60% of respondents believe the economic performance in the first half of the year was stable and moderate, with GDP growth at 5.3% year-on-year [3][11]. - Over 61% of respondents rated the monetary policy in the second quarter as "loose" or "very loose," reflecting a positive assessment of the policy measures taken [3]. Consumption and Investment Outlook - The majority of respondents (53.4%) expect consumption to remain stable in the second half, but 43.3% warn of potential declines in consumption momentum [6]. - 43.3% of respondents are optimistic about private investment confidence stabilizing in the third quarter, an increase of 18.7 percentage points from the previous survey [7]. Real Estate Market - 55% of respondents believe the real estate market in first-tier cities is nearing a stabilization point, while over half (51.7%) expect a slight decline in overall sales heat in the third quarter [7]. Stock and Currency Markets - A significant majority (81.7%) of respondents rated the stock market's outlook for the third quarter positively, reflecting a growing confidence in A-shares and Hong Kong stocks [8]. - Over 75% of respondents anticipate the RMB/USD exchange rate will remain between 7.0 and 7.2, with expectations of slight capital inflows [9]. Policy Recommendations - Respondents suggest enhancing the "old-for-new" consumption policy and expanding its scope to include service consumption, with 65% advocating for increased funding [10][11]. - There is a strong call (80.1%) for the development of a stable digital RMB, indicating a perceived urgency in establishing a recognized stablecoin market [12].

Core Viewpoint - The majority of respondents believe that the Chinese stock and foreign exchange markets will continue to show resilience in the third quarter, despite complex external and internal economic conditions [1][8]. Economic Growth Outlook - Over 80% of respondents expect the GDP growth rate for the second quarter to be no less than 5%, with 48.3% predicting a range of 5.0% to 5.2% [3][17]. - The overall economic performance in the first half of the year is viewed as stable, with 58.3% of economists indicating a moderate growth [3][17]. Monetary and Fiscal Policy - More than 60% of respondents rated the monetary policy in the second quarter as "loose" or "very loose," reflecting a positive evaluation of the measures taken [3][16]. - The fiscal policy received mixed reviews, with 43.3% considering it "moderate" and 35% believing it was insufficient [3][16]. Stock Market Performance - A significant 91.7% of respondents rated the stock market performance in the second quarter positively, indicating a growing consensus on the revaluation of Chinese assets [4][8]. - For the third quarter, 81.7% of respondents expressed a neutral to optimistic outlook on stock market conditions, a notable increase of 29.1 percentage points from the previous survey [8][22]. Consumer and Investment Sentiment - The consumer market is expected to remain stable, with 53.4% of respondents anticipating steady consumption, although 43.3% warned of potential declines in consumer momentum [5][18]. - In terms of investment, 43.3% of respondents expect private investment confidence to stabilize, marking an 18.7 percentage point increase from the last survey [7][18]. Real Estate Market Insights - 55% of respondents believe that the real estate market in first-tier cities is nearing a stabilization point, while over half expect a slight decline in sales heat in the third quarter [7][20]. - The overall sentiment towards the real estate market reflects concerns about cooling sales, with 51.7% predicting a small drop in sales activity [7][20]. Foreign Exchange and Capital Flow - Over 75% of respondents expect the RMB to USD exchange rate to remain between 7.0 and 7.2 in the third quarter, indicating a stable outlook for the currency [10][21]. - More than 45% of respondents anticipate a slight inflow of cross-border capital, reflecting a positive shift in sentiment regarding capital movement [10][22]. Trade and Economic Policy Recommendations - Respondents suggest enhancing policies to stimulate consumption, including expanding the "old-for-new" subsidy program and including service consumption in government subsidies [11][12]. - The urgency to develop a stable digital currency is highlighted, with 80.1% of respondents rating the need for a recognized RMB stablecoin as high [13].

Group 1 - Over 80% of respondents believe that the economic growth rate in the second quarter will not be lower than 5%, with 48.3% expecting a growth rate between 5.0% and 5.2% [1] - Respondents anticipate that consumer sentiment will stabilize in the second half of the year due to policy support, while the real estate market sales may decline [1] - The stock and foreign exchange markets are expected to maintain resilience in the third quarter [1] Group 2 - The impact of the China-US trade negotiations on the Chinese economy is considered manageable by the respondents [1] - Recommendations include further strengthening and expanding the implementation of the consumption upgrade policy, such as increasing total quotas and including service consumption in subsidy ranges [1] - There is a general consensus among respondents on the urgency of developing a stable digital currency for the renminbi [1]