Core Viewpoint - The article emphasizes the importance of improving the government bond yield curve as a foundation for the financial market, highlighting recent measures taken by the Ministry of Finance to enhance liquidity in the secondary market for government bonds [2][3]. Summary by Sections Government Bond Market Operations - The Ministry of Finance announced operations to support the market for government bonds, specifically selling 2.7 billion yuan of 2025 10-year bonds and 2.8 billion yuan of 2025 12-year bonds to improve liquidity and reflect market supply and demand [2][3]. Current Market Conditions - The article discusses the ongoing asset shortage and declining policy interest rates, which have increased investor preference for government bonds, leading to a liquidity squeeze in the bond market [2][3][4]. - In July, there was a net decrease of 1.11 trillion yuan in household deposits, indicating a shift in financial asset distribution among residents [3]. Importance of a Healthy Yield Curve - A well-functioning government bond yield curve is crucial for the stability and predictability of the financial system, especially as household asset exposure risks change [3][4]. - The Ministry of Finance's operations aim to balance supply and demand in the market, preventing excessive price increases and ensuring that the yield curve reflects market conditions [3][4]. Challenges in the Market - The article identifies two main issues contributing to the current market's risk-averse behavior: low policy interest rates leading to credit tightening and insufficient capacity to generate effective risk assets, exacerbating the asset shortage [4][5]. - The focus on safe assets like government bonds has resulted in liquidity problems in the secondary market, as investors prefer to hold rather than trade these securities [4][5]. Recommendations for Improvement - To enhance the government bond yield curve and market pricing mechanisms, it is essential to address low interest rates and promote a more open economic environment that encourages risk-taking and innovation among market participants [5][6]. - The article advocates for comprehensive reforms to eliminate barriers to market efficiency and foster a competitive legal market order, ultimately improving investment returns and addressing the asset shortage [5][6].

Group 1 - The core viewpoint emphasizes the importance of improving the government bond yield curve as a foundation for the financial market [1][2] - The Ministry of Finance has initiated operations to support the market for government bonds, specifically through selling operations for 2025 government bonds, with amounts of 270 million and 280 million respectively [1][2] - The current market conditions, including a significant decrease in household deposits and an increase in non-bank deposits, highlight the need for a healthy government bond yield curve to ensure financial stability [2] Group 2 - The government bond market is experiencing liquidity issues due to a strong preference for safe assets among investors, driven by an ongoing asset shortage [3][4] - The Ministry of Finance's selling operations aim to address supply-demand imbalances in the market, preventing excessive price increases and ensuring liquidity [2][3] - A comprehensive approach is needed to reform and open up various sectors, removing barriers to market efficiency and enhancing the marginal return on investments [4][5]