1. Report Industry Investment Rating - Not provided in the content 2. Core Views of the Report - The key to economic recovery lies in the direction of the cash - flow statement, not "policy exceeding expectations". The economy may continue to recover even without super - expected policies, and subsequent economic conditions may remain favorable [2][4] - The pre - condition for interest rate cuts is an economic downturn, which may not be met currently. If conditions are triggered, the central bank is more likely to cut interest rates by 10BP [6] - There is an upward risk for the 10 - year Treasury bond yield. The report is optimistic about the convertible bond market in 2025, favoring domestic demand in the second and third quarters and external demand in the fourth quarter [6][7] 3. Summary by Related Content Economic Recovery and Policy Impact - Economic recovery does not rely on "policy exceeding expectations". For example, from Q4 2024 to Q1 2025, there were no super - expected policies, but the economy exceeded market expectations. Also, past policy measures like interest rate cuts and special bond issuances did not always lead to positive market responses [2][3] - The key to economic recovery is the direction of the cash - flow statement. Fiscal policy (accelerating bond issuance and use), debt resolution methods (expanding cash - flow statements after September 2024), and monetary policy (moderately rising social financing stock growth) all contribute to economic recovery. Incremental policies in finance, currency, and real estate are expected to further expand the cash - flow statement [4] - Although exports may decline due to US tariffs, the decline may be better than expected. After Q4 2024, with the cash - flow statement turning upward and policy support, the economy may maintain a good level [5] Interest Rate Cut Conditions - "Timely" and "opportunistic" for reserve requirement ratio and interest rate cuts are just different in applicable levels. The condition for "timely reserve requirement ratio and interest rate cuts" in the Politburo meeting may be an obvious downward economic trend. As the economy has not shown a significant downward trend in the past 5 months, the measure has not been implemented. If the economy stabilizes and recovers in Q2 and Q3 2025, the condition for interest rate cuts may not be triggered. If triggered, the central bank may cut interest rates by 10BP [6] Bond Yield and Convertible Bond Market - The current pricing of the 10 - year Treasury bond yield implies a significant decline in DR007 or OMO interest rate cuts. If the capital interest rate does not decline significantly from late April to May, there is an upward risk for the 10 - year Treasury bond yield. The triggers for bond yield increases may include capital, economic, and stock market factors [6][7] - The report is optimistic about the convertible bond market in 2025. If the market corrects after the April 2025 Politburo meeting, it may present an opportunity similar to that in January 2025. It favors domestic demand in the second and third quarters and external demand in the fourth quarter, with possible reasons including China's industrial chain trends, China - EU negotiation progress, and China's substitution of US exports [7]