Core Viewpoint - As of October 2025, China's foreign exchange reserves reached $3.3433 trillion, marking a $4.7 billion increase from September, the highest level since December 2015, with reserves remaining above $3.3 trillion for three consecutive months [1] Group 1: Foreign Exchange Reserves - The increase in foreign exchange reserves in October was influenced by major economies' monetary policies, macroeconomic data, and a rising dollar index, which led to an overall increase in global financial asset prices [1] - The dollar index rose approximately 1.95% in the past month, while the euro, yen, and pound depreciated against the dollar by 1.7%, 4%, and 2.2% respectively [1] - Despite the Federal Reserve's interest rate cut in October, the dollar index strengthened due to market expectations cooling on further rate cuts, alongside improved China-U.S. trade relations and increased geopolitical uncertainty [1] Group 2: Asset Prices and Economic Outlook - Global stock and bond markets strengthened in October, supporting China's foreign exchange reserves, with the 10-year U.S. Treasury yield declining by about 5 basis points due to the Fed's rate cut and government shutdown concerns [2] - The outlook for China's foreign exchange reserves remains stable, supported by the country's strong economic fundamentals and potential for growth [2] Group 3: Gold Reserves - As of October, China's official gold reserves increased to 7.409 million ounces, a rise of 30,000 ounces, marking the lowest increase since November 2024 [2] - The People's Bank of China has been gradually increasing gold reserves since March, with monthly increments below 100,000 ounces, signaling a strategy to optimize international reserves [2] - The gold market has experienced volatility, with prices briefly exceeding $4,300 per ounce before a rapid correction, indicating potential slowing in central bank purchases due to reaching target levels [3]

Core Insights - As of October 2025, China's foreign exchange reserves reached $33,433 billion, marking an increase of $47 billion from September, the highest level since December 2015 [1] - The increase in reserves is attributed to the rise in the US dollar index and overall global financial asset prices [1][4] - The People's Bank of China has been increasing its gold reserves for 12 consecutive months, with a total of 7,409 million ounces as of October, reflecting a modest increase of 3,000 ounces [1][7] Foreign Exchange Reserves - China's foreign exchange reserves have remained above $3.2 trillion for 23 consecutive months, with a continued month-on-month increase in October [4] - The US dollar index rose by approximately 1.95% in the past month, while major currencies like the euro, yen, and pound depreciated against the dollar [4] - Factors contributing to the dollar's strength include the easing of US-China trade tensions and increased global political uncertainty [4] Asset Prices and Market Conditions - Global stock and bond markets showed strength in October, supporting the increase in China's foreign exchange reserves [5] - The yield on 10-year US Treasury bonds fell by about 5 basis points due to the Federal Reserve's interest rate cuts, leading to a surge in demand for US government bonds as safe-haven assets [5] - Major stock indices, including the S&P 500 and Nikkei, experienced gains during this period [5] Gold Reserves - The increase in China's gold reserves has slowed, with the latest monthly addition being the lowest since the resumption of purchases in November 2024 [7] - The gold market has seen volatility, with prices fluctuating around $4,000 per ounce before retreating below $3,900 [8] - Analysts suggest that the People's Bank of China will continue to increase gold reserves as part of a strategy to diversify international reserves and respond to changing global conditions [8]

Group 1: Economic Impact of U.S. Government Shutdown - The U.S. government shutdown, which began on October 1, has lasted for 12 days and shows no signs of resolution, affecting the economy and public services [1] - The political deadlock has led to significant disruptions in daily services for low-income families, including risks of interruption in food stamps and housing subsidies [1] - The shutdown has resulted in mandatory unpaid leave for hundreds of thousands of federal employees, with potential for increased layoffs as the situation persists [1] Group 2: Gold Market Dynamics - The demand for gold as a safe-haven asset has surged, with prices exceeding $4,060 per ounce, marking a historical high due to the government shutdown and renewed tariff tensions [2][3] - Year-to-date, international gold prices have risen over 51%, making this year the largest increase since 1979 [2] - Factors supporting the long-term strength of gold prices include high U.S. government debt, persistent inflation, and skepticism regarding the dollar's status as the primary reserve currency [2][3] Group 3: Central Bank Behavior - Central banks are increasingly diversifying their foreign exchange reserves, with 95% of surveyed central banks planning to increase gold reserves in the next 12 months [5] - The trend indicates a structural change in the global reserve system, with a significant reduction in reliance on dollar assets [5] - The global central bank gold purchases are closely linked to geopolitical risk hedging and the increasing volatility of the dollar [5] Group 4: Future Projections - By 2025, gold is projected to surpass U.S. Treasury securities as the second-largest reserve asset globally, with its share in central bank reserves rising to 20% [4] - Global central banks are expected to continue increasing their gold holdings, with over 1,000 tons added for the third consecutive year [4] - As of the end of 2024, central banks are anticipated to hold approximately 36,000 tons of gold, nearing historical highs [4]

Core Viewpoint - China's foreign exchange reserves have shown a steady increase, reaching $328.53 billion by the end of May, marking a $3.6 billion rise from April, and continuing a five-month upward trend [2][3]. Group 1: Foreign Exchange Reserves - As of the end of May, China's foreign exchange reserves increased for the fifth consecutive month, influenced by fiscal and monetary policies of major economies and economic growth prospects [3]. - The increase in reserves is closely linked to the depreciation of the US dollar, with an 8.4% decline in the dollar index over the first five months of the year [2][5]. - The valuation effect of currency exchange rates and asset prices has led to a slight increase in reserves, despite fluctuations in global financial asset prices [3][5]. Group 2: Gold Reserves - China has continued to increase its gold reserves, reaching 7.383 million ounces by the end of May, a rise of 60,000 ounces from April, marking seven consecutive months of gold accumulation [3][8]. - The global demand for gold among central banks is rising due to geopolitical risks and economic uncertainties, with expectations that central banks will add approximately 1,000 tons of gold reserves this year [3][10]. - The proportion of gold in China's foreign exchange reserves remains low at 7%, compared to the global average of about 15%, indicating potential for further increases in gold holdings [9][10]. Group 3: Future Outlook - Financial analysts predict that China's foreign exchange reserves will continue to exhibit stable fluctuations, supported by improving economic conditions and trade relations with the US [6][7]. - The expectation of continued depreciation of the US dollar is likely to support the growth of China's foreign exchange reserves, as a negative correlation exists between the dollar index and reserve levels [6][7]. - The ongoing geopolitical tensions and economic uncertainties are expected to drive further demand for gold as a safe-haven asset among central banks globally [4][10].

Market Review - The A-share market showed a mixed performance last week, with the ChiNext Index, Shenzhen Component Index, and CSI 1000 Index leading gains at 3.27%, 2.29%, and 2.22% respectively, while the Sci-Tech 50, SME Index, and CSI 500 Index lagged behind with returns of -0.60%, 1.49%, and 1.60% respectively [6][14] - The total net withdrawal of funds through the central bank's reverse repos was 781.7 billion yuan, with 1.6178 trillion yuan maturing and a net open market injection of 836.1 billion yuan [22] - The People's Bank of China has been increasing its gold reserves for six consecutive months, with the official gold reserves reaching 73.77 million ounces as of April 2025, an increase of 70,000 ounces from March [9] Fund Performance - Last week, the performance of actively managed equity, flexible allocation, and balanced mixed funds was 1.22%, 1.01%, and 0.91% respectively. Year-to-date, alternative funds have shown the best performance with a median return of 5.45% [34][36] - The total net asset value of public funds remained above 32 trillion yuan for two consecutive months, standing at 32.22 trillion yuan as of March 2025, showing little change from February [12] Fund Issuance - A total of 15 new funds were established last week, with a total issuance scale of 6.345 billion yuan, a decrease from the previous week. Among these, 8 were passive index funds and 4 were enhanced index funds [4][45][46] - 40 new funds were reported for issuance last week, including various ETFs and FOFs, indicating an increase in the number of fund applications compared to the previous week [5][6] Regulatory Developments - On May 7, the China Securities Regulatory Commission (CSRC) released an action plan to promote the high-quality development of public funds, addressing issues such as operational model optimization, industry evaluation system improvement, and risk management enhancement [7][8]

Group 1 - As of April 2025, China's foreign exchange reserves reached $328.17 billion, an increase of $41 billion from March, representing a growth rate of 1.27% [1] - The increase in foreign exchange reserves is attributed to currency revaluation and asset price changes, with the U.S. dollar index (DXY) falling by 4.6% to 99.5 in April, leading to appreciation of non-U.S. currencies [2] - The People's Bank of China, along with financial regulatory bodies, has introduced a series of financial policies to support market stability, which is expected to contribute to a balanced international payment and stable foreign exchange reserves [3] Group 2 - The central bank has increased its gold reserves for the sixth consecutive month, reaching 7.377 million ounces by the end of April, with a month-on-month increase of 70,000 ounces [4] - The current gold reserves amount to $243.6 billion, accounting for 7.4% of the foreign exchange reserves, which is an increase of 0.3 percentage points [4] - The diversification of international reserve assets is progressing steadily, as indicated by the record high proportion of gold reserves [5]