Summary of Key Points from the Conference Call Industry Overview - The conference call focused on the Chinese economy, particularly the outlook for exports and domestic demand in 2025, as discussed by local clients in Beijing and Shanghai, including mutual funds, private equity firms, and asset managers from banks and insurers [1][2]. Core Insights 1. **Export Outlook for H2 2025** - Onshore clients have become more optimistic about H2 2025 exports, citing resilient shipping data and stronger-than-expected global growth outside of China. However, there is caution regarding long-term prospects due to US tariffs impacting demand [2][3]. 2. **Growth Target and Policy Easing** - Clients believe that resilient exports will support the 5% growth target for 2025. However, they anticipate limited incremental easing from policymakers, reflecting a conservative and reactive approach to economic management [3][8]. 3. **Concerns Over Domestic Demand** - Weak July activity data and sluggish loan demand have raised concerns about domestic demand. Adverse weather conditions could negatively impact Q3 investment, and consumption may slow due to renewed weakness in the property sector [3][8]. 4. **Expectations for Fiscal Policies** - Clients expect faster execution of existing fiscal policies, including reported RMB 500 billion in policy financing instruments and targeted support for key areas. Any significant weakness in economic indicators could prompt broader easing measures [3][8]. 5. **PPI and Inflation Outlook** - Clients are cautious about inflation, expecting gradual sector-specific capacity cuts to limit macroeconomic impacts. They anticipate PPI deflation to narrow in the coming months, influenced by base effects, but the demand outlook remains critical for PPI reflation [9]. 6. **Capital Flows and Market Implications** - With a recent equity rally, clients are focusing on capital flows, noting that maturing time deposits could shift into equities. They expect CGB yields to rise further but stabilize at levels around 2.2-2.3% for 30-year CGBs, with liquidity support from regulators to prevent abrupt market movements [10]. 7. **CNY and FX Expectations** - Clients see potential for CNY appreciation but expect USDCNY to remain range-bound without new catalysts, such as USD weakness following Fed rate cuts [10]. Additional Important Insights - The ongoing US-China trade tensions, particularly regarding semiconductors, are being closely monitored by clients, as they could impact the export outlook and overall economic sentiment [2][3]. - The anticipation of a relatively high growth target for the 15th Five-Year Plan (2026-2030) suggests a long-term commitment to economic growth, potentially setting targets between 4.5% and 5% [8]. This summary encapsulates the key points discussed during the conference call, providing insights into the current economic landscape and expectations for the future.

New high briefly for NASDAQ today. Otherwise, not much conviction on the tape as we approach the close. So, is there a catalyst to take stocks higher into year end.Let's ask Invesco's Brian Lev and wealth enhancements Yoshio. Good to have you both with us. How would you answer that question, Brian.>> Yeah, I think there's a catalyst. So, the way I would categorize this is we're still in the middle of this market cycle. I don't have credit spreads blowing out. I don't have bankers tightening lending standard ...

Investment Rating - The report maintains a real GDP growth forecast of 4% for 2025, with a revised export volume growth forecast for 2025 adjusted to -5% from -10% previously, indicating a more resilient export performance than initially expected [1][3]. Core Insights - Chinese exports showed unexpected strength in April, with a year-over-year increase of 8.1% in USD terms, which was significantly above market expectations. This resilience is attributed to trade re-routing and front-loading activities during a temporary tariff pause [2][3]. - The report suggests that the better-than-expected export performance reduces immediate pressure on Beijing for aggressive policy easing, with the next critical milestone for potential easing being the July Politburo meeting [4][9]. - The forecast for overall real domestic demand growth has been slightly lowered to 4.5% for 2025, down from 5.0%, reflecting a delay in the rotation towards domestic demand due to sustained export strength [9][21]. Summary by Sections Export Performance - The report highlights that despite weaker signals from manufacturing PMIs, actual trade data showed resilience, with exports expected to decline by 5% in 2025, a revision from a previous forecast of -10% [3][4]. - The net export contribution to GDP is now forecasted at -0.5 percentage points, an improvement from the earlier estimate of -1.0 percentage points [3]. Policy Outlook - Following recent monetary policy adjustments, including a 50 basis point cut in the reserve requirement ratio and a 10 basis point policy rate cut, the report anticipates further policy rate cuts of 20 basis points for the remainder of the year [4][8]. - The augmented fiscal deficit is projected to widen from 10.4% of GDP in 2024 to 13.5% in 2025, indicating a more significant fiscal stimulus than previously expected [8][16]. Inflation and Trade Uncertainty - The report anticipates continued PPI deflation, with forecasts for PPI inflation at -2.1% for 2025 and -0.6% for 2026, reflecting sluggish domestic demand and overcapacity in various industries [10][19]. - There remains high uncertainty regarding US-China trade relations, with expectations that bilateral tariffs may decrease from current levels of over 100% to around 50-60% in the near future [11][20].